How does the global outbreak of COVID-19 impact upon cross- border e-commerce supply chain resilience? A qualitative research based in China

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How does the global outbreak of COVID-19 impact upon

cross-border e-commerce supply chain resilience? A qualitative

research based in China

Student name: Xingyu Zhang

Subject: MSc. Operation Management (dual award)

Student number: S4247728 at University of Groningen 190456667 at Newcastle University

Supervisors: Ms. Esther Metting from University of Groningen Ms. Rebecca Casey from Newcastle University

Word count: 12479 Date: 27th_{, April, 2021}

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Abstract

Nowadays, with continuous innovation in the field of supply chain management, more and more attention has been paid to the concept of supply chain resilience.The COVID-19 outbreak has hit the manufacturing supply chain in an unprecedented way. Companies engaged in cross-border e-commerce industry significantly disrupted by the Covid-19. It is important to for many companies to build effective supply chain resilience in order to

mitigate the crisis impact during the post-Covid stage. However, there is no relevant literature to analyze the harm of cross-border e-commerce during the epidemic period. This research provides implications for the small cross-border e-commerce companies in China in order to build resilient supply chain during the pandemic era. This research has employed the

qualitative research methods to collect the primary data. Eight interviews have been conducted with operation managers of cross border e-commerce companies in China. Inductive research approach has been adopted to analyse the qualitative data. Exploratory research design using the semi-structured interviews to collect primary data is included. The first finding in this research identified that during the epidemic, the supply chain factors affecting the cross-border e-commerce industry include "factory shutdown, insufficient transportation capacity, demand fluctuations” etc. The second finding is that simply relying on traditional supply chain strategies are not adequate to deal the current pandemic and small companies need to rethink or rebuild about their supply chain network such as finding

multiple suppliers to disperse risks. Thirdly, this research identified that small companies are facing significant challenges due to their insufficient capabilities and resources. Therefore, they need to shift their burdens. For example, by using overseas warehouse can reduce the risk of delay in delivery. However, this research relayed on qualitative research methods, it allowed the research to understand the depth of the issue but drawing conclusions based on small sample size may produce biased outcomes.

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Preface

This dissertation cannot be finished without the help and support of numerous individuals. Firstly, I would like to thank my dissertation supervisor, Ms. Esther Metting and Ms. Rebecca Casey, who has read my drafts several times and provided me with constructive feedback. With her suggestions and feedback, I have improved my work significantly. In addition, I would like to express my sincere gratitude to my interviewees, since their participation has provided abundant personal views towards relevant topics in my research. Based on their views, I have combined various theories and concepts with the real business scenarios, which contributes to the completion of this research. Finally, I am deeply indebted to the University of Groningen and Newcastle University who offered me this opportunity to conduct this research. Although this research was conducted during the global outbreak of COVID-19, I have dedicated to completing this research and learned some lessons that are beneficial for my future career. I have learned how to identify the research gap, form research questions and critically analyze the research data. I will keep improving my academic skills in the future study.

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1. Introduction

1.1 Research background

Supply chain research has become more extensive in recent years. Supply chain disruptions or risks are more common in global supply chain management. Any disruption caused in supply chain may impact negative consequences. Michelman (2007) argue that a few companies cope far better than others with both the prospect and the manifestation of unquantifiable risk. They share a critical trait, which is the strong resilience. According to Hou et al. (2017, p.1), a strong supply network is quite possibly the main highlights of any business, since 'it advances coordination, mix, relationship building and cooperation all through the whole Supply network'. Previous pandemics, like “Severe Acute Respiratory Syndrome (SARS)” in Hong Kong, Mainland China, and Taiwan in 2003 pointed by David (2003); the monetary emergency in 2008, and the 9.0 size quake in Japan in 2011 caused the Fukushima Daiichi Nuclear Power Planet blast pointed” by Fujimoto and Park (2014), researchers began to consider the capacity of confronting the danger in production network the board. The disturbance of the Supply network frequently causes a progression of business misfortunes. To limit the event of misfortunes, supply chain network hazards the executives is slowly focused on by scientists. Supply chain network hazard the board can be characterized as "the administration of production network chances through coordination or joint effort among the production network accomplices to guarantee benefit and to establish (Tang, 2006, 451–488)". the National Institute of Research in the United States characterized production network flexibility most comprehensively. As indicated by the NAS (public foundation of sciences), versatility is expressed as "the capacity to get ready and plan for, ingest, recuperate from, and all the more effectively adjust to antagonistic events"(Nationalacademies.org. 2020). Now, the investigation into supply chain network strength turned out to be increasingly well known. The year 2020 can be viewed as a phenomenal year with the greatest unanticipated circumstance is the COVID-19 flare-up and related issues that accompany it. The disruption caused by Covid-19 is novel and much more challenging than the previous ones (Ivanov, 2020; Li et al., 2020). In the wake of COVID-19 and other disruptions, supply chain managers have to balance resilience and efficiency to secure their networks.

However, governments of different countries have effectively declared different lockdown policies approaches to forestall the spread of COVID19. Quite possibly the main approaches

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to control the spread of the infection is to decrease social contacts to control disintegration between individuals. Nonetheless, such measures can likewise have critical results. As per the International Monetary Fund (2020), financial stagnation is decidedly associated with the seriousness of lockdown severity. As the figure 1.1 shows, the tighter the lockdown, the greater the impact on the economy.

Figure 1: More stringent lockdowns are correlated with sharper economic contractions

Source: International Monetary Fund (2020)

Numerous counties' economies have been managed a deadly impact by the lockdown strategy. In any case, the economic effect of these barricades, particularly nearby cross-border e-commerce business, is of profound worry by important interest partie. As well as limiting individuals' activities, the constrained closure of production lines, the stagnation in the transportation of merchandise that caused the Supply network been impact is additionally an issue worth contemplating. As indicated by Rabouin (2020), China is the biggest provider of produced merchandise for the e-commerce business enterprises. However, because of the restrictions on the movement of people, the outbreak of many subsequent problems have been one after another,like unfit to create typically, incapable to follow through on schedule, variances in the demand and supply side.

