Looking for trustworthy Chinese suppliers for your business can be a game of luck especially if you are not familiar with the country and do not speak the language. With more than 40 million small and medium-size enterprises (SMEs) in mainland China, using one of the many business-to-business (B2B) e-commerce platforms to identify potential partners can save time and mitigate risk.
The Global Market Group is one such firm, providing an e-commerce platform for companies looking to source goods and products from Chinese companies. With around 100,000 suppliers it may not be the largest e-commerce platform, but what differentiates Global Market from its competitors is the background checks they run on Chinese suppliers before including them in their B2B portal, says the firm's managing director of overseas operations, Danny Yip.
“We are the only e-commerce platform in mainland China to implement a mandatory audit on our customers before they can advertise their products through our portal,” said Yip. “At the time , our competitors thought the idea of having to audit every single Chinese seller was ludicrous.”
But the company is finally reaping the rewards of its hard work. While some rival companies have been making headlines recently for all the wrong reasons, including for fraud and collusion with Chinese suppliers, Global Market is in the process of transitioning from the traditional subscription-based business model common to most B2B e-commerce portals to a transaction-based business model. And the essential ingredient for this bold move is trust, says Yip.
“It takes time for us to build up a certain level of trust from our buyers, and now our persistence has been paying off substantially for the past few years,” he explained. “Without trust from our buyers, it would be impossible to move from a subscription-based business model to a transaction-based one.”
And by being a source of reliable and accurate information for Chinese companies, Global Market has become one of the more credible e-commerce platforms in China, says Yip. The company outsources the auditing process to Germany-based TÜV Group which issues a certificate for the Chinese company and acts as a guarantor -- as long as the company checks out. “The quality of information is far more important than the quantity of information for an e-commerce platform,” said Yip.
While around 500 towns in China have been identified as industrial towns, Global Market currently has a presence in just 25 leaving plenty of growth potential for the ambitious firm. According to a report by iResearch on China’s B2B e-commerce industry, the top 3% of China’s SMEs contribute to about 97% of the country’s total exports. It is these elite SMEs and other large local companies which are Global Market’s target customers.
The company’s philosophy of allowing only the most legitimate suppliers to advertise on its portal has attracted industry greats such as Jack Welch to present at its forums in Hong Kong and China this year. “The value in an e-commerce platform is the ability to allow our buyers to select from a pool of reliable suppliers in terms of product quality and delivery, otherwise it would be much easier for them to just use a bog standard internet search engine,” Yip concluded.