Driving Digital Inclusion for MSMEs and Women: Diane Wang

7 min read.

DHgate’s CEO Ms Diane Wang shares her views on digital transformation for MSMEs and women, e-commerce being a“youth” ready to work with all stakeholders at national and international levels and DHgate’s efforts in working with companies to tackle supply chain challenges during the pandemic. 

It was a year after SARS when Ms Diane Wang set up DHgate in 2004. The strategic and brave move is the reason why DHgate has grown into the largest B2B cross-border e-commerce platform in China. Under her leadership, the company has actively engaged 2.2 million sellers and 28 million buyers from 220 countries, with 23 million products available. The company is now dedicated to help MSMEs tide over the coronavirus pandemic, a feat that not many are able to undertake. 

Before this, Diane served as the youngest senior executive at Microsoft China and the only female with a high position at Cisco. In 1999, as the first generation of e-commerce entrepreneurs in China, she established Joyo.com, China’s first B2C trading platform. 

Diane has leveraged over 30 years of business and digital experience to drive DHgate’s mission to empower every people through digitalization. The critical focus is accelerating digital transformation for MSMEs and partners and empowering women and societies through digital inclusion.

We caught up with her on the latest happenings with DHgate, the cross-border e-commerce marketplace and digital transformation amid the pandemic.

86insider: What kind of internal changes have the company introduced to cope with COVID-19?

Diane: Internally, we have launched a pandemic prevention management system to protect our employees after the outbreak, including monitoring guidance from health officials, developing workplace policies such as regular office disinfection, offering flexible work arrangements such as work from home and remote technical support and providing PPEs to our staffs and their families.

86insider: How about external changes?

Diane: We have also launched an external pandemic prevention management system for sellers and buyers. As a cross-border e-commerce marketplace, consumers were concerned about the virus-carrying in the boxes; thus, we have done consumer education through multi-channels, with support from health officials. In the meantime, we have urged all sellers to disinfect packages before shipping.  

This pandemic has changed consumer demands. For example, keyword search “sanitizer” and other related PPE products in our platform increased 600 times in early April compared with it in January; therefore, we have actively restructured our product portfolio by introducing PPEs and quarantine-related products. We are very serious about product quality — given those PPEs are used to protect people, we have cooperated with state-owned medical supplies companies in China, sourcing reliable products for our customers. 

Masks and other PPEs recorded explosive growth, GMV increased 72 times in early April compared with that in early March. In addition, infant and toddler bath products increased by 18 times as opposed to before the Spring Festival. The sales of household tools, laptops, sports and fitness, games and other supplies suitable for home office learning and entertainment doubled. Orders from the US, Canada, France, Spain, Italy, and other European and American countries generally experienced rapid growth in transaction value.

Logistics has been a significant challenge in the pandemic due to a lack of manpower and capabilities. Many airlines have grounded their service—European air capacity shrunk by 80 per cent and US air capacity shrunk by 70 per cent. Restricted export policies in various countries have hindered logistics delivery. The average delivery time exceeded 10 days and the postal delivery exceeded 25 days. This has a significant impact on the supply chain of China’s cross-border e-commerce.

A large number of goods were kept in ports due to low transportation capacity and slow delivery. DHlink, our logistics arm, has inked cooperation with airlines and other logistics companies to improve efficiency through big data, such as production forecast and capacity forecast, helping consumers to receive products soonest. For example, collaborating with China Eastern Airlines, we delivered the first batch of medical supplies in 20 tons to the hands of hospitals in Canada in seven days, including the time in production, domestic logistics, customs clearance and international logistics.            

Collaborating with China Eastern Airlines, we delivered the first batch of medical supplies in 20 tons to the hands of hospitals in Canada in seven days, including the time in production, domestic logistics, customs clearance and international logistics.

86insider: DHgate was set up the year after SARS in 2004, how is the current pandemic situation different from back in 2003?

Diane: The epidemic of SARS was a turning point for China’s e-commerce boost at the domestic level. At that time, e-commerce was an infant; all players developed national coverage for local people to shop online easily. The pandemic COVID-19 hit the global world deeply, no country is alone. In this circumstance, we found that only a global sectoral approach between the public and private sectors can help to overcome difficulties together. 

