Shandong Province has the largest number of excavator-related enterprises, with Jining City being a hub for the machinery industry, including excavators, and boasting a large number of machinery manufacturing enterprises. Unlike well-known large-scale engineering machinery equipment manufacturers such as XCMG, Sany, and SDLG, Jining also has unconventional excavators for engineering use, which may find their end-users in farmers in the US and European markets, and even households.

In the traditional business model, such products were primarily sold overseas through agents and distributors. However, emerging products like mini-excavators are now flowing directly to overseas retailers and end-users like farmers through online channels. Jining has capitalized on both product and industry booms by innovating in product types and distribution models.

Half of the top 10 industries with the highest online transaction growth rates on Alibaba.com in the first half of the year were related to machinery and construction materials, particularly in the construction machinery sector, where products like excavators, loaders, and drills saw online transaction growth rates exceeding 50%. Since April this year, the number of new Jining merchants joining Alibaba.com has increased by 76.2% year-on-year.

Global trade is entering a new phase of explosive growth.

According to customs export data, China's total foreign trade exports in the first half of this year increased by 6.9% year-on-year. Not only has overseas infrastructure construction picked up, but sporting events in the first half of the year have also contributed to the growth of foreign trade exports. For instance, the highly anticipated Paris Olympics set new global viewership records. Since the beginning of the year, merchants related to the Olympic economy on Alibaba.com have generated over RMB 7 billion in online exports. Even niche sports goods industries have been boosted by the Olympics, with factories in traditionally slow seasons remaining operational.

This widespread traffic has propelled Alibaba.com to the fourth position in download rankings across multiple mainstream markets in the first half of the year. A B2B e-commerce platform focused on corporate customers consistently ranking high in downloads signifies the rapid digitization of B2B trade, enabling industries to quickly tap into overseas markets and find stable growth opportunities.

01. Either Expand Overseas or Fall Behind

The "45 square meter workshop" was where Jining Saoao started its business in 2007. As Jining itself is a mining area, Han Guangfei, the company's general manager, initially aimed to provide processing, parts, and accessories to others. However, the first six months were not smooth sailing.

In 2008, Saoao shifted focus to manufacturing complete machines, aiming to build a brand and sell products without restrictions. The company gradually evolved from a small workshop-style management to a more institutionalized, systematic, and standardized operation. In 2013, Han Guangfei dabbled in foreign trade under the guidance of a friend, but domestic trade remained the dominant force, accounting for 80% of Saoao's business, with foreign trade making up the remaining 20%, a trend that persisted until 2018.

The tide turned in 2019, when the domestic market began to decline amidst fierce competition. Han Guangfei realized the need to lay the groundwork for foreign trade early on, expanding the team from two or three people to 15 within a year. Starting in 2021, with the help of Alibaba.com, Saoao's foreign trade orders surged, accounting for 60% of its total business to date. "By the end of this year, foreign trade is expected to account for 70% of Saoao's total business," Han predicts.

Foreign trade has inspired Han Guangfei's business to some extent.

In the past, when foreign customers came to buy his excavators and road rollers, they might also need other domestic products but preferred not to travel extensively. They would ask Han to source these products for them. Aiming to become the "most popular procurement service provider," Han hopes overseas customers can procure all the machinery and equipment they need for their projects in one stop at Saoao, saving them the hassle of traveling. This led Han to position Saoao as a "small factory, big trade" enterprise.

"I'll handle all after-sales service, and I can guarantee product quality," Han assures.

When The Wandering Earth 2 premiered in early 2023, Han Guangfei watched as 16 lighting trucks with "UEG" logos illuminated Wu Jing's face in the cinema. At the end of the film, the name of sponsor "Jining Saoao" stood out prominently. An even bigger surprise came from overseas. As the film was released globally, overseas customers reached out to Saoao through Alibaba.com. One UK customer specifically requested the "engineering lighting truck" and traveled to the site to select four of the same white models used in the film crew.

