Report: E-commerce has positive impact on manufacturing industry

E-commerce retailing, or e-retailing in China, has had an increasingly positive impact on the manufacturing industry – in 2017, every million yuan ($152,000) of the manufacturers’ investment in e-retailing, they would get a 710,000 yuan direct increase in their benefits, according to a recent report.

The report, launched on Thursday, by the China Council for the Promotion of International Trade Academy (CCPIT Academy), revealed that by improving innovative abilities, increasing market shares and raising operating efficiency, e-retailing contributes a lot to the growth of manufacturers' income and profit, no matter how big the manufacturing enterprise is.

Specifically, as e-retailers collect their sales statistics online, they may find it easier and quicker to present the data directly to the manufacturers. This way, the manufacturing industry can immediately adjust their products according to the data, which represents the up-to-date specific needs from a certain group of consumers.

"From the sales big data, manufacturers are able to know what type of product is preferred by what type of consumers, and they may lay more emphasis on some specific goods which will bring them the maximum profit," Zhao Ping, director of the international trade research department at CCPIT Academy, said.

"This is called 'accurate research and development'.

"Furthermore, big data provide manufacturers with instruction on their storage and procurement strategies, lowering their costs."

According to the report, 82 percent of the manufacturers in the 2017 study by CCPIT Academy agreed that e-retailing boosts their sales revenues; 71 percent of them thought e-retailing helps cut storage costs; and 69 percent said that e-retailing lowers their procurement expenses.

The Aux Group, a well-known manufacturer of air conditioners, once suffered sales market frozen when its traditional sales channel was attacked by e-commerce. However, when the Aux teamed up with JD.com, China's leading e-retailer, its sales revenue grew from 40 million yuan to 2.5 billion yuan from 2010 to 2016, turning into the "black horse" with the most rapid growth in the air conditioning sector in China.

"Traditional views may hold that manufacturing is only connected with the real economy," Zhu Yumei, senior strategy director of JD.com, said.

"However, e-commerce is playing an important role in boosting the manufacturing industry in China. Actually, the latter also benefits the former."

She added that with its high efficiency, big data is empowering the manufacturing industry and shaping it into a better pattern.

"As promising as the future is, some problems still remain," Zhao said.

"Certain laws should be carried out to regulate the activities in the e-commerce area, to prevent shoddy commodities, and unfair trade competitions. Besides, the manufacturers should speed up their reforming process and find out the best way to integrate into the digital era."