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Diane Wang, DHgate.com founder and CEO
China is renowned as the Aladdin’s cave of global manufacturing. Literally hundreds of thousands of manufacturers produce and sell a vast range of items at very low prices.
If you can cope with the bureaucratic maze of international trade and the barriers of language, buying from Chinese suppliers can be very profitable.
That’s why trade lead and online directory services such as Alibaba.com and Global Sources have become so popular.
But many smaller Australian wholesalers and retailers neither speak Chinese nor understand the complexities of international trade.
Which is why a relatively new online Chinese B2B (business to business) marketplace, known as DHgate.com, is worth looking at.
Its online marketplace offers a simple, eBay style, approach to buying from Chinese manufacturers.
DHgate lets you buy online, use PayPal for payment, and include shipping costs in the transaction.
Its much simpler than using Alibaba to identify a buying lead, and then having to contact the supplier and negotiate, yourself, the price, payment terms, shipping arrangements and costs, and all the relevant customs and trade clearances.
Not surprisingly, DHgate has become very popular and has grown very rapidly since it set up in 2004.
Today, DHgate claims to list 20million products from more than 400,000 different Chinese manufacturers and suppliers.
With 2.1 million buyers using the service each year the company says it is now PayPal’s largest client in the Asia-Pacific region.
Founder and CEO, Diane Wang, was originally the head of marketing and then business development for Microsoft in China. But in 1999 she left the company and a few years later experienced her first big success with an online book business she had started up - joyo.com.
Amazon bought the business in August 2004 for a reputed $75million.
Wang maintains a personal blog at http://www.thegatewayblog.com/ where she explains that Alibaba and DHgate are very different businesses.
“While their primary service involves providing information listings akin to Yellow Pages, they do not actually host transactions as DHgate does; also, the bulk of their users are domestic, whereas 100% of our buyers come from outside of China. “
“ Our business models also differ greatly, as ours is a pay-per-performance model, allowing users completely free access and generating revenue only when an order is successfully completed. Alibaba generates revenue by charging memberships fees and paid keyword advertising”
DHgate also incorporates other features that anyone familiar with eBay will recognize and appreciate, such as a feedback rating system.
Just as in eBay this system tells buyers how many transactions the supplier has already done via DHgate, and so enables as independent assessment of their trustworthiness.
For those needing more security, such as in larger transactions, DHgate also offers an escrow service, enabling payment to be with-held until the goods have arrived.
Speaking with eCommerce Report from the company’s head offices in Beijing last week, a company spokeswoman said that globally, Australia is one of the three biggest sources of business for DHgate.
Indeed the company already has its own warehouse in Sydney.
And buyers can search for items that are already in Australia if they want to start with just a toe in the water, and avoid the risks of delay associated with international freight.
Of course, just as with eBay, buyers need to beware of sellers offering products purporting to be from major brands like Sony or Apple.
China is developing respect for international market norms with Intellectual property but is not yet at the same level as in say, Australia or the US.
If someone is offering something for sale at a price or on terms that appear too good to be true, they probably aren’t true.
That being said, there is no doubt that DHgate.com offers significant opportunities for Australian wholesalers and retailers that they’d be mad to ignore.
For more information go to
www.DHgate.com
www.alibaba.com
www.globalsources.com
www.thegatewayblog.com/
www.joyo.com
