DHgate enters Vietnam's B2B market

DHgate.com, the business-to-business e-commerce website, has linked up with a Vietnamese partner to help local companies from there export overseas.

Diane Wang, its founder and chief executive officer, said on Tuesday that as Vietnam becomes a more important manufacturing base with its low costs, DHgate has joined hands with privately owned local conglomerate Sovico Holdings to provide e-commerce services to small companies from both countries.

"The global manufacturing base is moving gradually toward Southeast Asian countries", even though China is likely to remain in a dominant market position for at least the next five years, Wang said.

Vietnam's total exports reached $114.6 billion last year, a year-on-year increase of 18.3 percent, which enabled it to register its first trade surplus in two decades, according to its General Statistics Office.

China saw its exports grow 7.9 percent to $2 trillion in 2012 from the year earlier, which was actually the lowest growth rate in a decade, with the exception of 2009, which was blamed by the General Administration of Customs on the weak economic situation in the debt-stricken eurozone and wavering global economic recovery.

The Vietnam agreement is the first of this kind by DHgate, which connects mainly Chinese small and medium-sized enterprises with foreign buyers, thus helping its suppliers facilitate transactions and reduce costs.

Sovico will be responsible for operations in Vietnam and expanding the reach for local SMEs there, while DHgate will offer training and help them connect with global buyers.

Wang added that DHgate is also currently in talks with partners in a number of countries, including some in South America, and may take on further similar expansions later this year.

To facilitate international payment settlements, DHgate signed a partnership agreement in April 2011 with PayPal, the world's leading online payment service provider.

Zhang Zhouping, an analyst with domestic research company China e-Business Research Center, which follows the e-commerce retail industry, said that Vietnam's growing exports represent a revenue source for e-commerce companies like DHgate.

DHgate is ranked fifth in the Chinese business-to-business market, with a 2 percent share, after alibaba.com, Global Sources, Hc360.com, and made-in-china.com.

It has more than 1 million Chinese SME suppliers signed up, and 4 million buyers from 224 countries, it said.

Alibaba, the business-to-business website run by e-commerce giant Alibaba Group Holding Ltd, has a dominant 47.4 percent stake in the market, measured by revenues in the third quarter of last year, according to research company Analysys International.

On Alibaba, there were 87,544 paying Chinese suppliers and 7,641 foreign ones by March last year.

Chinese online retailers are also stepping up their efforts at Vietnamese expansion.

Vancl (Beijing) Technology Co, an online clothing retailer, has already teamed up with the Vietnamese online payment company ECPay to provide a Vietnamese-language website, and set up local operations in September to cash in on Vietnam's growing domestic market.

chenlimin@chinadaily.com.cn

(China Daily 01/30/2013 page16)