By ChinaTechNews.com Editorial Team
Despite a worldwide financial crisis, China's e-commerce industry is seeing something of a boom, growing over 120% in 2008 and with rapid growth projected over the next 3-5 years. At the moment, the demand for low prices and high quality is overwhelming, and traditional wholesale channels are losing ground to Internet-based platforms that allow businesses at home and abroad to carry out all their transactions online.
Amidst the rush of online companies seeking to woo businesses to China for their outsourcing needs, one firm stands apart. DHgate.com, created by Joyo.com founder, Diane Wang, is said to have been deliberately engineered to benefit small businesses.
ChinaTechNews: With the world struggling through the global financial crisis, why do you think this is the best time to grow your business abroad?
Diane Wang, CEO of DHgate.com: Our entire goal is to help jump-start new businesses. During this global economic downturn, more people are starting their own businesses than ever before. Conservative estimates suggest that there are over 40 million small businesses in North America and Europe, and we want to help raise that number, to help revive and rejuvenate small retailers and wholesalers. Done right, e-commerce could level the playing field between the smallest businesses and the largest.
DHgate.com can give these companies an edge – we understand what entrepreneurs need and have created an online marketplace that offers a safe, easy, and powerful way to harness Chinese suppliers. And this is happening at a time when America is turning to small businesses to put the economy back on track.
ChinaTechNews.com: Why do you think small U.S. companies, some of whom may not have sourced products from outside their own state, are now looking to source directly from China?
Wang: Small business trade with China never used to be practical, and buying from overseas has always been the domain of the large companies, giving them an unfair advantage.
Going online and finding products to buy from China may be easy, but that's only the beginning. Finding a seller you can trust, agreeing on price, placing the order, arranging payment, and handling shipping, customs, and delivery all create massive overhead for small businesses.
So what we've done is to take all of those logistical headaches and simplify them, speed them up, and make less time-consuming and less expensive. So now you don't need to be an expert in foreign trade to make it work – the DHgate system is your expert.
ChinaTechNews.com: How do you expect to differentiate yourself from big and established B2B competitors in China like Alibaba.com?
Wang: You know something? I honestly relish competition — it encourages us to do our best and it adds credibility to what we're trying to achieve.
And in any case, DHgate isn't really like anything else out there. We are targeted specifically at small businesses, so though we're in the same market niche as some of the other e-commerce companies out there, our business model is completely different.
Other companies profit from charging Chinese suppliers for displaying their business offerings online, then they largely leave sellers and buyers to take care of the business transaction offline. This doesn't help small buyers because there is no mechanism there for them to trust these sellers who are halfway around the world.
That's not effective way to help small retail shops do business directly with diverse Chinese suppliers, so our service is able to provide unprecedented value to entrepreneurs.
ChinaTechNews.com: What do you think it is that sets DHgate.com apart?
Wang: We're opening up the benefits that have, until now, been restricted to big businesses. DHgate.com gives every small business quick and easy access to the power of a global supply chain.
What that means is this: we provide access to a wide selection of quality Chinese products at optimal prices, you can buy products in small volumes and at a high frequency, and we are lowering your supply chain costs so that the price you get from courier operators, payment service providers and others are 20-40% of rack rates.
ChinaTechNews.com: But what about the risks of buying online, and from China in particular, which has a poor reputation for copyright infringement?
Wang: Any responsible business needs to work extremely hard to keep counterfeit products and anyone infringing on intellectual property rights off a marketplace. In our case, we've also partnered with PayPal, who is heavily experienced on that front, to remove counterfeit products from the site and maintain a healthy business environment for buyers and sellers alike.
But we list about 20 million products and that's a daunting choice. While we're doing everything we can to erase the distance between buyers and the sellers, we need to be real: buying and selling online is not like doing business face-to-face.
Buyers should always take the time to choose their suppliers carefully and to minimize risks, we have instituted 3 separate processes – Seller Feedback, an Escrow Service and a Dispute Process.
A seller's Feedback Score shows how he/she has been rated by other buyers and typically, the higher the feedback score is, the more reliable they are. The comments section tells a story about attitude, credibility, and the extent to which that seller is really focused on building a good reputation.
Our Escrow Service, meanwhile, ensures that buyers can be confident in their purchases. DHgate act as a third party that collects, holds and disburses funds on buyers' behalf. We track the shipped merchandise, verify that it was delivered, and only release the funds to pay the seller when the buyer accepts the merchandise.
Finally, on the rare occasion where disagreements occur, we also offer a full Dispute Process to help track, manage, and resolve your dispute as quickly as possible, with DHgate acting as an impartial judge.
ChinaTechNews.com: And how is business for DHgate.com? Do you have enough buyers and sellers using your service?
Wang: Well, we are extremely pleased with how things are going so far! We have over 300,000 sellers now, in 34 provinces and districts in China – primarily in the Yangtze and Pearl River Delta areas. We also have about 1.4 million registered buyers in 230 countries and regions around the world.
ChinaTechNews.com: What are your projections for the future? Do you think e-commerce in China will continue to boom?
Wang: I'm confident that buying directly from China will prove to be the near- and medium-term trend for SMEs, simply because it is one of the simplest and most obvious ways to drive down costs and increase market competitiveness. Sourcing directly from China will enable international SMEs to adopt a new means of product sourcing and purchasing: buying a small volume at a high frequency.
ChinaTechNews.com: And will you be launching any new products in the coming months?
Wang: Of course we are always looking for opportunities to expand develop our services. For example, we have just launched our What's New Zone – a special area that lists all the new items from the 8 fastest-growing sectors in our online marketplace from a reputable selection of sellers. We intend to release some new value-added services soon, so stay tuned.