E-commerce is now a 17-year old youth; it has started to work with all stakeholders in the whole end-to-end supply chain, both at national and international levels. In this global supply chain, it requests collaboration among governments, health officials, manufacturers, distributors, e-commerce, local logistics, freight forwarders, customs clearance, international logistics, and more. 

Furthermore, digital technologies such as AI, big data, and e-commerce have transformed the global supply chain system to become more resilient. For example, for one, e-commerce platforms can help manufacturers to optimize production and distribution capacity through big data. These steps will enable businesses to understand current and projected capacity levels in both workforce and materials. Next, e-commerce platforms can collaborate with logistics companies to identify and secure local and international logistics capacity through big data, estimating capacity and accelerating where possible. Finally, e-commerce platforms and banks can help to provide financial support to manufacturers that supply chain issues will start to cause a financial impact.

E-commerce is now a 17-year old youth; it has started to work with all stakeholders in the whole end-to-end supply chain, both at national and international levels.

86insider: Given that DHgate is the B2B e-commerce trading and service platform that has helped many MSMEs to conduct business across the border, is the company providing further assistance in helping them tide over the pandemic?

Diane: Help traditional international trade companies and MSMEs to go digital, so that they can get orders online without leaving home and help to improve operation. In China, DHgate.com has promoted traditional offline merchants in key provinces in the online space and supported the development of cross-border e-commerce to help companies put offline inventory online. This action has bridged supply and demand and achieved a “win-win” situation for buyers and sellers. 

In overseas markets, DHgate.com has looked for the nearest source of emergency supplies and pushed mask manufacturers online from offline. For example, we found offline FFP2 masks in Germany and have supplied them to Italy, Spain and  France through cross-border e-commerce, at a reasonable price. We found that many overseas traditional trading companies and manufacturers have not been online. Government officials should assist MSMEs to sell their offline stocks online, to solve supply and demand problems and improve their business operations.

Since the outbreak, logistics service across the country has been affected. To support sellers and help them retain buyers, DHgate.com launched a customer retention program, actively contacting buyers through various means such as in-site messages to explain the situation, and issued coupons to compensate customers. We have gained the understanding and support of many overseas consumers. Some expressed their blessings to sellers and wished China a victory in fighting the epidemic. A buyer said: “I understand the current situation is caused by the COVID-19, which is not his (seller’s) fault. I am willing to wait and hope that he can get his career back as quickly as possible.”

Additionally, DHgate.com and China Construction Bank announced that from February 5th, the interest rate of “E-Commerce Loan” during the epidemic period has been reduced to 4.5 per cent from 5 per cent and can be issued within 1 second. This product is undoubtedly an excellent policy to help SMEs overcome difficulties. “E-Commerce Loan” is an inclusive financial product that cooperated with China Construction Bank and supported by DHgate.com’s big data. This service targets cross-border e-commerce MSMEs, with a credit quota of up to RMB two million. We have issued RMB 100 million to MSMEs by mid-April. 

In the meantime, from the APEC Business Advisory Council and B20 perspectives, we have strengthened our commitment to help MSMEs through different international advocacies. For example, we call on governments and businesses to take a global sectoral approach with three pillars, including innovative digital education, one-stop digital operation and best practices in a digital ecosystem and positive economic measures through government collaboration. 

In the meantime, from the APEC Business Advisory Council and B20 perspectives, we have strengthened our commitment to help MSMEs through different international advocacies. For example, we call on governments and businesses to take a global sectoral approach with three pillars, including innovative digital education, one-stop digital operation and best practices in a digital ecosystem and positive economic measures through government collaboration.

86insider: If there are initiatives in place, how long more do you think the assistance can be offered given that hypothetically, the situation were to stay for another year? 

Diane: What MSMEs need to pursue is technology transformation, from education, finance to international trade. This task is not an option, but a job that must be executed continuously. For example, we launched a digital skill training program — the Cross-Border E-Commerce Training (CBET). 

This program is the first brand of cross-border e-commerce capacity building initiated by DHgate.com, endorsed by APEC. The CBET project aims to improve participation of MSMEs and women into international trade and promotes free and paperless trade through cross border e-commerce globally. This program shares the rising trends in utilizing cross border e-commerce to go global, best practices through case studies, and fruitful cooperation model between public and private sectors to transform traditional trade and benefit MSMEs and women. The project has trained more than 10,000 MSMEs in 5 years, contributed by international leaders such as Google, DHL, MasterCard, Tencent, and Facebook. 