A few studies such as states that China's makers were working at 50% manufacture limit capacity during the early stage of pandemic (Rabounin, 2020). A particularly unexpected decrease of creation is without a doubt seen as a phenomenal strike to the worldwide supply chain network. Interruptions of the chain of transportation (Figure1) and cross-border

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obstructions, for example, the colossal measure of reduction the capacity of shipping influence the progression of merchandise through the Supply network of e-commerce business in China introduced by OECD (2020). Another survey argues that it has been tracked down that about 62% of the organizations are getting postponed orders from the store network of China, and about portion of them encountering a deferral in the development of products inside the country (Guan et al., 2020). Furthermore, the volume of global traffic in mid 2020 likewise experienced uncommon huge scope decrease (figure 1), which is one of the negative impacts of COVID-19.

Figure 2: Sea and air payload are dropping strongly

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1.2 Research Problem

Statista (2020a) shows that during 2019, the Chinese e-commerce business organization recorded an income of 47 billion U.S. dollars. Cross-border e-commerce is increasingly seen as an important part of China's economy. Cross-border e-commerce is growing rapidly in China, and it is also an emerging industry. It does not require large-scale investment or purchasing of assets, but only needs to establish business contacts with manufacturers and foreign distributors. Therefore, the entry threshold of this industry in China is relatively low, which makes the majority of China's cross-border e-commerce companies are small and medium-sized enterprises (less than 100 people). The end customers of these small and medium-sized cross-border e-commerce companies are non-Chinese overseas customers, because their business purpose is to sell goods made in China to foreign countries in a faster way. As a result, individual customers usually buy goods from China on foreign platforms, especially Amazon, rather than through Chinese platforms. The following figure is an example of Amazon platform to show the business process model of the whole cross-border e-commerce:

Figure 3: A process of cross-border e-commerce business process in China

Above is commodity production from China to overseas individual customers process, in this thesis, the object of study mainly for China's cross-border e-commerce company as the research subject, because they play the role of coordinator in the whole business process, namely the need to contact China factory to produce goods, and also looking for

transportation company to shipping from China to the abroad. In addition, establish good credit with overseas sales platforms (such as Amazon). Therefore, the research focus of this thesis mainly focuses on these small cross-border e-commerce enterprises in China.

Cross Border e-commerce is an increasingly significant component of China’s economy and its growing share of foreign trade.However, Statista (2020a) is recorded that a huge decline in online business deals by 22% during the COVID-19 episode in China during the first quarter

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in 2020 Particularly, companies who sale commodity products in cross-border e-commerce business model significantly disrupted by the Covid-19. It is important to for the small companies to build effective supply chain resilience in order to mitigate the crisis impact during the post-Covid stage.

1.3 Motivation of the study

Under the COVID-19 pandemic, the labour resources and supply chain framework are disturbed (Williams, 2020). Hence, it is of great significance for any enterprise engaged in this industry to study the supply chain fluctuations especially caused by the lockdown policy for the cross-border e-commerce industry. Harris (2020) thinks numerous small business organizations identified with style and excellence in China neglect to keep a steady pace of supply through cross-border. The decrease of cross-border production network flexibility may bring about the decrease of business development in global areas which are these Chinese cross-border e-commerce business markets (Lam et al., 2019). What factors impact China has as the head of cross-border online business industry is significant in terms of how to improve supply chain resilience perspective.

Due the concept of "supply chain resilience" is an interdisciplinary subject in supply chain management research, it has not been developed into a mature theoretical research

framework, therefore, another goal of this thesis is to review and summarize the existing relevant academic articles. Nowadays, with the gradual advance of globalization, cross-border e-commerce is a typical industry related to global supply chain network. This thesis can take China's cross-border e-commerce industry as the research basis, and take COVID-19 as the main reason affecting the resilience of supply chain. On the one hand, it can fill in the research gap related to the supply chain resilience. On the other hand, it provides referential experience for practitioners, such as managers in who work in cross-border e-commerce companies based in China, which is of significance for theoretical research and practical operation.

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2 literature review

In this chapter, the author will critically discuss the retrospective academic research around the research problems. The main areas of discussion are the review of the development of supply chain resilience and the research on China's cross-border e-commerce supply chain. Based on these academic researchs, the author identifies some new research questions about China's cross-border e-commerce supply chain in the context of COVID-19 pandemic. In addition, some theoretical frameworks about supply chain resilience are also used for further research.

2.1 Supply network Resilience and Disruption

Supply Chain Resilience (SCR) refers to the supply chain capacity to forestall and retain changes and recover the underlying exhibition level after a sudden unsettling influence (Hendry et al., 2019). A significant part of the past works on SC resilience identifies with the measurement of resilience level prior to creating both reaction and recuperation (Hosseini et al., 2019;). In the wake of a troublesome occasion, huge parts in the supply chains will anticipate, be arranged, and comprehend the degree of the effect of a disturbance (Graveline and Grémont, 2017). They should devise techniques to react rapidly and reconfigure their assets to reinforce skills and adjust to the resulting impacts. Such reconfiguration and reestablishment of ability permit recuperating from disturbances (Hernantes et al., 2017). However, other views question the classical supply chain theory, such as Helmold (2020) pointed the “Lean Supply chain management” methodology as the basic supply chain management framework can hurt the supply chain resilience. This interesting view will be confirmed after the research results of this thesis are obtained.

Study on SC strength has concentrated on the forerunners for building SC flexibility, recuperation through Resilience in emergency, and the connection among flexibility and hierarchical execution. Numerous scientists have characterized strong SCM differently and have investigated and clarified it utilizing numerous administrative speculations. Hence, recognizing patterns in existing studys could fill in as an establishment for future SC strength contemplates Craighead et al. (2007: p.131-156) characterize production network interruptions as "spontaneous and unexpected occasions that disturb the ordinary progression of merchandise and materials inside a supply network." Bode (2011) investigates the reaction of data handling and asset reliance to the Supply network and tracks down that 'cushion' and 'scaffold' development assumed a pivotal part in decreasing the effect of Supply network distruption,

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like data lopsidedness and asset reliance. Ruel et al. (2019) express that there are a few components influence the production network strength, both outside and inside factors. The outer elements incorporate factors, for example, catastrophic events like Covid-19, flood, social flimsiness, and so forth; and the interior variables incorporate mechanical dangers, supply network organizations, and so on Golan et al. (2020) utilizes floods incident as a symbol for 'low likelihood, high danger' interruption occasions, and distinguished four sorts of production network tidal wave, and underscored the significance of reproduced conditions for representative preparing. As a rule, the acting of supply network strength stays at a moderately new stage. Be that as it may, contend that the supply network strength has not yet framed a total strategy, however the scholastic study on the supply network Resilience is very bountiful, particularly in the previous five years.

