Business Plan of block chain in cross border trade –1
Market Research
The technology is ready, now comes to the business.
Our Target Market: Canada, China, ASEAN (South East Asia)
A. Demands in the Market
1. Different types of demand: Purchasing power
Population:
In 2018, the total population of all ASEAN (South East Asia) states amounted to an estimated 647.74 million inhabitants. China 2020 population is estimated at 1,439,323,776 people at mid year according to UN data. Canada 2020 population is estimated at 37,742,154 people at mid year according to UN data.
GDP:
According to the report of wikipedia, GDP (PPP) in ASEAN (South East Asia) in 2019 is 8,454,651 millions, that means 8,454 billion US dollars.
https://en.wikipedia.org/wiki/List_of_ASEAN_countries_by_GDP
The Gross Domestic Product (GDP) in China was worth 14342.90 billion US dollars in 2019, according to official data from the World Bank and projections from Trading Economics.
https://tradingeconomics.com/china/gdp
The Gross Domestic Product (GDP) in Canada was worth 1736.43 billion US dollars in 2019, according to official data from the World Bank and projections from Trading Economics.
https://tradingeconomics.com/canada/gdp
Although Canada has the lowerest GDP that just 1/8 of China and 1/4 of South East Asia, Canada’s population is 1/38 of China and 1/17 of South East Asia. Canada has the greatest purchasing power in per capita. As Canada has the smallest population but get the greatest purchasing power and biggest area, Canadian will demand more high value product. Vice verse, China and South East Asia has a great demand but with less purchasing power, their demand will more in low value product. Of course, for common people, everyone is looking for best quality products in lowest price. Just base on the data, the Canada market would focus more in quality and China and South East Asia market focus more in the price.
2. Different types of demand: From Artic to Equator
Canada is a country in the northern part of North America. Its ten provinces and three territories extend from the Atlantic to the Pacific and northward into the Arctic Ocean, covering 9.98 million square kilometres, making it the world’s second-largest country by total area.
China,covering approximately 9.6 million square kilometres in East Asia. Because of its varied topography and terrain conditions, its climate is complicated and diversified from region to region.
South East Asia is the only part of Asia that lies partly within the Southern Hemisphere, although the majority of it is in the Northern Hemisphere. The region lies near the intersection of geological plates, with both heavy seismic and volcanic activities. Southeast Asia covers about 4.5 million km2 (1.7 million mi2), which is 10.5% of Asia.
Differential in landform produce differential demand in different region. It produces a big market for a great variety of goods.
B. Competitive and free trade market between Canada, China and South East Asia
CPTPP with ASEAN
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam…At the time of its signing, the eleven countries’ combined economies represented 13.4 percent of the global gross domestic product (approximately US$13.5 trillion), making the CPTPP the third largest free-trade area in the world by GDP.
https://en.wikipedia.org/wiki/Comprehensive_and_Progressive_Agreement_for_Trans-Pacific_Partnership
The CPTPP competition policy chapter furthers the parties’ goal of creating a fair, transparent, predictable and competitive business environment that ultimately benefits consumers and businesses.
RCEP with ASEAN
The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement in the Asia-Pacific region between the ten member states of the Association of Southeast Asian Nations (ASEAN), namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, and four of ASEAN’s FTA partners—Australia, China, Japan, New Zealand, and South Korea., which is also ASEAN’s FTA partner, opted out of RCEP in November 2019.
https://en.wikipedia.org/wiki/Regional_Comprehensive_Economic_Partnership
The objective of launching RCEP negotiations is to achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement among the ASEAN Member States and ASEAN’s FTA partners. The RCEP negotiations commenced in early 2013.
https://asean.org/?static_post=rcep-regional-comprehensive-economic-partnership
CPTPP is going to produce a competitive market. The objective of RCEP is to setup a free trade agreement in wide aspect of business. As Canada joined the CPTPP and China involved in the RCEP, ASEAN becomes the link of Canada and China. The goal and objective of the treaties is clear but how to setup this competitive and free trade market? Platforms need to be setup to meet fulfill the target of the above treaties.
