For Candice Zhang, a small cross-border merchant based in the southern Chinese tech hub of Shenzhen, the past three weeks have been particularly tough for her business. She has lost about half her usual orders since the start of the Russia-Ukraine war at the end of February, and this week her cross-border e-commerce business has completely ground to a halt due to the city’s lockdown to deal with a Covid-19 outbreak. “The lockdown is a major challenge for us because we can’t ship our products,” said Zhang, whose store mainly sells daily use products. “Buyers will cancel their orders if we keep postponing shipments because the products we sell can be found elsewhere.” “Not being able to ship means we don’t have any revenue coming in, and how can a small company like us survive without any income,” added Zhang. Hong Kong facing shortage of coffins, funeral offerings from mainland China Anxiety is mounting across the vibrant cross-border merchant community in Shenzhen, a major base for cross-border trade in southern China where an estimated 40,000 merchants sell products, mainly electronics and daily use goods, to overseas consumers via different e-commerce platforms. This river of goods has been suspended though after Shenzhen’s local government last Sunday imposed a citywide seven-day lockdown for residents after reporting 66 new Covid-19 infections, with public transport including the subway and buses closed and people ordered to work from home until March 20. Zhang’s company and warehouse is based in the northern Longgang district of the city, which is a base for cross-border e-retailers. Zhang said she managed to get into the warehouse on Monday to retrieve some packages but she was not allowed to enter on Tuesday. “I understand some of the policies are necessary, but I genuinely hope the government can take into account the difficulties our industry faces when they draw them up. Even if they can allow one entry per week for one or two employees, that would have been really helpful,” she said. Zhang needs to look after her customers and 10 employees and she has no idea how long the current uncertainty will last. “This is too tough. We were already struggling because of the war, and now I really don’t know what I can do.” Most of Hong Kong’s cross-border truckers ‘could lose jobs’ amid tough Shenzhen rules Most major logistics companies, including Shenzhen Sinotrans and Shenzhen JYD Logistics, last week announced they were suspending all entry and exit to their main warehouses, with satellite warehouses only receiving goods without onward shipping. Wang Xin, executive chairwoman of the Shenzhen Cross-Border E-Commerce Association, said that logistics and warehouses for cross-border e-commerce had “largely ground to a standstill” due to all employees being banned from entry. The trade group, which represents over 2,600 companies in the city, has been in touch with the government’s commerce agency to make an appeal on behalf of the industry, but the authorities said that pandemic control was the priority for the time being, said Wang. Shenzhen’s cross-border e-commerce businesses make up about 35 per cent of the sector in China, according to the trade body. The port of Shenzhen has the fourth largest goods-handling capacity in the world after Shanghai, Singapore and eastern city of Ningbo, according to shipping intelligence provider Alphaliner’s 2021 report. Hong Kong ‘should learn from Shenzhen’s organised’ Covid-19 lockdown’ And the impact of the Shenzhen lockdown is affecting merchants in other parts of China. Maggie Fan, a Chengdu-based hardware exporter who conducts e-commerce business with clients in Europe and the Americas via Alibaba International, said her delivery company in Shenzhen is expected to resume business next Monday. Alibaba Group Holding, which owns the international B2B platform, also owns the South China Morning Post. Some of Fan’s Chengdu fellow exporters use local logistics services to ship worldwide, but she and others ship from Shenzhen because of greater choice and lower costs. “We are telling our clients that their orders may be a week late. For new orders, we are shipping directly from Chengdu to avoid potential delay,” she said. Shenzhen’s lockdown is just the latest example of how China’s zero-tolerance approach to Covid-19 can rapidly translate into supply chain disruptions in the world’s second-biggest economy. Shenzhen, with around 17 million residents, reported 55 new confirmed cases on Tuesday, as it battles a surge of infections caused by the highly-transmissible Omicron variant of Covid-19. The neighbouring industrial city of Dongguan followed up on Monday with similar lockdown measures and 24-hour checkpoints in all residential compounds and villages. The Taike area of Dongguan’s Songshan Lake Hi-Tech Industry Development Zone, which borders Shenzhen, has been marked as “high-risk” by authorities since Tuesday afternoon. Songshan Lake Zone is the home base for many large cross-border e-commerce players, including DHgate.com’s southern China operational centre. The company did not immediately respond to questions from the Post about the potential impact on its business.