Another viewpoint of estimating the production network strength is therapeutic limit. Bhamra et al. (2011) issues a coordinated business coherence and debacle recuperation arranging (IBCDRP) model confronting the various interruptions from the venture inside association point of view. Sahebjamnia (2018) state how undertaking inner association viewpoint, particularly for small business can accomplish levels of flexibility as the basic way in this thesis the author talk about production network interruption.

2.2 The Factors that Affect the Supply Chain Resilience

The assessment of SC resilience in existing research have been basically overwhelmed by hypothetical and demonstrating approaches. Our study survey demonstrated that displaying and evaluation approaches of SC resilience could be arranged under two distinct classifications. The principal classification incorporates models dependent on measurements that straightforwardly evaluate SC resilience . Hosseini et al. (2019) for example, featured five assessment measurements identified with monetary, weakness, recuperation time, vulnerability, and strength improvement contemplations. Different creators, for example, Torabi et al. (2015) utilized execution misfortune to quantify provider limit and administration execution. Schmitt and Singh (2012) utilized recuperation time to assess the effect of production network interruptions. The second classification of evaluation models don't quantify SC resilience straightforwardly, yet rather endeavor to survey Resilience procedures. For instance, Jabbarzadeh et al. (2018) assessed Supply network weakness utilizing a multi-input-yield model for various moderation systems. Hosseini et al. (2020) assessed SC resilience by

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estimating provider isolation, including topographically collected providers. In any case, in spite of the wide collection of hypothetical investigations, the author note that the majority of them basically accentuated upon the requirement for more exact study on SC resilience assessment, particularly during episodes and problematic occasions.

Besides, past existing research on SC resilience has essentially centered around investigating the empowering agents, precursors, practices, abilities, and capabilities needed to assemble tough stock chains without accentuating upon methodologies to deal with the disturbances in essence (Ivanov et al. (2018)). As per Tukamuhabwa et al. (2017), these variables here and there, comprise systems to fabricate SC resilience and join ideas, for example, upgrading Supply network deftness, improving perceivability, upgrading adaptability, excess, and coordinated effort among accomplices. This audit empowers us to distinguish different SC resilience procedures that have been proposed in past studys, being characterized under two classifications including proactive technique and responsive system.

Proactive techniques are principally innovation driven methodologies that depend on creating specialized foundations, for example, computerized network and supply network robotization to keep away from future disturbances (Iakovou et al., 2014; Hofmann et al., 2019). Iakovou et al. (2014) featured limitation and regionalization of sourcing, while Zhu et al. (2020) discussed incorporated methodologies for Supply network hazard the board. Different creators have proposed social-related systems with social Supply network center (Ralston and Blackhurst, 2020) and human abilities (Tan et al., 2019).

Responsive procedures basically depend on a constant data framework, and depend on information driven dynamic, making virtual commercial centers (Zsidisin et al., 2005) and utilizing Supply network simulation (Graveline and Grémont, 2017). Furthermore, surviving existing research underscored other simultaneous methodologies (first and quick reactions during or in the moment result of a disturbance), like transportation and help support, inventories and hold limit, business congruity plans alongside dynamic vicinity (Hofmann et al., 2019). A couple of methodologies, for example, creating advanced abilities and supply network coordinated effort can be both proactive and receptive, contingent upon the time and reason for its utilization.

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In view of the judgement over, a reasonable system is proposed, to investigate versatile supply network techniques that incorporate assessment of the effect that COVID-19 has caused on the worldwide Supply chains, and dissect the short and long haul reaction procedures that have been received to deal with the dangers. This structure establishes the underlying study system for this study.

The assessment of the SC resilience of the chose ventures to COVID-19 prepares for a profound comprehension of the disturbance qualities, which is the initial phase in building SC resilience, as proposed by Hosseini et al. Invalid source determined. alongside Graveline and Grémont Invalid source determined. Also, the utilization of SC resilience hypothesis depends on proactive and responsive procedures, which center around when, why, and at which level in the supply network, a system ought to be sent. Significantly, the COVID-19 pandemic could keep going for quite a while, in this way, building SC resilience in both short and long haul is of mosextreme significance.

2.3. Resilience in cross border e-commerce business

The essential idea of online business is centered around the way toward purchasing and selling merchandise through the web. Cross border e-commerce business is characterized as "Cross line e-commerce business alludes to another kind of global business action, an exchange substance that has a place with various nations. It can bargain through an online business stage and utilize cross boundary coordinations to disperse products. (Hu and Luo, 2018: 394)"As depicted by Yu et al. (2016), the viable production network is a basic piece of an online business measure. Without providers, it is absurd to expect to keep up business connections among venders and purchasers. It is referenced that Supply network flexibility is important to keep up cross boundary elements of e-commerce business.

In business exercises, the worth chain's presence relies upon the staggered ware move, and the foundation of staggered esteem chain implies that purchasers really will pay greater expenses for items (Laric, 2004: 465-475). Customary global exchange, like the business to business (B2B) model between huge worldwide endeavors is by and large moved from homegrown makers to homegrown exporters before the merchandise enter the global market and afterward sold from homegrown exporters to unfamiliar merchants. Hu (2018) clarifies the study on the impact of this new plan of action on expanding transnational exchange accommodation. The development of cross border e-commerce business permits homegrown products to be sent

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straightforwardly to abroad customers through makers or exporters. This works on the exchange cycle and lessens the transportation cost and exchange cost of the undertaking by cutting the worth chain order of the whole business measure.