By Kong Yuk Kan 2 September 2020 in Vancouver, B.C., Canada
Research in the online shopping platform in Canada, China and South East Asia
A. Online shopping platform in South East Asia
The top ten most-visited eCommerce websites in Southeast Asia:
Visits in millions:
Shopee—2,062; Lazada—1,844; Tokopedia—906; Bukalapak—646; thegioididong—351;
Sendo—323; Tiki—293; Blibli—290; Dien may XANH—127; FPT Shop—101;
Shopee, Lazada, Tokopedia (Indonesia), Bukalapak (Indonesia), The Gioi Di Dong (Vietnam),
Sendo (Vietnam), Tiki (Vietnam), Blibli (Indonesia), Dien May XANH (Vietnam), FPT shop (Vietnam)
Shopee and Lazada is the biggest and cross Greater Southeast Asia.
Shopee is being partially owned by China’s Tencent.
Lazada invested by China’s Alibaba.
Information from: www.tmogroup.asiamust-know-southeast-asia-online-marketplaces
Then the others is serve the local Indonesian and Vietnamese. As Indonesia has more than 200 million of population and Vietnam has nearly 100 million of population, their online shopping platform get more visit than other South East Asia countries’.
B. Online shopping platform in China
The online shopping is famous and should be the number 1 in the world and most of the Chinese already accepted and used to use online shopping in their daily life.
There are so many online shopping platform in China and they are all giant company with highest technology:
Taobao.com, Tmall.com, 360buy.com, Sunning & Gome, QQ buy, Dangdang, Vancl, 51buy & Coo8,
Yihaodian, Meituan &55tuan, Dianping, Taoboa Juanhusuan, Mbaobao, Redbaby, Jiuxian,
La Miu, Vipshop, Fclub, Meilishuo, Mogujie, eTao.
Most of the platforms focus in different industries or business, such as Sunning & Gome focus in selling the electric and electronic appliance, Meituan focus in food and beverage, etc.
C. Online shopping platform in Canada
Top 10 Canadian e-commerce platforms:
Amazon Canada, Walmart Canada, eBay Canada, Canadian Tire, Best Buy Canada,
Home Depot Canada, Costco Canada, Etsy Canada, Hudson’s Bay, Newegg Cananda.
Most of the online shopping platform (e-commerce platform) expands from the traditional shop and highly connected with the offline shop.
From the research we can find out most of the online shopping platform focus in the local market, not the cross border trade. Until now if a Canadian want to buy something from China’s Taobao, they need a so call Taobao agent and Parcel Forwarding.
https://en.aioexpress.com/region/canada
By Kong Yuk Kan 3rd September 2020 in Vancouver, B.C., Canada
Business Plan of block chain in cross border trade — 3
Business Structure
1. Multi-Platform
To handle the cross border trade, one platform to dominate is not realistic in this circumstance. Our solution is a multi but coordinate platforms. Each region would setup a major platform to communicate and connect with another platform by block chain system and concept. The status quo of all major platform is equal. Our solution is running in a truly distributed concept.
2. Not just a platform
The major platform is not only do the online shopping business, it will also provide the service such as import/export support, warehouse storage, payment gateway and has strong connection with the local shops, contractors and suppliers.
3. Focus and independence platforms
Each major platform focus in one region:
–Singapore Platform will focus in the South East Asia region. A regional payment gateway has connected to this Platform. This payment gateway accept different currency in the region, such as Vietnam Dong, Malaysia ringit, Thailand Baht. The Singapore platform will provide multiple language support. It will also become the connector of all the platforms in the region. The other regional platform can go through the Singapore platform to get the service of block chain.
–Vancouver platform focus in North America but there are only 3 countries in North America, the system of Vancouver platform is much simpler than the Singapore platform. However, the Vancouver platform need to provide a stronger warehouse and storage service to meet the custom rules in Canada and the long shipping distance.
Both Singapore and Vancouver platform would handle the credit system base on different culture and different environment. However, the 2 credit system will have common credit value and the criteria of marking will open to the public for all regions.
The setting up of the major platform would strictly follow the local legal rules. The major platform fully rely on the local people that well-known the history and the culture of the region. The remote control or direct management from other region is unacceptable.
4. Strong connection of the major platforms
There is a strong direct internet connection between the major platforms, that means the major platform would connected by ip address, not the domain name. Although local platforms can communicate with a region’s major platform, only major platform can communicate with the other major platform in another region.
