Chinese Commodities Giant Embraces B2B E-Commerce

China Commodity City, which has been appraised as the largest commodities market in China, has formed a partnership with Tianrong Internet Products and Services, Inc. (TIPS) to develop China Commodity City’s global B2B e-commerce site, expand the English language portion of the company’s current site, and upgrade the site’s infrastructure to international B2B standards.

China Commodity City is already doing big business at its China Commodity Mall in Yiwu in Zhejiang, China. The shopping mall covers 390,000 square meters, which are divided into 27,000 stalls. Over 150,000 people visit the commodities mall and over 3000 metric tons of goods are shipped out every day. These transactions amount to over $20 billion (US$) in sales every year.

Taking Advantage of an Expanding Market

Expanding into the global B2B market will allow China Commodity City to take advantage of the coming boom in B2B e-commerce. A recent report by GartnerGroup predicts that over $403 billion will change hands this year via online B2B transactions, and that number is expected to climb to $7.3 trillion by 2004.

China is becoming a force to be reckoned with in the burgeoning online B2B market. TIPS President James Tilton said, “As everyone knows, B2B in China is extremely hot and I feel that it is a major step to form a partnership with a company such as China Commodity City.”

The numbers back up Tilton’s statement. An August report by GartnerGroup showed that China currently ranks fifth in the Asia Pacific region in terms of B2B projects under development, but the number of planned projects is expanding.

As in the United States, cost reduction is a primary reason behind the expanding Asian B2B market. According to Lane Leskela, principal analyst for GartnerGroup’s e-Business Services Asia/Pacific, “As in North America and Europe, the B2B e-business explosion in Asia/Pacific is being fueled by waves of Internet-centric investment and IT spending focused on operating cost reduction and demand generation for brick and mortars.”

Internet Growing in Importance in China

China Commodity City’s deal with Tianrong Internet Products and Services is just the latest evidence of the growing importance of the Internet in China. A survey by Fortune China showed that 61 percent of Chinese businesses have Web sites, and that the majority of Chinese professionals — 60 percent — use the Web for business.

Chinese professionals are not the only people jumping on the Net bandwagon. The numbers of Chinese Web users is growing exponentially. The China Internet Network Information Center estimated that the number of Internet users grew from 4 million in July 1999 to 8.9 million in January.

About TIPS

Tianrong owns five Internet related companies: A-Web Internet Services, which provides Internet services in New York; AAMall.Net, an e-commerce solutions provider; ChinaMalls, which provides bilingual e-commerce services; Chongqing Word Technologies Co., Ltd, a mainland China ISP and e-commerce provider; and Phonecalls.com, a provider of integrated telecommunications services.