A few studies have clarified that the current four cross border e-commerce business situations in China, just as the working vulnerabilities under various situations and the resulting techniques embraced. These four unique situations give a decent hypothetical premise to the business systems of China's cross border e-commerce business (Giuffrida et al., 2019). Nonetheless, the improvement of cross border e-commerce business in China has its inalienable deformities, for example, the viability of hypothesis. The argument is that the business progression plan proposed (BCP) by Cerullo (2004), BCP contains an collection of hazard relief, hazard the board, coherence arranging and crisis reaction exercises (Azadegan, 2019). Azadegan (2019) puts an example affirms that carrying out or upholding business coherence programs (BCP) is a troublesome choice for business administrators; numerous organizations are hesitant to execute BCP on the grounds that interferences are moderately couple of occasions. Nonetheless, it isn't certain whether Chinese organizations occupied with cross border e-commerce business are as hesitant to execute the arrangement as 1000 Italian organizations met in this study. All in all, the interviewing subjects of this investigation were restricted to Italy, and China, as a quickly developing arising economy, may not be relevant to this hypothesis.

With the pattern of globalization, its symptom uncovered step by step. Harrison (2007) unveils that albeit the worldwide plan of action broadened the whole coordinations organization, it likewise brought delivery postponements and dangers of depending on distant orders. Lee and Whang (1997) point another characteristic symptom of the supply network is the bullwhip impact, the bullwhip effect that happens in an Supply network when orders submitted to providers have a more noteworthy inconstancy than those got from clients. This causes a contortion and enhancement of interest changeability climbing in the Supply network. Metters (1997) states quantitative study to discover the overall revenue of business exercises will diminish as the change of the Supply network increments. Zhao (2018) brings an economical green supply network structure to address the bullwhip impact. This investigation infers that a higher recuperation proportion and data sharing are the keys to diminishing the bullwhip impact, which requires better data correspondence between providers at all levels to lessen data unevenness. We can see the danger brought by the data unevenness is self-evident. These

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supply network surrenders proposed by researchers principally center around data unevenness, in any case, the momentum scholarly study actually has not settled how to assemble more straightforward data diverts practically speaking, particularly for little organizations like organizations occupied with cross border e-commerce business in China.

2.4 Supply Chain network Resilience for disturbance caused by the COVID-19 Crisis

The early study on the flexibility of the Supply network is just at the calculated level and there is just a part of supply network hazard research. Besides, it has been a long time since the study on the Supply network interruption of SARS in 2003, during which the interaction of globalization has taken an incredible jump forward. It is exact on the grounds that the interaction of globalization in 2003 isn't pretty much as exhaustive as that in 2020; and the investigation on SARS needs idealness. The 2011 Earthquake in Japan smaller affected worldwide Supply chains than the COVID-19 in the worldwide lockdown foundation. Consequently, it is vital for researchers to complete another study on Supply network flexibility for COVID-19 because of the incongruence of tests with pandemic study and the deficiency of adequacy of SARS research.

As Wang et al. (2019), the strength of supply chain can be characterized as the capacity to oppose the interruptions and change the operational ability to keep on conveying notwithstanding the disturbances. The supply network in China is perhaps the biggest supporter of providing the products and items needed for e-commerce business organizations around the world. The adaptability and possibility of the designs for the interruption because of any explanation like a pandemic, lack of laborers, or something else, the production network ought to be guaranteed the persistent activities of the e-commerce business locales without disappointment. In any case, lean administration strategies influence the strength of the business to offer ease choices while keeping up power over the supply network similar to China. Ivanov (2018), believed that the third-levels producers are fundamentally arranged in China, and any assents against the nation may bring about the deficiency of income for the organization and market cap. These influence the development and conveyance of the products to different pieces of the world, and the strength of the Supply network of the nation is exceptionally influenced.

The variables like stock control strategy or associations or the advancement of the foundation that eventually directs the capacity of the Supply network to convey consistently. Bevilacqua

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et al. (2018) argues that the supply network determining strategy empowers them to expect the flood or drop in the requests and be set up with stock control and the board. This is the place where the stock control arrangements additionally assume a significant part in loading the expected products from makers around China as outside variables, for example, characteristic disaster like floods would decrease the nation's assembling capacity, and the Supply of the merchandise would endure essentially. Then again, the foundation of the supply network and their availability with the real makers characterize the capacity to modify the pace of creation to create a manageable business system that can take into step the adjustments in the climate and proceed to convey and respect the responsibilities (Lahkani et al., 2020).

The constraint of past research did exclude clarifications to the connections between the development of the Supply network and required key activities under the COVID19 pandemic. This sort of inadvertent ignoring has forced a conspicuous hole in past research contemplates. Furthermore, the past specialists have not concentrated on the cross border works that can viably keep up maintainability in the Supply network for online business in China. Hence, this study plans to fill in the gaps in the investigation of production network hazard in cross border e-commerce business and spotlights on the difficulties looked by tough production network the managers in the time of COVID-19 pandemic.

In view of the above conversation, it tends to be referenced that relief of the supply network issues is important to help the development of e-commerce business in China. Many studies argue that under the COVID-19 pandemic circumstance, the administrations of the concerned nation should show legitimate drive to improve the economy development of the nation through upgrading the Resilience of the production network in China (Galbadage et al., 2020). A few specialists and researchers have taken in certain attempts. Sarkis (2020) proposed a phenomenal Pragmatic Action example of business collaboration to manage COVID-19 as the impact of COVID-19 is still unknowable and questionable. The Pragmatic Action necessitated that the production network be more dexterous and quicker react to clinical Supply unavailable, like The Economic Times (2020) reports L'Oréal in Europe changed to assembling hand sanitizers. Zhu (2020) brings up that the absence of supply network straightforwardness bringing about Hindered Decision Making and Unsustainable Just-In-Time Manufacturing prompts a delicate worldwide production network. Ivanov (2020) likewise expresses the significance of nationalization and expansion of the clinical production network. Zhu (2020) has anticipated how the pandemic impacts worldwide stock chains utilizing a recreation

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technique. The outcomes show when the pandemic flare-up in China, the U.S., and Europe all the while, the most negative effect on the supply chain execution is seen in the cases with the long office and request interruption terms downstream the supply chain paying little mind to the disturbance time frame in the upstream part.

2.5 Research Gap

Firstly, there is no study dealt with cross-border e-commerce perspectives to understand how supply chain interruptions like COVID-19 affected this industry. Based on the discussion above, some quantitative models have been proposed but not suit such a global issue. Also, qualitative analysis studies (including interviews and case studies) have summarized the bottlenecks of supply chain resilience development and the current situation of cross-border e-commerce development. Nevertheless, in these studies, we can summarize the following main problems that the above literature does not involve.