By Kong Yuk Kan 7th September 2020 in Vancouver, B.C., Canada
Business Plan of block chain in cross border trade — 4
Business Development Stage
Stage One — Half opened business platform:
In this stage, the platform will take up the purchasing and selling itself. The platform will promote and sell products that provided by a small number of companies which has strongest connection with the platform. The platform will looking for products that has high market potential. The platform would also try to promote the products from social industry in different region. In this stage the platform will focus more in testing how to combine the block chain technology in real business. The experience that accumulated in this stage will help to provide more information to the buyers and seller. The platform would directly handle all the logistic, custom service and storage to build up the working model for stage two.
Stage Two — Fully Opened cross-border platform:
In this stage the platform would become a gateway for the other platform to do the cross border trade and release more of the job in purchasing and selling. The platform would focus to open the APIs for the other platform and provide as much as possible information to the market. The platform would enhance the connection with other platform and will become an agent in the cross border trade in B2B business model.
Become a monitor system and the judge to enforce the B2B smart contract, provide logistic and cross border payment service, analyzer in the information and guarantor of the seller and even some buyers.
The platform will become a “trust” provided system.
Base on the new institutional economics, the externalities would be a factor to make the free market fail. To produce a free and competitive market, the platform will try to decrease the negative externalities and encourage private value to meet social value (positive externalities).
The platform’s promotion system not only base on facts, data and the credit system, but also encourage the products that produce less negative externalities in the production process.
The checking and monitoring the production of the product and show the data and information to the buyer that expect the buyer can make the decision that include to decrease the negative externalities such as pollution and go for fair trade or green production. If the buyer can decrease the negative externalities and t will prevent the government using the tariff or tax to compensate the negative externalities. If so, the consumer would then has more cash in hand to buy the products. It will generate a good circulation in the local market.
“The Nature of the Firm” (1937), is an article by Ronald Coase. It offered an economic explanation of why individuals choose to form partnerships, companies and other business entities rather than trading bilaterally through contracts on a market. The author was awarded the Nobel Memorial Prize in Economic Sciences in 1991 in part due to this paper.
https://en.wikipedia.org/wiki/The_Nature_of_the_Firm
The platform will become Coase’s theory of the firm and it will become a testing ground to setup the system, rules and monitoring can help to produce a free, competitive market in the cross border trade. Free and competitive market is not produced by absolute freedom but by suitable system, rules and monitoring.
By Kong Yuk Kan 8th September 2020 in Vancouver, B.C., Canada
Business Plan of block chain in cross border trade — 5
Business Revenue Model
Our business is running on private fund, so revenue is our main concern to keep the business survive and continue. The revenue model is not competing for lowest price to sell high amount. Our model is searching for the value of “TRUST”. How much would the buyer willing to pay for the “TRUST”?
The addon value of “TRUST” would become the Pigouvian subsidy to encourage the good behaviour of the producer. We hope we can use the subsidy (purchasing power) to match the private value with the social value.
“A pigouvian subsidy is a subsidy that is used to encourage behaviour that have positive effects on others who are not involved or society at large.”
https://energyeducation.ca/encyclopedia/Pigouvian_subsidy#
Market size:
“As a group, ASEAN member state economies represent Canada’s sixth-largest trading partner (2018). In 2018, Canada-ASEAN merchandise trade reached $25.1 billion.”
“On a balance of payments basis, Canada imports about twice as much from China as it exports. In 2019, imports from China totalled $46.8 billion, and exports to China settled at $24.4 billion. China was Canada’s second largest trading partner for both imports and exports in 2019.”
https://www150.statcan.gc.ca/n1/daily-quotidien/200306/dq200306b-eng.htm
“In 2019, China’s trade volume with ASEAN climbed by 14 percent to 4.43 trillion yuan.”
Source of Revenue:
1. Commission
2. Service charge
3. Issuing certificate
4. Data analyze
5. Direct sales
6. Currency exchange
Our solution not only want to generate profit for our investors, but also want to generate benefit to:
The benefit to the:
1. Consumer: provide the best quality, genius product.
2. The manufacturer/farmer:
Provide them an oversea market to sell their organic, green, fair trade products.
3. The Society:
Produce a trust cross border trade system and the good seller of good products will encourage the good production in their local countries. We also expect a high, competitive cross border trade market can help the economic of a countries go for “Pareto efficiency”.
“Pareto efficiency or Pareto optimality is a situation where no individual or preference criterion can be better off without making at least one individual or preference criterion worse off. “
https://en.wikipedia.org/wiki/Pareto_efficiency
By Kong Yuk Kan 9th September 2020 in Vancouver, B.C., Canada
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