Whilst the focus on the trade front seems to be firmly on what the Trump administration is going to do next to try and keep Chinese tech companies out of America, there is something that we are missing. It is to do with e-commerce and Russia (and China and the US).
Even without much meddling from the White House or The Hill, the relationship that Russia has with China is effectively keeping American companies out of two of the biggest e-commerce markets in the world.
Amazon, to name but one e-commerce company, might be unstoppable and huge in the US, but in Russia it ranks below eBay and way below the big Chinese players. AliExpress is the biggest e-commerce site in Russia, a market worth $5.1 billion.
The problem is actually not that Russia loves China. The problem – for Western companies at least – is simply that China shares a land border with Russia. This means they avoid the majority of the incredibly burdensome red tape that overseas companies have to cut through to deliver parcels to individuals in Russia.
‘The most popular goods bought online in Russia are clothing, footwear, tablets and mobiles – all of which are produced [cheaply] in China and a bargain in Russia,” according to David Jilks of Parcelhero.
Worse, he adds, “China’s shared land border means about 95% of AliExpress’ packages to Russia can be sent by ordinary mail, escaping some of the most vigorous customs checks on couriered international shipments.” By comparison, the immigration, customs and tax laws governing goods being imported to individuals from ‘the West’ are draconian.
While it may be tough for individual companies like ZTE to do business in the US, it is – in comparison – very easy for Chinese companies to do business in Russia.
Which, if nothing else, helps put the current trade war between the US and China into perspective. It shows that while ZTE might worry, Chinese e-commerce companies certainly won’t as they continue to have access to a huge market on their doorstep.
In fact, it is the companies that seem unstoppable – like Amazon – that suddenly seem a little frail if they find it difficult to get traction in two of the largest markets that together boast a population of one and half billion people, versus 340 million in the US.