We have promoted SaaS solutions for MSMEs, empowering them with hassle-free applications in managing the whole life journey of e-commerce. For example, we can apply AI to identify customers’ situations and purchase processes, in which the system can recommend the right marketing tools accordingly. In the past, for existing customers, stores issued coupons to all, but in fact, many coupons were not actively used. The consumer process journey can be predicted by the model with big data, and the model can help to promote suitable promotions based on different customers’ purchase behavior.

The CBET project aims to improve participation of MSMEs and women into international trade and promotes free and paperless trade through cross border e-commerce globally…The project has trained more than 10,000 MSMEs in 5 years, contributed by international leaders such as Google, DHL, MasterCard, Tencent, and Facebook.

86insider: What are some of the bottlenecks faced by MSMEs to go global? 

Diane: MSMEs play an essential economic role in virtually all countries. In this pandemic, we did some research in the cross-border trade industry and found many MSMEs have been transforming themselves in fundamental ways, including business models, products and technological upgrades. We also found the following four key chokepoints faced by them to go global: lack of access to market, lack of access to information and knowledge, insufficient access to export-related financial resources and inadequate supply system.

Lack of access to market: They have very limited resources on the latest demands and policies in overseas markets. Especially during the pandemic, overseas market demands changed day by day. The big data of e-commerce can help them understand the demands and trends of overseas buyers in a more timely manner, and they can be easily paired with suitable buyers quickly.

Lack of access to information and knowledge: Due to a limited scale, it is not easy for MSMEs to establish an intelligent center to map out global opportunities while keeping competitiveness through knowledge transformation. In China, though e-commerce has helped many companies online, several traditional international trade companies lagged without engaging in transformation. During the crisis, we found that some offline distributors with sufficient PPE stock did not know how to sell their products through online platforms due to a lack of digital knowledge and information. We launched a program called the Awakening of Insects (a Chinese traditional solar term, which means the time that Earth begins to come back to life), aiming to help MSMEs to embrace digital transformation. In order to contain impacts of Covid-19 pandemic on both business and workforce, this program, endorsed by China’s Ministry of Industry and Information Technology, has leveraged resources of both industry and government, empowering MSMEs to start the e-commerce business with relief packages including e-commerce operation and e-finance.    

Insufficient access to export-related financial resources: Affected by the pandemic, the revenue of cross-border e-commerce companies decreased significantly, but total costs cannot be reduced. The short-term cash flow tension would put the company into trouble. According to DHgate.com’s data, the vast majority of sellers in Feb did not generate any income due to the lack of production and transportation. Surviving is a key for them, but it is not easy for global MSMEs to get financial support due to local regulations. However, we’ve seen opportunities for them to survive in this crisis, especially from the surging demands in PPEs. As mentioned earlier, we have been working with banks to provide financial support to them. 

Inadequate supply chain system: The journey of a product in the whole supply chain combines many stages, from suppliers of raw materials, distributors, local and international transportation, customs clearance, and retailers. We found that many MSMEs in lower competitiveness are due to the weak supply chain system. During the crisis, a resilient and digitized supply chain is crucial for MSMEs to survive. 

According to a report by Bain & Company, companies with resilient supply chains grow faster because they can rush to meet customers’ needs when market demand shifts. They increase their perfect order rate by 20 to 40 per cent and customer satisfaction by as much as 30 per cent. Importantly, flexible supply chains cut costs and improve cash flow, in part through a 10 to 40 per cent increase in inventory turns. For example, we recently finished a batch of medical supplies to hospitals in Canada, with a resilient global supply chain system. From production to delivery, it took less than seven days. 

With support from the public and private sectors, we have leveraged advanced technologies such as AI, cloud, e-commerce, and smart logistics to improve global supply chain efficiency, including building a real-time information platform on production and market demands, optimizing production capacity, identifying and securing local and international logistics capabilities, providing financial support to manufacturers suffering from financial impacts. 

We also found the following four key chokepoints faced by them to go global: lack of access to market, lack of access to information and knowledge, insufficient access to export-related financial resources and inadequate supply system.

