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Wholesale city riding wave of e-commerce

By Meng Jing (China Daily) Updated: 2014-05-07 10:38

The 11 sites are expected to operate as the secondlevel domains of yiwugou and will be launched later this year in each country's official language. The websites will be run by yiwugou's global partners, which are trade agents with years of experience in providing services to importers.

"With e-commerce improving the efficiency of doing business, the role of brickandmortar markets is changing rapidly," said Wang, who was a senior vice-president of Sohu.com Inc, a major Web portal in China, before heading the online department of the offline market in Yiwu in 2012.

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The majority of China Commodities City's revenue of 3.65 billion yuan in 2013 came from the rents of vendors who do business in the markets. The rent of a booth, which is usually 2 to 3 sq m, can be as high as a halfmillion yuan a year if the location is good.

"The time that a market operator can make a fortune by simply erecting a building and renting out booths will soon be over. In the Internet era, offline market operators need to think how to offer better services to vendors and buyers," said Wang.

This is the main reason that China Commodities City launched its e-commerce site. The majority of the market's transactions still come from offline despite the fact that the businesses are actually bridged through an online portal. In addition, there are many wellestablished businesstobusiness platforms in China dedicated to facilitating trade between China and other countries, such as 1688 from China's e-commerce giant Alibaba Group Holding Ltd.

But Wang said the website has a lot of potential because China Commodities City enjoys unique advantages by having both online and offline operations. "No online marketplace can replace offline markets. Rather than pure competitors, online markets and offline markets work more like interdependent partners," he said.

He said that an online marketplace can only serve as a platform to bridge the information between suppliers and buyers. But to facilitate trade, information is not enough.

"You need a lot of offline services, such as logistics and customs clearance. The Yiwu market, which has decades of history as a trade hub, can offer a onestop service for importers. This is not something that an online marketplace can do," said Wang.

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