360buy.com spreads its global wings
Updated: 2012-10-18 09:55
By Shen Jingting (China Daily)
Company wants to take Amazon as its role model
China's second-biggest business-to-consumer website by revenue, 360buy.com, is poised to enter overseas markets by introducing an English-version e-commerce website this week.
Shi Tao, vice-president of the company, told China Daily the company wants to extend its reach to the global market and establish an online empire on the same lines as the Seattle-based Amazon.com Inc.
"Amazon has long been regarded as a role model for 360buy.com," Shi said.
By cooperating with international courier companies such as DHL and UPS, 360buy.com will increase its business presence to 36 countries, especially in North America and Europe. It will offer nearly 400,000 products, from consumer electronics to clothing and books, to customers overseas, Shi said.
"In the initial stage, we want to buy made-in-China products domestically and deliver them to overseas clients," Shi said. Gradually, 360buy.com plans to set up warehouses in specific countries, allowing it to buy and store Chinese products in large quantities in these countries. The delivery period will be greatly shortened, offering overseas customers more satisfaction, Shi said.
But he said the ultimate goal for 360buy.com is to act like Amazon in conducting business in different countries locally, having a widened product source as well.
"How fast can we reach that stage? I think it depends on our performance from now on," Shi said.
When visited on Wednesday, en.360buy.com, the English e-commerce website scheduled to be started by 360buy.com, carried the message: "Coming soon". The page also said people can obtain detailed information from social networking websites such as Facebook and Twitter.
Established in 2004, the Beijing-based 360buy.com grew rapidly by drawing 60 million registered users by June. Almost all of them are from the Chinese mainland.
Amazon, billed by the industry as the world's biggest retail website by user numbers, has more than 60 percent of its customers coming from countries outside North America, the US-based digital research firm comScore Inc says.
"Where we are now, is probably at the stage where Amazon was five or six years ago," Shi said.
In addition to aggressive overseas expansion, he said his company aims to become a huge hub for digital content, covering digital books, music and various audio products.
Richard Liu, founder and chairman of 360buy.com, once said he dreamed of placing 360buy.com among the top five e-commerce companies in the world. Expanding overseas has long been regarded as an important step for its future development.
Shi said 360buy.com will stick to its low-price strategy when exploring markets outside China. "We have to set up advantages on pricing, because we are facing the masses, not people in elite groups," Shi said.
He said the company will offer free shipments for all the books sold on en.360buy.com. About 20 percent of goods in categories such as general merchandise and consumer electronics will follow the free shipping policy as well.
Liu said in an interview two years ago: "Because I believe 360buy.com should help clients save money, this philosophy has not changed in the past, at present, and in the next 100 years. This is how we create value."
Fierce competition in China's e-commerce market and an increase in domestically manufactured products have spurred companies such as 360buy.com to go global, analysts say.
Hong Bo, a Beijing-based IT critic, said the gross profit margin of China's retail websites has narrowed because of an intensified market environment. Companies with "bricks-and-mortar" operations have started to pay more attention to building up online businesses.
"We smelled blood in the price war between 360buy.com and Suning (a major home appliance chain store operator) in August. The harsh competition in China's e-commerce industry will definitely continue," Hong said.
The overseas market, with its "big arena" and light competition, holds great business potential for Chinese companies, he said. "Before 360buy.com's move, plenty of domestic companies, such as Alibaba, had done a good job overseas. Their success stimulated more firms to join in," Hong said.
Last month, Vancl.com, a Beijing-based clothing retail website, said it will start operating in Vietnam.
Chen Shousong, an analyst at the Beijing-based research firm Analysys International, said: "Chinese products still have great appeal worldwide. They create opportunities for companies that hope to conduct cross-border trade."
Chen said 360buy.com's overseas expansion could raise global investors' interest in the company. Rumors have circulated in recent months that it would soon hold an IPO.
Investors in 360buy.com include Digital Sky Technologies - one of the largest institutional investors in Facebook - and Robin Li, founder of the search engine Baidu.com.
Competing with Alibaba Group's Tmall.com in the business-to-customer market, 360buy.com had nearly 30 billion yuan ($4.7 billion) in sales last year.
It says it plans to hire 20,000 employees this year, pushing its total to more than 35,000. The number of registered users for its services is likely to pass 100 million this year.
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