Most quantitative research models only stay in specific scenarios, and most models are established in large companies (completed supply chain or large supply chain scale). The model's complexity is only applicable to developed countries with well-developed supply chains but not to developing countries. Case studies only consider the disruption of supply chains caused by a single event, while COVID-19 does not apply to China-centered cross-border E-commerce in China. However, the supply chain resilience analysis of pandemics is even more obviously inadequate. SARS virus and H1N1 only affect supply chains in local countries, and 2020 has passed a long time, so the timeliness is too low. The impact of COVID-19 on human society is huge, and global trade has been severely hit. However, there is currently no article to study the supply chain of small international trade companies represented by cross-border e-commerce.

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3. Methodology

3.1 Research questions

In view of the survey of existing research, the study recognized some study gaps.Based on these research gaps, the following research questions are proposed：

1. What are the factors that affect the supply chain resilience of China's cross-border e-commerce of small companies during the COVID-19 pandemic?

2. What measures have operational managers of small companies who sale commodity products taken to minimize the loss of supply chain from the supply chain

performance perspective during the COVID-19 pandemic?

3. How do small companies engage in cross-border e-commerce to improve the resilience of their supply chains?

3.2 Research technique: executing a qualitative interviewing

According to Silverman (2015), when researcher want to address the research issues which have limited experience then researcher should select the qualitative methods. Thus, to investigate and address above mentioned research questions, the study will concentrate on a qualitative method. Also, Saunders et al. (2016) show an study reasoning is utilized in this investigation, as its various viewpoints are mainstream and suitable in dissecting various issues and complex circumstances around this study. In view of the existing research survey, different researchers, like Ivanov (2020), endeavors to outline the activity of related questions by methods for model simulation. In any case, the effect on cross border online business in China during the pandemic and the answers for manage it, as subjective questions, can't be concentrated essentially through quantitative study worldview. As a result, subjective study, particularly interviews, will be picked to profoundly explore into the study questions. The accompanying table clarifies the qualities and limits of both subjective and quantitative study strategies (Almedia et al., 2017)

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Differences between quantitative and qualitative research methodologies

Table 1, Source: Almedia et al. (2017)

In spite of subjective study strategies has its constraints, this is suitable strategy for this study since the attention on understanding the setting of the issue requires further agreement which can't accomplished through the quantitative study techniques (Almedia et al., 2017).

Saunders (2012) accepts that interviews, particularly the semi-organized interviews appear to be an appropriate method to investigate the study questions. In addition, interviews can likewise be utilized to acquire top to bottom thoughts where the scientist have not yet completely figured an study question and targets. In light of the genuine circumstance of this study, the information collection will be led as online interviewing because of the novel Coronavirus attacks.

3.3 Case choice and examining strategy

As per Paradis et al. (2016), the precise decision of information collection strategy is expected to accomplish the study destinations. Since the reason for this study is to investigate the effect of cross border e-commerce business supply network resilience during the COVID-19 pandemic, the creator met a few significant professionals from a few organizations occupied with cross border e-commerce business industry in terrain China. The justification this inspecting is that applicable professionals occupied with cross border e-commerce business, as staff is straightforwardly associated with big business activity, they have a superior comprehension of the whole activity interaction of the organization.

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To investigate and address these 3 research questions referenced in last part, the study will concentrate on a few significant specialists of cross border e-commerce business industry in China. In China, there are a great many related laborers in cross border e-commerce business, yet as subjective study, it is unreasonable to talk with every one of them, because of the time restriction of this study, there was no achievable method to arrive at each venture. In any case, we can in any case get important data from interviews with few individuals via cautious determination. The standards for choosing respondents is summed up as follows:

a) Working in a cross-border e-commerce company that the main business scope is commodity in China.

b) Participated in the full-time work from January 2020 to November 2020.

c) Theirs expected set of responsibilities ought to be production network organizer, business activities, inventory managers, and operational managers

As per Saunders (2012) 's considers, the snowball inspecting strategy is the ideal arrangement when the study object needs testing, which addresses the particular populace. The author will initially interview the companions of two creators occupied with cross border online business, and afterward receive the snowball testing strategy as the non-likelihood inspecting technique to get to additional respondents. In addition, As per Saunders (2012)’s considers, the number of interviews for a semi-structured interview based on qualitative research should be 5-10. According to the research content of this thesis, the author selects the interview subjects through snowball sampling until the content expressed by the respondents begins to be homogenous. At this time, the number of the interview subjects is exactly 8.

The research intended to inspire respondents' perspectives and musings about the effect of the COVID-19 pandemic on the Resilience of China's production network. These inquiries would be designed cautiously to serve the goals of this study. Every respondent ought to be looked over changed organizations or works various situations with limited inclination. Ritchie and Lewis (2003) likewise demonstrate that interviewing gives a little scopes study and may just give what respondents plan to think about their view of wonders and exercises.

Statista (2020b) shows that Chinese cross border e-commerce business organizations are growing quickly in some enormous urban areas in China like Shenzhen, Guangzhou and Hangzhou, and their advancement adjusts to the law of mechanical group impact. Zhang (2019) focuses in China, the Pearl River Delta district (Guangzhou, Shenzhen, Hongkong Urban

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agglomeration) has set up a functioning cross border e-commerce business market, and the entire cross border online business industry is more serious, with solid economies of scale. In this way, to make the entire study really persuading and run of the mill, the creator purposely chose cross border e-commerce business undertakings situated in the Pearl River Delta area as the primary study objects. There is no grouping of cross border e-commerce business organizations as indicated by the items offered by these organizations, and the kind of items offered isn't considered as a factor of if to welcome to interview. The explanation is to see if the items an organization sells are a major factor in the flexibility of its Supply network.

Based on the above research methods illustration, the author found 8 practitioners who were willing to be interviewed. The following is the relevant information of the interviewees.

