30 Apr 2015
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Five hundred years ago, the maritime Silk Road—or the spice routes, because of the most popular commodity being traded—flowed across Japan, Indonesia, the Middle East, and Europe.


Five hundred years ago, the maritime Silk Road—or the spice routes, because of the most popular commodity being traded—flowed across Japan, Indonesia, the Middle East, and Europe. But the most important aspect of the exchange was not the trade in products but in knowledge, the exchange in religion, expertise, and skills, as well as market understanding.

According to Mr Sassoon Grigorian, Director of Public Policy, Asia Pacific, eBay Inc., a new type of spice route has emerged in the form of global trade flows in today’s digital age,. Today, boundaries are of less importance due to the reliance on internet-connected devices and free flow of cross-border data. This has facilitated the emergence of micro-multi-nationals, which constitute small businesses that export globally. For instance, eBay commercial exporters can have access to an average of 63 markets and countries, due to reductions of barriers to entry in international commerce.

Today’s trade environment signals immense opportunities in e-commerce for the Asia-Pacific. Half of the world’s internet users are located in the region. There are a significant number of growing economies and it has seven of the ten largest cities in the world.

The new climate means businesses no longer require a brick-and-mortar store in order to sell products because they can tap into online markets. Moreover, services such as drop shipping have removed the need for warehouses; neither is there need for upfront costs. However, in order to thrive in today’s trade environment, it is necessary to be able to identify gaps in the market and leverage logistics effectively.

International trade in goods in comparison to trade in services, communication or financial flows, is the most significant type of trade flows and has assumed a very complex nature. For instance, the hardware for the iPhone 4’s 178 components is manufactured in different parts of the world whilst product design, software and services are concentrated in the United States.

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Mr Sassoon Grigorian (L), Director of Public Policy, Asia Pacific, eBay Inc. and Dr Ashish Lall (R), Associate Professor, the LKY School.

Currently, in world trade, the heaviest bilateral trade is to and from the US, to and from Europe and to and from China. It is however projected that in 15 years, this will change with 25 of the top bilateral trade flows being with China. Several opportunities thus emerge. It is expected that trade within the Asia Pacific will be more robust. For instance, it is forecasted that a significant trade relationship will emerge between China and Germany given that it is the centre of Europe in terms of trade flows; as well as significant trade opportunities between emerging Asian economies and Latin America; and China and Africa. Further, countries with larger global relationships and increments in global flows are projected to experience a 40% increase in their GDPs. Therefore, the cost of lack of connectivity is rising.

Today’s trade environment signals immense opportunities in e-commerce for the Asia-Pacific. Half of the world’s internet users are located in the region. There are a significant number of growing economies and it has seven of the ten largest cities in the world. The rise of Asian internet giants such as Ali Baba with regard to market capitalisation and the ascension of Asian internet-based firms, such as Baidoo and Tencent into the top ten are major breakthroughs. Despite the low average in e-commerce among ASEAN nations, the increase in intra-ASEAN trade on platforms such as eBay signals a small but rapidly growing base, which is an additional opportunity for the region. Thus with the right policies, the Asia- Pacific has various opportunities it can leverage within the new spice routes. ASEAN and China in particular are expected to be centre stage.


On 9 April 2015, Mr Sassoon Grigorian, Director of Public Policy, Asia Pacific, eBay Inc., gave a talk on “Global Trade Flows in the Digital Age: The New Spice Routes”. For upcoming events at the LKY School, please visit our website.

Awa Tourey is a MPP Student at the LKY School. Her email is decb64_YTAxMjI4MzRAdS5udXMuZWR1_decb64

Inc., gave a talk on Global Trade Flows in the Digital Age: The New Spice Routes. For upcoming events at the LKY School, please visit our website.Awa Tourey is a MPP Student at the LKY School. Her email is decb64_YTAxMjI4MzRAdS5udXMuZWR1_decb64
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