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Traders embrace new concept in selling

By Yan Yiqi and Shi Xiaofeng in Ningbo (China Daily) Updated: 2014-07-21 07:15

Traders embrace new concept in selling

The unveiling ceremony of the e-commerce platform of Zhejiang Materials Industry Group. Provided to China Daily

Companies large and small, State-owned and private, are embracing a new way of doing e-commerce in China that they hope will revive flagging profits.

As a result of central government dispensations to Ningbo in Zhejiang province, the city has opened a free trade zone and an Internet site that allows companies to import goods at a relatively low tax rate and sell them online.

One of the first to jump in was Ningbo Fubang Holding Group Co Ltd, a trader and manufacturer which is also involved in other areas.

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Fubang's exports dived last year as many world economies continued to flounder. It had a net loss of 35 million yuan ($5.6 million), having had net profit of 5.13 million yuan the year before.

Instead of just hoping for the best, Fubang decided to innovate and try importing overseas products by setting up Ningbo Fubang E-Commerce Development Co in September, just weeks before the Ningbo free trade zone opened.

"Starting in 2008 when the economic crisis hit the United States, European countries and developed countries elsewhere, external demand weakened," says Li Feng, secretary to the general manager of Fubang's e-commerce company.

"But domestic demand has been growing rapidly. With rising incomes and the improvement in living standards, more and more Chinese are choosing products made overseas, particularly in countries like Germany and Japan."

Fubang started doing business through the free trade zone's e-commerce website, kjb2c.com. Companies using the site do so free of charge, but they pay free trade zone authorities for space in a warehouse in the zone in which their goods are stored.

Twenty Fubang employees handle 60 to 70 orders a day now, the company says. Monthly sales revenue has reached 400,000 yuan to 500,000 yuan.

"Compared with the revenue of the whole group, the e-commerce revenue is minuscule," says Song Hanping, CEO of Fubang Holdings.

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