Table 2: Employment information of respondents

Gender Company size (in people)

Position Seniority Main business area of the company

Import/Ex port

City

Respondent 1 Female 30~40 Operation specialist 3 years Hairdressing appliance

Export Guangzhou

Respondent 2 Male 1200 Purchase specialist 2 years Beauty makeup Import Hangzhou Respondent 3 Male 15 Logistic manager 9 years Logistics agent

of Clothing

Export Guangzhou

Respondent 4 Female More than 130

Operation specialist 2 years Clothing Export Shenzhen

Respondent 5 Female Around 200 Chief executive officer

4 years Fashion related Toys

Export Shenzhen

Respondent 6 Male Around 100 Market specialist

2 years Household products and Clothing

Export Shenzhen

Respondent 7 Male Around100 Purchase specialist 5 years Beauty Makeup Export Shenzhen Respondent 8 Male 40 Operation manager 3 years Cosmetics and

wine

Import Hongkong/Guang zhou

3.4 Data collection and investigation

White and Rayner (2000) think the interviewing characterized as the most famous and viable apparatus of subjective information collection strategy to get the direct data for the study

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questions. As the COVID-19 pandemic keeps on seething around the planet, all interviews will be interviewed online by video or voice. The gathering materials (in Chinese) will be audio- -recorded in words however converted into English and appeared in Appendix section appended to this thesis. At long last, the English variant of the interviewing records will be translated through the NVIVO 12 programming, and hubs will be set up to encode and arrange the inquiries for simpler study. NVIVO 12 is very simple to download and investigate the information with substitute programming. Besides, it has straightforward method which save the specialist time to dissect.

In order to answer the three research questions set in this thesis, 14 sub-questions are designed for respondents to answer. These 14 sub-questions for the interviewees are all carried out around three research questions, and the specific content of the sub-questions can be found in the appendix of this thesis. At long last, the creators will pose some open-finished inquiries like: How can you, as an organization administrator, improve production network flexibility during a pandemic? The particular inquiries questions are partitioned into 14 little inquiries. Nonetheless, during the interviewing, various organizations have distinctive working foundations, for instance, the organization's primary business is extraordinary, working stage is unique. What's more, the author will make some small changes as per distinctive organization foundations, making the entire semi-organized interviewing more adaptable and versatile.

In any case, Hammersley and Gomm (2008) bring up that these inquiries questions and the responses to these inquiries are probably going to change over the long run, which may likewise prompt the nature of the appropriate responses being not exactly anticipated. Consequently, the organization's business reports and other applicable archives in the past period can be chosen as advantageous information to expand the honesty and dependability of the entire investigation.

3.5 Research assessment and Ethical issues

A wide range of ethical issues arise when conducting the research. Particularly when dealing with the qualitative research since there is much human involvement in the research (for example in-depth interviews with participants) whereas quantitative research has limited ethical issues comparatively (Saunders et al., 2009). As per Saunders (2012) hypothesis, the

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two essential standards for assessing logical request are dependability and legitimacy. For semi-organized interviewing, this study is bound to be utilized to investigate and clarify and give bits of knowledge that can be utilized to create hypothesis, rather than giving measurable speculations. Furthermore, semi-organized interviewing may likewise hinder the results due to predisposition and social contrasts. Hence, to keep an undeniable degree of validity and adaptability for this study, the length of each interviews ought to be kept to 45 minutes to an hour overall.

White and Rayner (2014) likewise feature the impediment of semi-organized interviewing, this sort of study strategy depends on a solitary case clarification and will in general be emotional, an issue might be caused by the trouble to sum up the end. For instance, even with the inquiry "How might SEMs improve supply network Resilience? ", applicable experts are probably going to take a vague and abstract point of view and overlook the general exhibition of the organization because of the impediments of their positions. This may cause the predisposition influencing the last outcome.

It is essential to take note of that albeit this study considers the cross border e-commerce business organization, the entire business interaction of partners associated with the world, however fundamentally gathered in China, because of the extraordinary financial condition in China (not totally unrestricted economy, the communist economy) somewhat by full scale limitations. These large scale factors remember communist philosophy for China, the effect of macroeconomic anticipating China's future turn of events, so at the hour of this study, need further clarifications.

It is imperative to ensure respondents' very own data. Creswell (2008) features some significant guidelines for analysts to follow. For instance, the full names and the name won't be revealed to ensure their personal information protection. All respondents will be informed carefully before the interviewing that the interviewing will be audio-recorded. Moreover, all data won't be unveiled to the outsider and that all data might be utilized for research purposes and won't be utilized for some other purpose. Likewise, the scientist will guarantee that respondents are not given monetary motivating forces to take part in interviews.

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3.6 Data classification

After the information collection measure, this thesis will endeavor to apply the topical investigation, Braun and Clarke (2006:77-101) allude to topical study as a 'essential technique for subjective investigation', and it offers a deliberate yet adaptable and open way to deal with break down subjective information. In the wake of interpreting the interviewing content, the data of this research will encode the key highlights and topics of the framework. As per the three research questions raised over, the author prepared 14 sub-questions and created a coding tree, the particular sub-questions topics can be reintegrat as figure 5 shows. The reason for the classification was to make it more convenient for the readers to inquire in NVIVO.All the data is encoded by axial coding method to identify information related to the topic, then the similarities between these topics are grouped into the same topic, and the related topics are grouped into the same group, and the information provided by the interviewees is combined into a complete narrative.

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4. Findings

The purpose of this chapter is to present the results obtained from the qualitative research methods, with semi-structured interviews. Altogether, eight interviews have been conducted with the operational managers of different cross-border e-commerce companies. The qualitative data that has been collected from the interviews has been analysed through the thematic analysis(refers to the last chapter), which means that the researcher has abstracted the themes from the raw data in order to make better analysis. These themes were identified based on the keywords that participants used in their answers. After gain enough information from 8 respondents, the analysis of the time line with how China's cross-border e-commerce been effected is shown in the figure below. The time nodes shown in the figure can facilitate readers' understanding of the subsequent content.

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4.1 Factors that affect supply chain resilience

The section focuses on answering the first research question. From the end of January 2020 to date, all respondents point out that their companies have been affected by the supply chain to a large extent. The effects can be noticed obviously.

The first finding is that upstream suppliers faced significant challenges due to series of lockdowns and their production levels reached to zero level. Aghina et al.(2020) also explains that the upstream supplier did not carry out production due to the forced shutdown required by the Chinese government at the end of January, so it was unable to meet the production demand of dealers (respondents engaged in cross-border e-commerce business). Secondly, there is a sudden change in customer demand during March and April due to some of the preceding customer requirements are no longer needed due to the overseas pandemic broke out. If the company dealing in non-necessities of life loses a large part of orders, the previous customer demand forecast is out of balance. Thirdly, as goods need to be shipped from China to other countries, but the reduction of flights caused by the epidemic and the reduction of shipping efficiency, logistics obstruction has become the most intractable problem faced by the whole cross-border e-commerce enterprises. All respondents reported unprecedented challenges in shipping. As for the challenges of logistics, the author interviewed the downstream logistics agents of the respondent 1, and the details of the interview will be shown in the next section.

