What Stabilization in China Trade Activity Could Mean for the Rest of the World

As China’s restrictions are lifted, suppliers patiently wait for the West to catch up

We reported a month ago that early indications showed China’s economy was coming back online. Based on our data, trade activity between Chinese suppliers and their customers began normalizing toward the beginning of March after a period of decline that began in February. As several Chinese factories came back online, we saw a brief period of 7 days where trade activity actually outpaced 2019 by 30 percent. However, we speculated the uptick in China’s trade activity could be short-lived as more countries locked down and demand decreased.

These observations were captured for suppliers across 20 territories in China and in many industries serving Western customers. As a reminder, the data captured on PrimeRevenue’s supply chain finance platform shows invoice value and is an indicator of trade transactions – if the overall value of invoices is growing, trade between buyers and suppliers is growing. Similarly, if volume is down, trade is down.

China Invoice Values Reflect Volatility in Demand from the West

Since our initial report, we collected an additional month of data. Outlined in the chart below, this new data provides a glimpse into how the global spread of COVID-19 has affected demand for Chinese goods and services.

The last 30 days have been extremely volatile, likely the result of the action and reaction unfolding across the globe as different regions are impacted by the global health crisis. Hard goods manufacturing, some retail and automotive sectors have been hit hardest. As Europe and the U.S. continue to experience varying degrees of lockdown, whether it be in store closings, factory shutdowns or reducing hours of operation, customers in these regions are producing less and placing fewer orders, resulting in lower invoice value.

Meanwhile, we are seeing major increases in invoice value for packaged food and some consumer goods as demand from the West and Australia increases in those areas. In fact, one packaged food customer on our platform has seen a 180% increase year-over year. Admittedly, our customer base has very few producers of medical equipment or Personal Protective Equipment (PPE) in China, which would lead to significantly higher volumes due to the current surge in demand.

This last month of data shows our predictions were accurate: reduced demand and global shutdowns have led to more volatility and lower trade activity compared to 2019. But there is some good news! The slumps have been relatively short-lived, compared to many early speculations on timeline, including our own. While volumes are down from the beginning of the year, they have consistently moved above the anemic lows we witnessed in early February.

This may be one indication that the global economy may bounce back quicker than some projections have anticipated, but this should be validated with global data and we would love to collaborate with you if you have large data sets like this. Demand for the goods and services the invoices on our platform represent is largely based out of Europe and North America – the regions still trying to flatten the curve and restart business. If volumes keep stabilizing, it would indicate a trend toward overall supply chain and economic stabilization and then, ultimately improvements with a hopeful turn to recovery.

We’re also seeing a sharp uptick – 300 % – in the number of suppliers in China joining our supply chain finance platform this year. This is indicative of two points. First, companies want to mitigate the financial risk in their supply chains with supply chain finance. Second, suppliers have a higher demand for cash during these uncertain times and are accelerating through the onboarding process at faster rates than expected. This is particularly dramatic in Europe and can be an indicator for what the US, which is several weeks behind in the pandemic, will see down the line. We will explore this topic more in a future post.

Looking Forward

Our analysis of supply chain finance trade activity offers an early look into economic activity and can help companies make decisions at a time when there’s little valid, accurate and available data to rely on. We will continue to monitor the data in China and elsewhere as countries reopen for business and share those insights with you.

Two more studies my colleagues and I are looking forward to sharing with the market in the coming weeks will cover industry-specific trends and supplier demand for cash flow.

Follow PrimeRevenue on LinkedIn to stay updated on all our latest insights.

Stay safe, strong and healthy everyone.

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Stephanie Wargo

VP, Global Head of Marketing

Stephanie joined PrimeRevenue in 2015 and oversees the company’s global marketing team and strategy. With a data-driven approach, Stephanie focuses on demand generation and thought leadership to drive brand awareness, strengthen client/partner relationships, and generate new sales opportunities. Stephanie has guided PrimeRevenue through new technology releases and an evolving FinTech landscape. In addition to leading PrimeRevenue’s internal and external communications, she implemented innovative demand generation and marketing strategies to enhance the company’s overall sales pipeline.

Stephanie has extensive experience in marketing and customer success. She previously served as Vice President of Marketing and Communications at BitPay and Vice President of Client Relations and Marketing at FirstView Financial. Stephanie earned a B.A. degree in Political Science from Agnes Scott College in Decatur, Georgia.

Brian Medley

VP, Global Head of Sales

Brian joined PrimeRevenue in early 2012, after more than 20 years of sales leadership, executive-level consultant and business growth experience. As VP, Global Head of Sales, Brian leads a growing team of fintech sales professionals with a focus on developing strong customer relationships, improving sales predictability and helping PrimeRevenue enter the lucrative mid-market.

Prior to PrimeRevenue, Brian honed his enterprise software sales leadership skills at Clarus Corporation. He also served as an operations and IT management consultant for Kurt Salmon Associates. In addition to his sales and consulting background, Brian has deep experience in the financial industry having founded a successful residential mortgage broker and lending business. He is a graduate of the Georgia Institute of Technology having earned a B.S. in Industrial Engineering and Economics and M.B.A. in Global Business.

