NetEase Yanxuan Teams Up With Jiangsu to Help Taiwanese Firms Shift to E-Commerce

Xu Huiyun / Yicai


(Yicai Global) May 14 -- Major Chinese internet player NetEase Yanxuan has inked an agreement with local governments to help Taiwan businesses sell online.

NetEase Yanxuan recently signed a strategic cooperation agreement with the Jiangsu government’s Taiwan Office and Kunshan city government.

The NetEase Inc. [NASDAQ:NTES] subsidiary will help Taiwan-funded enterprises in south-central Jiangsu province switch to e-commerce to transform and upgrade their businesses.

The three parties will set up a joint working group to jointly promote e-commerce for Taiwan-funded firms based in the Kunshan Cross-Strait E-Commerce Economic Cooperation Experimental Zone, per the agreement.

The Taiwan-funded enterprises were originally export-oriented, but now face difficulty with promotions, and suffer from high costs and low efficiency as they start to open to the domestic market. E-commerce is a possible solution to these problems.

More than 10 Taiwanese manufacturing enterprises have thus far contracted with NetEase Yanxuan. They are Qingyuan Guangshuo Group and long-term original equipment manufacturers for Nike, Adidas and other well-known sports brands.

Netease Yanxuan is Netease's original e-commerce arm. It has direct links with big-name manufacturers through an original design and manufacture mode, and sells generic products by removing the brand premium and eliminating intermediaries.

More than 70% of Taiwanese businesses on the mainland do business in Jiangsu province because of its infrastructure and proximity to Shanghai. Jiangsu has approved more than 26,000 Taiwan-funded projects, with actual investment of USD71.7 billion. Trade between Jiangsu and Taiwan makes up more than one-fifth of the cross-strait trade volume.

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