86insider: There are many indications that the world will undergo a recession this year or next year – why would going global still be a priority for these SMEs when they should be more concerned about survival at this stage? 

Diane: In the crisis, MSMEs shall review their go-to-market strategies, based on market change. For those traditional MSMEs involved in international trade business, they need to consider digital transformation in fundamental, including business models, products, and technology. But access to market and information is critical for all MSMEs to survive in this perfect storm, they need to be flexible enough to adapt to the latest situation. The pandemic has changed our routine lives and the way we do business, most of which are happening online. Digital skills can help MSMEs to access to market demands and changing environments instantly.

86insider: We are aware that e-commerce has many challenges, such as dealing with the mismatch of demand and supply and there are still a good majority of people who have yet to accept digital transformation. What are some good practices at DHgate that you think should be adopted as the gold standard for e-commerce?

Diane: Compared with traditional e-commerce, this industry is reshaping, requesting a total solution service combining products and services for buyers, from sourcing to customs. As a digital platform for global cross-border e-commerce MSMEs, we are committed to becoming an incubator and accelerator for them to go global, powered by advanced technologies. We empower sellers to integrate all the links needed for cross-border e-commerce trade, including marketing, logistics and warehousing, payment, e-finance, risk control, customs inspection and taxation, training and standardization and more. 

For example, we have helped hospitals in Canada to source reliable medical supplies from a traditional company, which was never online. We played a critical role in helping manufacturers go digital, establishing an e-commerce business with a green channel. In the meantime, we provide a real-time information platform on product details, production, and market demands, helping buyers to compare different products while consulting details through us with suppliers. Furthermore, in view of products’ priority in helping the frontline, we have been working closely with customs on both sides to provide green channels, digitize all documents and accelerate document reviews. We also worked with China Eastern Airlines and other logistics companies closely, applying big data to forecast production volume and helping logistics to identify and secure local and international logistics capabilities.

Compared with traditional e-commerce, this industry is reshaping, requesting a total solution service combining products and services for buyers, from sourcing to customs. As a digital platform for global cross-border e-commerce MSMEs, we are committed to becoming an incubator and accelerator for them to go global, powered by advanced technologies.

86insider: In the ideal world, we are battling this pandemic not as silos but together as a one people; however in reality that is not the case, is there a gap that you clearly see that is inherent in cross-border e-commerce that can be bridged and if so, who are the necessary parties required to step up to make it possible? 

Diane: We have actively promoted initiatives in international organizations, including APEC Business Advisory Council and B20, calling on public-private cooperation. We hope that the members and governments can cooperate on the topics of knowledge sharing, technology empowerment, building a resilient global supply chain mechanism, and launching protective equipment online expo. These initiatives can fully utilize members’ strength and promote cooperation in policies and regulations across governments. We believe advanced technologies such as cross-border e-commerce, AI, big data, smart logistics, and e-finance can better help MSMEs to jointly cope with the pandemic.

86insider: How do you think ASEAN countries and companies can work better together to tackle supply chain challenges?

Diane: ASEAN countries are the most dynamic and fast-growing regions in the world. To tackle supply chain challenges, especially in the crisis, we can support the public and private sectors to build up a resilient global supply chain mechanism in this region. This mechanism will help to improve efficiency and reduce barriers in free flow in the region, eliminating the potential long-term impact on all economies.  

We are willing to cooperate with ASEAN countries and business communities, sharing our experience and technology with them, and jointly promoting effective measures and projects. For example, we can collaborate with governments, health organizations, and customs across the region to review product quality standards and usage methods in different counties, to ensure appropriate logistics and supply chains and to accelerate customs clearance for medical supplies. Further, we can apply technologies including big data, e-commerce, cloud, blockchain, smart logistics, and e-finance to provide real-time information on production and market demands through e-commerce platforms, to create transparency on product details and tracing and to share consolidated regulations on products and customs. What’s more, advanced technologies can help manufacturers to optimize production capacity, help logistics to identify and secure local and international logistics capabilities, and provide financial support to manufacturers suffering from financial impacts.

ASEAN countries are the most dynamic and fast-growing regions in the world…We are willing to cooperate with ASEAN countries and business communities, sharing our experience and technology with them, and jointly promoting effective measures and projects.