Jason Green

SVP, Global Customer Success

Jason joined PrimeRevenue in 2021 following more than two decades in the fintech/financial services industry. He brings a strong background is sales leadership due to his impressive relationship building capability as well as a successful track record in creating structure and process improvements. In his role, Jason uses his keen attention to detail to strengthen the customer experience and enhance the company’s solutions to deliver more value to clients.

Prior to joining the company, Jason held several senior level and executive roles with a focus on building and scaling sales and support organizations at both large and small companies. Jason graduated from Murray State University with a B.S in Marketing.

Matt Ford

SVP, Global Product Innovation

Matt joined PrimeRevenue in early 2015 and is responsible for overseeing all commercial, strategic and operational aspects of PrimeRevenue’s supply chain finance offerings throughout EMEA, based in Prague. He has been instrumental in gaining global alignment and developing supplier enablement processes for the region.

Matt joined PrimeRevenue following a 15-year career at Morgan Stanley, where he worked in fixed income operations covering debt syndication through bonds, EMTNS, corporate loans and other debt securitization. Notably, he set up non-core location operations in Europe (Budapest) and all lending operations in Baltimore from scratch.

Matt, who was born and raised in South East England, earned a B.S. in Sports Science at University of Teesside where he mastered the art of TEAM development and accountability as a youth international rugby player.

Dominic Capolongo

EVP, Global Head of Funding

Dominic joined PrimeRevenue in 2016, and is responsible for leading our bank and capital markets funding strategies and execution. He focuses on building global, scalable and highly efficient funding structures that maximize options for supporting PrimeRevenue’s programs. Dominic began his career as an attorney and was a partner with Kaye Scholer before joining DLJ as a senior banker. Dominic brings tremendous strategic and capital markets experience in all areas of finance having held senior positions at, among others, Credit Suisse and RBC Capital Markets in addition to DLJ. Dominic earned a JD from Fordham University School of Law and a BA from SUNY Binghamton.

Gavin Cicchinelli

Chief Operating Officer

Gavin joined PrimeRevenue as Chief Operating Officer in 2021. With more than two decades of leadership and executive experience along with a deep understanding of the payments space, Gavin provides a unique focus on improving and strengthening operational strategies and implementing GTM growth execution. He is responsible for leading transformation across corporate and operational strategies as well as building a repeatable and scalable commercial growth strategy that aligns with PrimeRevenue’s core business while delivering key adjacent growth opportunities.

Prior to joining PrimeRevenue, Gavin served as President and Chief Revenue Officer of Integrated Solutions at TSYS, a global payment processing services company acquired by Global Payments (NYSE:GPN). There, he also served as Head of Product and divisional COO. Throughout his career, Gavin has held multiple leadership positions including VP of Sales, SVP of Business Development, and President of Financial Institutions. Gavin graduated from the University of Northern Colorado, Greeley.

David Quillian

Chief Legal Officer

David joined PrimeRevenue as General Counsel in 2007. He and his team have been instrumental in successfully creating the unique legal structures that support PrimeRevenue’s multi-funder model and global funding capabilities. David is also the lead named inventor on PrimeRevenue’s two patents for Electronic Time Drafts, which allow PrimeRevenue to manage supply chain finance programs using electronic negotiable instruments as opposed to accounts receivable. Prior to PrimeRevenue, David was General Counsel at Harbor Payments, which was acquired by American Express (AXP) in 2006, and Magnet Communications, which was acquired by Digital Insight (DGIN) in 2003. He holds degrees in Economics and History from Duke University, and Juris Doctor and M.B.A. degrees from the University of Georgia.

Nathan Feather

CEO

Nathan has successfully ushered PrimeRevenue from our very early days as a visionary startup, through the financial crisis to today’s position as a thriving mid-sized leader in the cloud-enabled supply chain finance marketplace since joining PrimeRevenue in January 2006. He was instrumental in recapitalizing the company with an $80M investment led by BBH Capital Partners in 2015. Prior to PrimeRevenue, he held various financial management roles with Ariba, Freemarkets and PriceWaterhouseCoopers. Nathan holds a BS in Accounting from Pennsylvania State University.

PJ Bain

CEO

PJ has an impressive and accomplished track record as an enterprise software entrepreneur and executive. PJ has built a solid record of success with PrimeRevenue since being appointed Chief Executive Officer in July of 2009. The company has received numerous awards for growth, customer service, innovation, along with being recognized as a top employer.

PJ is a life-long software and technology entrepreneur having been involved in numerous firms in the roles of founder, executive, advisor and investor. Immediately prior to PrimeRevenue, PJ was the VP and General Manager of Exact Holding N.V. (NYSE/AMS: EXACT), a leading global provider of business software solutions. He was previously Founder and CEO of Inspired Solutions, an Atlanta-based, B2B software and services firm that grew to be the largest reseller of Exact Software in North America, later acquired by Exact. PJ holds a Bachelor of Industrial Engineering from Georgia Institute of Technology.