Carlo Pan admits that Freelife Solutions’ business model would not work without the mass digitization of commerce around the world and – more specifically – in China.
But thanks to the booming e-commerce ecosystem in the world’s second-largest economy, Freelife – a tech-based business marketing firm based in Richmond – might soon be able to offer B.C. small and medium-sized producers of certain products to sell directly into China without an established bricks-and-mortar storefront or existing importer/exporter expertise.
Pan, the company’s CEO, compares Freelife’s model to that of Uber and Airbnb – creating a platform for suppliers of a certain product to post their goods, and linking potential clients to the same platform so that buyer and seller can talk directly. Whereas Uber and Airbnb provide transportation and accommodation services, Freelife offers market access opportunities to China.
“Let me give you a specific example,” Pan said. “We’ve linked up Oceans Fresh Food Market, a Toronto-based supermarket, with China’s Fruitday.com, a company that distributes foreign fruits in China through online order. There are Chinese online vendors that are constantly looking for stock, and many are looking at Canadian foods because the Canada brand carries a pristine reputation.”
Pan said that as more Canadian companies sign on to sell their products to a Chinese vendor’s network, they can all use the same vendor’s import-export network to ship their goods to Asia, dramatically lowering costs and effort. The vendor would also put the Canadian products directly online for Chinese consumers to browse first-hand.
Cross-border e-commerce is a growing trend in China. According to consultancy McKinsey & Co., Chinese consumers bought 259 billion renminbi ($55 billion) worth of international goods online in 2015, 6% of the country’s total e-commerce figure.
The advent of social media apps like Tencent’s WeChat, which builds payment and financial transaction capabilities directly into instant messaging networks, means that a cellphone is all one ever needs to browse and buy a product or service.
In addition, McKinsey said Chinese authorities have “created a favourable postal duty of 10% to 50% for a large list of personal-use items” to further encourage sales of certain products through e-commerce.
Chinese tech giant Alibaba (NYSE:BABA) and U.S.-based Amazon (Nasdaq:AMZN) both have major designs on the market, in which Freelife wants to participate by introducing a Canadian component.
The company’s “ace in the hole,” Pan said, is a partnership with C Media Rail WiFi Ltd., a tech company that provides 50% of Wi-Fi services on Chinese train networks.
Pan said Freelife has already rolled on a “Canada channel” on the Wi-Fi service’s home page, meaning passengers onboard going online – a captive audience – could buy Canadian goods directly on their phones and have it delivered to their homes.
“If people don’t understand the concept we are trying to execute, that’s normal because it’s so new here,” Pan said. “But these services, if enough Canadian companies take up on it, give local businesses an affordable and efficient way to access China. The sharing economy like Uber and Airbnb is the future; that’s how companies can access demand beyond what you see in the Lower Mainland.”
Freelife plans to launch the “Canada channel” concept on China’s high-speed rail network, where higher-spending consumers travel, later this year. Pan added that the most sought-after Canadian products remain food-related items like seafood, fruits and wines.