4.1.1 The Supply Side Issues due to Series of lockdowns in China

From the end of January to the beginning of February, which was the traditional Festival of China, the Chinese government decided to temporarily extend the Spring Festival National holiday period after considering the actual epidemic situation, and the original working day was also temporarily changed. In addition, many Chinese factories and companies have internally decided to postpone the resumption of work, resulting in unprecedented chaos in China's labor market during the Period of February and March 2020.

Almost all of the respondents said:

“some of our domestic manufacturers cannot supply us with new sources of goods in time because the factories cannot start working in time, and then we will be out of stock for a short period of time.”

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However, some respondents said that whether business was affected in February was mainly due to the close relationship between business and Chinese factories:

“Our main area of operations is Hong Kong. At that time, our warehouse and logistics were in a relatively stable state. The domestic part is relatively stable, mainly because there are problems with the foreign logistics.”

It's worth noting the impact of February's Chinese shutdown on companies' supply chains really came in March because of the large fluctuations in demand across the supply chain. Respondent 1 said:

“The Chinese factory just resumed work, its efficiency is relatively low, so it will lead to a situation similar to short supply. Then many factories were unable to accept orders. As a result, one of our delivery cycles would be ordered by the factory. At that time, one of our delivery cycles would be extended for a long time.”

Respondent 5, the CEO of a fashion related toy factory, lamented that his factory didn't return to normal work until August 2020, he said:

“There will still be inquiries from overseas customers, but the quantity is reduced, and the international shipping was inconvenient. I needed to ship according to the arrangement of the freight forwarder.”

Respondent 1 gave a more accurate figure to reflect the receipts for march to May, she said:

“At the end of February, our line performance actually dropped by more than half, or even 50per cent or 60per cent compared with last year. In February and then in March, it was about 50 or 60, which is the compare with last year. In April, our main products are indeed the turnover did indeed drop by more than 50per cent~60per cent, and it was similar until April and May. It was much worse in May. The data in May should have dropped by 80per cent or even 90per cent, which was a lot lower than last year.”

The reduction of demand in the lower reaches of the supply chain also has a qualitative impact on the upper reaches of the supply chain. It is necessary for cross-border e-commerce companies to rethink their business dealings with upstream suppliers. Respondent 7 said:

“A certain product may not reach the MOQ (minimum order quantity). The MOQ requirement of a factory cannot be met.”

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4.1.2 Disruption in the Logistics the lockdown around the world

The supply chain shock since March 2020 can also be reflected from the logistics perspective. Some of the interviewers even said that the disruption to logistics was the biggest reason for disruption of supply chains during the epidemic. The Respondent 1 said:

“The main impact for my company is the delivery time may become longer. That time may be extended to more than 10 days before sending to the United States from China, it may take up to three months to go to other countries during the pandemic.”

The extended delivery time caused the dissatisfaction of customers, and some customers' orders were even cancelled. Respondent 3, the respondent 1's freight forwarder, said:

“I have an American customer who ordered masks in China. At that time, the time limit for several batches of goods was delayed, which made the supermarket on his side very angry because the delivery deadline was exceeded. The consequence was his contract was breached, and the order there was also cancelled, which was a big loss for my company”

The number of flights and sea shipments due to the worldwide blockade is much lower than it was in 2019, which has affected international logistics as well. On the one hand, this effect is reflected in the longer period of flight shipping and sea transportations arrangements. The respondent 1 said：

“That time may be extended to more than 10 days before sending to the United States, it may take up to three months to go to other countries during the pandemic.”

The other is the significant increase in transportation costs, respondent 1 complains:

"In fact, logistics costs are really 50-100 % higher than last year."

This impact is not only experienced by exporting companies, but also by those engaged in cross-border e-commerce import. Respondent 2 said:

“The international epidemic causes your supply to be unstable, and the price for your supply will become higher.”

However, due to unstable supply chain and extended delivery time, customer satisfaction is also affected to some extent. The complaint is compounded by the fact that customers are

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unsatisfied with companies was raising prices in order to retain profits, and by the fact that delivery time has been extended and customers have chosen to cancel orders. Respondent 8 said:

“Customers will complain to you that your price has no comparative advantage now.”

A logistic agent respondent 3 shared his experience in April:

“I told the customer that the goods could arrive in six or seven days, but they waited for half a month, it made customers very angry. He had breached and canceled the contract, and then we even lost a little money because of the delay.”

4.1.3 A slowly recovery due to poor supply chain strategies

Since June 2020, the global epidemic has enjoyed a brief respite at the onset of summer, thanks to the global lockdown that followed the ‘first wave’ of the epidemic. The easing of the epidemic has also eased the blockade, which has made the economy recover partly. However, all of the respondents said that such a remission did not lead to a complete recovery of their business. The reason is that the relative ease of the remission has not led to an increase in international flights, shipping costs have been high for months. Respondent 1 said:

“The cost is increasing, and the profit margin is decreasing.”

The COVID-19 abatement did not last. Between September and November 2020, many parts of the world experienced a "second wave" of outbreaks, with Europe and North America being the worst affected. As for the impact of the second wave, most of respondents said it was not that severe to them. However, the second wave of impact is influential, mainly reflected in the further tightening of the demand side, which makes the overall order volume and profit of the company in decline. Respondent 8 said:

“There will still be two kinds of impact. One is that logistics will continue to be affected, it may be more dramatic than before. The other is the impact of supply out of stock. Many of our orders may be out of stock. If the supply is insufficient, it will not be able to interview the needs of customers.”

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Respondent 5 says his company will not be affected by the second shock because it has already moved its customers to China to face continued unpredictable risks in the future.

4.2 How they minimized the loss?

In this chapter, I will mainly answer the second research question, and introduce the practical measures taken by each respondent’s company in detail.

