Trading companies used to be living in the digital dark ages. But no longer.
As part of the online world, Trading companies now are getting closer to connecting with their target customers on social media. These customers more and more tend to group on social media where is is easy to find them and easy to address them.
Trust 1 on 1
But with that, it becomes more and more difficult to find the trust that is the basis of a good trading relationship. The nature of social media and the internet is one of superficial trust and one-of-deals. Not the best side of trading....or establishing a good trading company.
On the other hand, a trader can now choose to actually surf the world and even find as retailer the individual clients abroad.
And with that, trading companies need to change....
Trust of the group
While connecting to the trading networks, the idea sharing and learning curves of fellows group users could help building the trusted relationships that at first seems to be missed. Now it is more about others empowering a company by endorsing them, than the company establishing this trust relationship one-to-one.
Finding the right products
Where traders of goods mostly have long time to market products; the marketing of the products already produced and sold was done by the trusted buyers. Now through social media one can detect the right products before they are sold or even manufactured. But these are consumers wishes; nevertheless usable for any Trading Company trading goods and or physical products.
So; we expect the international trading goods business to change even more quickly . Where one-to-one will change into group endorsed buying and selling. Faster, quicker and more volatile.
The trading platforms will change as well..
The all known and successful trading platforms like Alibaba will change as well. No longer can they rely on manufacturers advertising their products on a internet platform. They have to service more groups (as Alibaba introduced Alibaba express) and with that also offer more physical service like mail and real live logistics and with that again close the gap between old-fashioned trading (where the old distribution chains are in place) into the new world where manufacturers actually could hit the international consumers market.
And with that have the traditional trader surpassed...
Published in retail detail on 30-05-2018
Chinese retail giant Alibaba will invest 1.4 billion dollars in postal service ZTO and will obtain 10 % of the Chinese package service’s shares. Alibaba is also looking for a logistics center in Germany in order to conquer the European market.
Alibaba will do logistics
Alibab paid 1.2 billion euro for logistical specialist ZTO, which ships orders in China on behalf of Alibaba and competitor JD.com. Alibaba focuses more on its own logistics: it is the second time in a year’s time that the Chinese multinational will invest in the industry. It previously increased its stake in warehouse company Cainiao, which gives it a 51 % majority stake.
The retail holding is getting a hold of more of its own supply chain, which clearly indicates it is evolving from a sales platform to an allround retailer. Similar to Amazon, it wants to cut away as many of the value chain’s steps in between. Alibaba also needs its own warehouses if it wants to supply its rapidly-growing number of stores, including its Hema supermarkets and its brand platform Tmall.
Attack on Europe
Alibaba is also looking for warehouse space: according to Wirtschaftswoche, the Chinese company is talking to the harbour in Hamburg in order to open its own logistical center to service the European mainland. The German hub would mainly target the German and Scandinavian markets according to the German paper. Alibaba already ships 50,000 packages daily to Germany. The paper says it is also considering a Belgian distribution center, although that remains unconfirmed.
Alibaba is also allegedly building a Czech warehouse and CEO Jack Ma has also stated it is willing to invest in France. The Bulgarian government had also previously mentioned actual plans, which shows that the Chinese invasion is slowly taking shape.
Building an international distribution network; viewing their pitfalls.
If one wants to really be the International Trader of Goods, the whole distribution chain is now connected.
No longer can a Trader just be the international connection between the same goods bought country A and sold in Country B.
Anybody can source a good. Added value in the distribution chain is absolutely key for being successful.
What is the possible added value in the digital chain?
Knowledge, trust and distribution speed.
Where the fist two are obvious, distribution speed is new. Well, not new in the sense that it was always wanted, speed is new because it has become an integral part of the product.
But beware; the distribution chain is shortening and changing in the consumer goods; trade becomes more retail.
Trade in half products, commodities and futures
This type of trading goods, like oil, wheats, pork belly's etc, meat etc, are not subject to the described changes above. Surely these types of trading, meaning the goods itself, was always subject to price. Their drivers; price and volume versus availability has made this type of trading more than ever a volatile business. The knowledge and availability now is easily displayed and found; nevertheless the leverage is still made by money.
It seems that a lot of chances are upon trading. But mainly on the possible retail side; is.est where goods can be supplied in pieces. Not in mega tonnes or hectoliters. Nor reserved for harvest in August...but delivered now.
So; expect delivery and distribution changes, Where timely delivery and competitive pricing on retail level can be expected.
But expect trading platforms and more financial products on the commodities and future side of trading.
MEET OUR PARTNERS
t: :++31 20 894 3061 Amsterdam
t: +31 (0) 53-30 201 41 Enschede
fax: +31 (0) 20-890 5415
tel UK: +44 20 8144 1689 London