According to Han Guangfei, overseas sales of this engineering lighting truck have increased by 50% year-on-year this year, further enhancing Jining Saoao's global reputation.

Online transactions for large machinery have traditionally been challenging. Firstly, transactions often involve substantial payments, relying heavily on traditional offline payment methods in the past. Secondly, fulfilling and customizing large machinery is more complicated, often requiring numerous freight forwarders and shipping companies, making it difficult to establish a streamlined transaction loop.

Alibaba.com's solution focuses on resource integration.

For payments, Alibaba.com has designed different currency settlement options for different country markets, ensuring smooth receipt and payment through online channels. Similarly, tailored to different markets, Alibaba.com integrates Alibaba's logistics and supply chain resources to provide targeted logistics solutions for machinery exports. Additionally, based on industry characteristics, Alibaba.com showcases products' definitive specifications and attributes online, ensuring buyers see exactly what they get.

Ensuring that both buyers and sellers trust the platform's transaction information, payment environment, and transportation solutions is crucial for the export and digitization of machinery products.

Currently, benefiting from Alibaba.com's robust growth, Jining Saoao continues to expand its overseas presence.

In the first half of this year, Saoao extended its business from Europe and America to Central Asia. To expedite product delivery, Han Guangfei has deployed overseas warehouses in Indonesia and Dubai, UAE.

Increased investments are evident in various aspects. In terms of personnel, Saoao has expanded its workforce from 200 last year to approximately 260, covering material preparation, technology, assembly, sales, and procurement. In terms of production materials, the company has procured new laser cutting machines, CNC machines, and steel tube cutting machines this year.

Han Guangfei's experience on Alibaba.com has honed his foreign trade instincts. While the industry was still skeptical about the concept of "environmental machinery," he took the lead in launching "green machinery" supported by new energy sources in 2021, following demands from European and American customers on Alibaba.com.

Currently, the demand for environmental machinery is growing year by year, accounting for nearly 10% of overall shipments.

"Either Expand Overseas or Fall Behind. It's better to make mistakes than miss out," says Han Guangfei, drawing on over a decade of industry experience.

02. Embrace the Platform

Doing business in unfamiliar cultural contexts can be challenging, with obstacles at every step.

Shandong Hengwang Group, also in the machinery industry, has been in a period of rapid development for over a decade, thanks to General Manager Liu Mingtao's realization in 2012 that the foreign trade market offered broader opportunities and higher profit margins.

In 2013, Hengwang officially opened a store on Alibaba.com. According to Liu Mingtao, orders from Alibaba.com have grown by 40%-100% annually. To date, orders from the platform account for approximately 70% of the company's foreign trade revenue.

However, when Liu Mingtao first joined Alibaba.com, he was a complete novice, unfamiliar with foreign trade, English, or platform operations, relying solely on his trust in the platform. "Whenever Alibaba.com launched new products, strategies, or tools, I would actively try them out and achieved excellent results," he shares.

Take Alibaba.com's recently launched AI Business Assistant as an example.

In 2012, it was difficult to find suitable foreign trade salespeople in Jining, let alone cross-border e-commerce operators. To address staffing issues, Liu Mingtao set up branches in Beijing and Shanghai and arranged for employees to work across the three locations. While this solved staffing and retention problems, it came at a high cost.

Today, AI has transformed foreign trade workflows, providing full-time coverage and mitigating customer loss due to time zone, language, and cultural differences. Employees no longer need to work shifts to accommodate foreign clients' schedules, and AI can handle late-night orders efficiently. As a result, Liu Mingtao's company has almost zero turnover among foreign trade staff.

This year, Hengwang's growth on Alibaba.com has reached 80%-90%, with equipment selling for 3-5 times the price overseas due to the company's focus on high-quality development.

At the Greenwich Forum in June, Alibaba.com President Zhang Kuo likened Alibaba.com's AI-powered foreign trade to a "smart driving" system for SMEs. In this process, AI handles the complex tasks, while SMEs, as business entities, press the final "confirm" button.

