Recently, I was interviewed by international newspaper, China Daily, for their 60th anniversary feature commemorating the creation of the People’s Republic of China. The supplement, which hit newsstands this morning, was entitled “60 People, 60 Stories” and highlighted China’s most promising growth industries and the people who are leading them.
Ecommerce stood out and I was humbled to be among some impressive market-makers. With hard copy distribution to 150 countries throughout the world and 12 million hits a day on the China Daily site (http://www.chinadaily.com.cn), 2/3 of which are from outside of China – I hope that entrepreneurs and small business owners around the globe will not just learn more about my company, but also understand more about the opportunities ecommerce with China can offer them.
I’ve included the article below; you can read the whole feature here. Let me know what you think!
*Online Help*
After Diane Wang sold her online store to Internet giant Amazon.com for $75 million in 2004, an investor offered her $50 million to “build another Joyo”.
But Wang said “no”.
“It wouldn’t have been exciting for me to do something I had already accomplished,” says the 41-year-old Wang, who left Joyo.com in a management reshuffle.
She now heads online trade website DHGate.com, which connects small- and medium sized cross-border traders. Founded in 2004, her business has grown by more than 25 times in the past few years.
While China’s foreign trade has been hit hard by the financial crisis, Wang believes these are the most exciting times for Chinese online businesses.
“The financial crisis changed how foreign trade is conducted,” Wang says.
“Small-and medium-sized enterprises (SMEs) are going to play a bigger role with the help of e-commerce.”
Affected by the financial crisis and economic downturn, China’s foreign trade dropped to $946 billion in the first half of the year, 23.5 percent lower than the same period last year. In Dongguan, the center of the world’s workshop, thousands of export companies closed last year amid the slowdown.
But for small-and medium-sized trade companies, e-commerce has become a helping hand in surviving the crisis – and beyond.
David Wei, CEO of online giant Alibaba.com, which has Yahoo as its largest stakeholder and is listed on the Hong Kong Stock Exchange, quotes third-party figures as saying that SMEs trading online are five times more likely to survive the crisis than those that do not.
Statistics from the Internet research company iResearch Consulting Group show China’s e-commerce transactions reached 2.97 trillion yuan in 2008, 42 percent higher year-on-year.
SMEs accounted for 38 percent of all transaction volume in 2008, but the ratio is forecast to reach 46 percent in 2012.
Sun Chonghui, an analyst with Shanghai-based iResearch, says SME’s desperate needs to reduce costs and the emergence of second-generation online trading platforms contributed to the growth amid the difficulties.
While the first e-commerce platforms like Alibaba are mainly information platforms to connect buyers and sellers, second-generation websites like DHGate focus on transactions.
On DHGate, users can finish all processes from displaying products, quoting, signing contracts, securing letters of credit and finding a delivery company, aside from production and transportation. When the transactions are done, DHGate then charges buyers commissions of between 3 to 10 percent.
“Our model is ‘pay for performance’,” DHGate’s Wang says.
Despite the financial crisis, she says transactions on DHGate hit 1 billion yuan in the first half.
The transactions on the website in 2008 were $200 million.
With these one-stop services, SMEs can start their online shops without even knowing English, because there are three translation companies, more than 20 logistics firms and a dozen means of payment including PayPal.
Li Meng, a 25-year-old Beijinger who lost his job in the summer of 2007 only one year after graduating from college, now runs a fishing lure shop on DHGate.
“I was really scared around August last year. There was not a single new buyer for several months; I knew the financial crisis had really come,” says Li, who now makes more than $5,000 a month.
At that time, he just had one US-based customer, whose continuous purchases kept Li’s business alive.
“I think it was because my timely delivery and reputation in the online community,” Li says.
“Those factors made him trust me.”
Last week I took part in the World Economic Forum’s “Summer Davos” in Dalian, China.