Economy - April 14, 2022 | 05:57 pm PT

E-commerce hammered by China’s zero-Covid policies

It has been 21 days since Quang Thanh ordered some clothes from a shop in China via e-commerce platform Shopee, and the package has still not arrived.

"I usually get stuff from China delivered within nine or 10 days, and a delay this long has never happened before."

The 22-year-old student’s shopping account shows that the goods he ordered have left Shenzhen, a city in southeastern China, weeks earlier, but it does not provide him with any further information.

"I cannot even cancel the order, as Shopee requires me to wait for another 10 days."

Container trucks are seen at a border gate with China in Vietnam's Quang Ninh Province, January 21, 2022. Photo by VnExpress/Minh Cuong

In the last several weeks, Vietnamese e-commerce customers and vendors have been struggling to get their orders delivered from China as the Covid-19 situation worsens there.

Local e-commerce vendors and buyers are reporting weeks of delay in getting their orders completed as China locks down cities and restricts border trade.

Order Taobao, a logistics firm which helps connect small Vietnamese businesses with Chinese sellers, switched from shipping via road to sea last month as border gates limited the passing of trucks.

Sea freight from Guangdong to Hanoi takes 15-25 days, compared to 6-8 days earlier, and costs around 8 percent higher, but the company cannot offer any other option, as many importers still have their goods stuck at the road border, a media representative who asked not be identified told VnExpress International.

"We have had to increase prices a couple of times as sea shipping rates rose."

Another company, One Line Logistics, has reported a price increase of 20-40 percent for transporting goods under official quota.

Khanh Linh, a saleswoman with the company, said transportation was taking several days more than before.

"Our trucks can still pass through the border but not as many as three or four months ago."

China’s commercial capital Shanghai, with a population of 25 million, has reported over 20,000 new cases a day this week as officials struggle to control the city’s most severe novel coronavirus crisis to date.

"The widespread lockdown and tighter zero-Covid restrictions in several cities around Shanghai have caused significant supply disruptions with transport and logistics under severe pressure," U.K.-based Barclays Bank economist Jian Chang said in a note.

The strict policy has become a hassle for Vietnamese vendors as China has been the biggest seller to Vietnam for years.

Vietnam posted a $14.3 billion trade deficit with China in the first quarter, up 21 percent year-on-year, according to the General Statistics Office.

Many Vietnamese e-commerce vendors of fashion and household items as well as other goods by them China’s e-commerce platforms like Tao Bao, 1688 or Tmall at low prices and sell them to Vietnamese customers via their own e-commerce platforms or social media.

"My customers keep texting and calling to complain about delivery delays, but I cannot give them a definitive answer as to when the goods will arrive," said Hoang Minh, a Hanoi-based vendor of clothes and footwear.

Minh has been selling more domestic products to keep revenues coming as some of his orders have been delayed for almost a month.

The lockdowns in China are set to cause a big problem for the global economy as the manufacturing powerhouse accounts for a large chunk the world’s supply to many sectors.

"Many of the things that we use around the world have components from China and we’re about to see a logistics snarl that’ll dwarf anything in 2020 or 2021," Richard Martin, managing director at business consultancy IMA Asia, told CNBC.

With China President Xi Jinping reaffirming this week that the country will continue to stick to its tough Covid-19 curbs, Vietnamese online buyers will likely have to keep waiting for weeks to get their orders delivered.

For now, Quang Thanh has stopped looking for products that ship directly from China and buys instead from vendors in Hanoi and HCMC.

"There are fewer choices, but it is better than waiting for weeks."

Dat Nguyen

 
 
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