SMEs new to cross-border e-commerce may lack dedicated e-commerce personnel and be less skilled in platform operations. In the past, sellers had to fill in product descriptions, keywords, and shoot product images, but now AI can handle these steps. Tasks like product operations, market insights, and business performance analysis can also be streamlined with AI.

From the buyer's perspective, AI's information comprehension and generation capabilities serve as efficiency tools. For instance, AI can generate product images, descriptions, and RFQs based on descriptions to precisely match suppliers. Additionally, Alibaba.com is exploring integrating AI into more application scenarios, such as AI-powered virtual tours and digital human broadcasting, significantly expanding the possibilities of foreign trade.

Tool iterations continue. At a launch event in Paris in late July, Alibaba.com unveiled an enhanced AI Business Assistant feature that can reduce product listing time from 60 minutes to as little as 60 seconds.

03. From Yiwu to Jining

Before "Flourishing" became a topic of conversation in 2023, Yiwu already boasted a "Bao Zong" navigating the world of foreign trade.

Chen Jinbao's artificial flower business began by chance. "I started by selling women's clothing at a Yiwu night market, but business wasn't great. Following a friend to the market, I stumbled upon artificial flowers, which could be sourced for just RMB 500. With low startup costs, I decided to give it a try," he recalls. This unplanned venture has spanned 13 years since his graduation.

Since establishing roots in Yiwu in 2011, Chen Jinbao's Duofu Artificial Flowers Co., Ltd. has built a supply chain system centered in Yiwu and radiating nationwide, giving him confidence. "Approach foreign trade with an e-commerce mindset and domestic trade clients with a domestic mindset" is Chen's methodology for tapping into overseas markets.

When Alibaba.com pioneered the semi-managed model in the B2B foreign trade sector earlier this year, Chen Jinbao was among the first to join, listing two to three hundred products. Sellers manage their own operations and pricing, while the platform handles the most complex aspect of cross-border logistics. In the past, Chen's customized clients often required extensive communication with salespeople, but under the semi-managed model, product and logistics prices are fixed, with most overseas customers placing orders autonomously.

During Alibaba.com's March New Trade Festival this year, Duofu secured over RMB 3 million in sales on the platform. Chen Jinbao's location in Yiwu's Beiyuan district is home to a cluster of Alibaba.com merchants like him, purely focusing on online foreign trade.

The concept of "cross-border e-commerce + industrial clusters" was proposed earlier this year by Wang Shouwen, China's International Trade Representative and Vice Minister of Commerce. In fact, the overseas expansion of industrial clusters has long been underway in Yiwu, the "City of Small Commodities." In 2019, Alibaba.com launched a Yiwu online zone to facilitate online fulfillment of exports. Today, Yiwu boasts numerous "Alibaba.com Towns" and "Alibaba.com Communities," offering a comprehensive range of products, including furniture, apparel, and ceramics.

From Yiwu to Jining, from the "City of Small Commodities" to the "High-End Equipment Industry Base," Alibaba.com is actively driving the digitization of transactions across various industries, achieving comprehensive coverage of high-end, mid-range, and low-end industrial clusters. This expansion is not merely about adding services; it's grounded in a commitment to "simplification."

Both semi-managed services and AI tools embody the "minimalism" approach, reducing the complexity of foreign trade for merchants, reaching more buyers, and thereby increasing the penetration of digitization in global trade, unleashing the potential of B2B digital trade.

Digitization and online transformation are irreversible trends. As Liu Mingtao puts it, "Twelve years ago, 99.9% of the businesses around me had no idea what I was doing. Five years ago, 10% of people started coming to me for advice. Now, 90% of businesses want to know how to excel in cross-border e-commerce."

The current global trade volume stands at approximately USD 20 trillion, significantly larger than the B2C market. However, the digital penetration rate in B2B trade remains low, hovering around single digits. This indicates a burgeoning market with immense potential.

*Images in the lead and body of the article are sourced from the internet.