Southeast Asia foreign trade pitfalls: trusting 'big shots,' paying first and waiting for goods, the

Recently, a friend of ours who has been living in Southeast Asia has caught our attention with his complaints in the industry group. In the WeChat chat records he posted, we saw that despite his various creative debt collection attempts, the other party had all sorts of excuses to stall.

What exactly happened? To find out, we contacted this Southeast Asian e-cigarette trader, who wished to remain anonymous, and he shared a story about blindly trusting so-called 'industry big shots,' making payments for orders, and ultimately not receiving the goods, even having to seek help from a debt collection agency to slowly recover his funds. (We will refer to this trader as Brother Li.)

The incident began in early February this year when Brother Li received an order from a major client in Dubai for a domestic brand. Due to the client's request for delivery within 7 days, Brother Li searched everywhere to see if there was stock available for quick procurement. Brother Li stated, 'Usually, it takes nearly 20 days for me to air freight orders to my warehouse in Malaysia, but this time the client was indeed in a hurry.'

'This S happened to be dining together and said she had stock. At that time, I didn't know much about S, only that she was somewhat well-known locally in Malaysia, and it seemed everyone in the e-cigarette foreign trade knew her. I thought a few tens of thousands of RMB wasn't too much, so I decided to give it a try.' With this thought, Brother Li immediately arranged for the finance department to transfer over 30,000 Malaysian Ringgit to S.

However, Brother Li's enthusiasm was quickly dampened. Despite having prepaid tens of thousands of Ringgit, S repeatedly delayed the delivery date. 'Her excuses were bizarre; sometimes she said the goods would arrive tomorrow, sometimes next week, and then she said the order was going through processes, and it slowly dragged on until nearly July, and I just couldn't hold on anymore,' Brother Li complained to us.

'Since I knew people from that domestic brand, I went to inquire. In reality, she hadn't placed the order at all. When I pressed her the hardest, she finally sent the order over, but she didn't make the payment, and I realized she was deceiving me. I later sought a debt collection agency to recover the funds, and she was probably afraid of the impact, so she slowly paid back 10,000 at a time; she still owes me 10,000.'

Since she is a well-known local player, doesn't she worry about her industry reputation being affected? Faced with this question, Brother Li seemed quite helpless. He stated, 'Her so-called fame was actually from the past; now she is a name that has been blacklisted in the Malaysian e-cigarette circle. Later, many people contacted me, saying that to recover the money she owed, they had to guard the stall to get it back, and some even had debts that dragged on for over a year.'

'The root cause may be that she tried to build her so-called brand but failed, or she owed a lot of debts and thought I had some cash to fill other holes. In fact, many in foreign trade may have heard her name but don't know her well, thinking she is still a big shot, but in reality, she has long lost everything and can be said to be nothing now,' Brother Li summarized.

At this point, Brother Li further discussed the significant impact of 'information asymmetry' in e-cigarette foreign trade. It can lead to situations like the one mentioned above, where one risks losing both money and goods, and even waste a lot of human and material resources.

'Some companies send a salesperson over, who might stay for a week or ten days, and then the salesperson comes back to me looking pitiful, saying the company has been waiting for half a month, and the boss is urging whether any orders have been secured.' Brother Li feels very regretful; he believes many companies have unrealistic expectations about foreign trade.

Brother Li emphasized that unlike five years ago, the current market environment has changed significantly. 'It's not the same era anymore; if you say five years ago, you could go out for a round and indeed bring back some orders, but that situation is no longer possible now.'

'As a Chinese person, I understand e-cigarettes well; I have all the industry resources, and I need to be stationed here long-term. The big shots you visit, I often dine and communicate with them; if you come over for just a week, thinking you can secure orders from them, isn't that an insult to me?' Brother Li humorously used his own experiences to illustrate.

Putting aside the jokes, Brother Li further explained, 'Those big companies basically have entire teams stationed here, running around long-term, assisting distributors and merchants in activities, providing various services, and their orders are definitely stable.'

'A new brand hiring a few foreign trade salespeople, relying on business trips around the world to bring back orders is like winning the lottery. Unless the product is very distinctive and has advantages that can attract the local market, this logic only holds true. But currently, the vast majority of products are very homogeneous and lack novelty, so what is your advantage?' Brother Li pointed out the difficulties faced by foreign trade salespeople.

Above is the first article in the foreign trade pitfalls series by Ge Wu, where Brother Li shared a case of nearly losing both money and goods due to trusting a 'famous person' in overseas trade, along with some of his observations on conducting foreign trade.