4.2.1 Usage of overseas warehouses

A crucial factor affecting the supply chain of cross-border e-commerce overseas warehouses. Cross-border e-commerce companies can pre-ship their products to these offshore warehouses like the Amazon overseas warehouses on a large scale. These warehouses are like ‘buffers’ in the supply chain, after customers in North America and Europe place orders with Amazon, products are shipped directly to customers from Amazon's warehouses in North America or Europe, rather than from China. As stated by the respondent 1:

“We used warehouses provided by Amazon in the local country. And then we can deliver them in maturity. After the goods are shipped from China, Amazon staff will conduct some localized management according to different local conditions, which is more convenient for cross-border e-commerce companies in China.”

For companies that did not use overseas warehouses, the impact of the supply chain in the pandemic is even greater, because all orders must be individually packed in China and shipped internationally, while without overseas inventory it is not feasible to cope with surging demand. Respondent 7 said:

“The cycle will become very prolonged. Each factory will carry out a waiting list. If you do not have a foresight after the list, the only thing you could do is waiting.”

4.2.2 Strategies to deal with the PPE (Personal Protective Equipment) demand

A very interesting phenomenon occurred in the Pearl River Delta region, where 4 out of 5 respondents engaged in cross-border e-commerce of SMEs said that they had sold medical masks and PPE for a short time between the end of February and the beginning of May in 2020. The respondent 1, who is engaged in purchasing, said:

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“At that time, we chose to sell some PPE to deal with it. It was because our main product was not daily necessities, so our supplier developed a new type of mask and forehead thermometer to sell.”

Respondent 7 gave the percentage of total sales of medical masks in April:

“As for mask sales, it seemed to be 30-40% of all sales at that time.”

The respondent 1 further explained the reason why they had such a special strategy:

“Many of our suppliers in China also started to sell raw materials for producing PPE, including factories we have cooperated with before. They also started to buy mask machines to produce masks, so at that time the general environment has changed in this way.”

This shows that SMEs responded very quickly during the epidemic. In a very short time with the upstream suppliers and downstream logistics agents reached a mutual commercial assistance. They said that because the Pearl River Delta region is where China's production of medical masks is concentrated, a large number of factories that are qualified for the production of masks happen to produce masks at the same time.

4.2.3 Diverse products

In the last section, we concluded that some specific products would cause a sharp drop in demand due to the COVID-19 outbreak. Some respondents said that the best solution would be to diversify the supply chain fluctuations caused by selling a single product by selling a wider variety of products. Respondent 6 explained a change in her company's strategy for selling a variety of products this year:

“Because if the product provision is single, the supplier will be relatively single. Therefore, our company’s policy this year is to create more categories as much as possible and try to choose a variety of different products.”

4.2.4 The change of target market

When overseas markets are hindered by reduced orders or extended delivery time, some respondents say they will shift their target markets to China for local sales. They are trying to expand their local market and shift their target market in response to the “dual circulation

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economy policy" proposed by the Chinese government. As for this strategy, Respondent 5 gave the following explanation:

“We try to sell products at a price lower than the market price in the local market, also look for suppliers with lower prices. The company regained its strength, and then plans to develop in both directions in domestic and abroad.”

Respondent 4 gave a similar explanation. Her company's main business will run on multiple platforms, including Amazon, eBay and Taobao in China.

4.2.5 Targeting multiple suppliers

When demand surges, companies often choose multiple suppliers to produce or purchase at the same time, to reduce shortages or late deliveries caused by a single supplier. Respondent 2 illustrated his business case:

“When I realized that Japan suppliers are more difficult to interview the purchase demand, I will shift to Europe supplier.”

4.3 How to improve supply chain resilience?

This section answers the third research question. In order to answer this question, the author asked an open-ended question during the interview, allowing all respondents to speak freely as much as possible.

4.3.1 Improve the ability to identify risks

As for the eight respondents, only one who works for Alibaba, a large company, said they identified supply chain risk when the World Health Organization defined this disaster as "pandemic" in late January. Most of the respondents said they experienced the impact on their businesses only during the lockdown in China in February, and some said they did not expect the virus to have exerted such an impact in the world. Respondent 5 expressed regret for his company's misjudgment before the epidemic. He said:

“The best solution to this kind of supply chain shock is to set up a special departmental strategic headquarters to analyze and make plans and countermeasures by specialized personnel. We should try to arrange interviews to provide an analysis and judgment on the trend of your products in the future.”

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Other respondents said that in the black swan background of 2020, the global environment is changing rapidly and full of unpredictable things. Therefore, constant attention to the news and the global situation is necessary to make timely adjustments. In particular, respondent 6 highlighted the importance of timely risk prediction and quick decision making in improving supply chain resilience. She said:

“Predicting risks and making agile judgments are the most important.”

4.3.2 Reconfiguration of logistics system

Based on the interview transcript, all the enterprises that use overseas warehouses, especially Amazon FBA warehouses, are less impacted by the supply chain than those that ship goods directly from China. Respondent 2, who works for a company as big as Alibaba, emphasizes the need to build a bigger logistics network to improve the resilience of supply chains:

“The distribution of the dimensions of our supply chain in different international channels is what actually we have done the layout in the early days.”

For companies that do not use overseas warehouses but deliver goods to overseas markets, some respondents indicated that they would consider upgrading their logistics systems in the future, that is, using Amazon FBA warehouses or Alibaba overseas warehouses as "buffers" for logistics transit. Respondent 3, who works for a freight forwarder company, has a more detailed view of the logistics industry:

“We will study more about how to deliver the goods all over the world, and then how to arrange these accordingly, including import and export, how to declare these are all to be studied.”

4.3.3 Establish internal supply chain evaluation system

As for the eight respondents, only three said they had an internal way to evaluate the supply chain system. The companies in which these three respondents worked for were generally larger than those in which the others worked for. Respondents who worked in SMEs said that their companies were too small to establish an internal supply chain management system. But some respondents said that the outbreak of COVID-19 had hit their companies hard and forced them to learn a hard lesson. Respondent 8 gave details of the move, saying that in the future there would be a "hierarchy" of products and suppliers within the company.

“According to the needs of customers and the tightness of the market, we will categorize our suppliers as A, B, C and D.”

How does the global outbreak of COVID-19 impact upon cross- border e-commerce supply chain resilience? A qualitative research based in China