Ukraine invasion: Western sanctions on Russia hit Shenzhen online merchants, says local group
- China’s exports to Russia rose 33.8 per cent annually in 2021 to US$67.6 billion, representing 2 per cent of its total exports
- The exclusion of Russia from the Swift global payment system has also prompted concern among Chinese exporters about getting paid
Western sanctions imposed on Russia for invading Ukraine, which triggered a dive in the value of the rouble, are reverberating across China’s online cross-border merchant community, according to a local trade group.
“The Russia and Ukraine markets have basically come to a standstill,” said Wang Xin, executive chairwoman of the Shenzhen Cross-Border E-Commerce Association.
The abrupt halt in business for Shenzhen merchants came as major Russian banks were sanctioned by the US and European Union, while logistics operations have also been disrupted after many Western shipping and delivery firms suspended services to Russia.
However, Wang said the overall impact on online cross-border trade was not significant as Russia and Ukraine accounted for a “relatively small share” of the total.
Among the platforms, Wang said AliExpress, the global marketplace operated by Alibaba Group Holding, was one of the hardest hit because Russia is a big market for merchants on the platform. Alibaba owns the South China Morning Post.
AliExpress did not immediately reply to a request for comment.
Russia topped AliExpress Singles’ Day sales in 2019, while Ukraine was among the top five that year, according to figures released by the company at the time.
The impact of the war on Chinese trade is set to go beyond just Russia and Ukraine, according to some local merchants. Ryan Li, chief executive of a Shenzhen-based home appliance company, had seen booming sales in Europe until his business hit a speed bump last week.