China to Open Its Doors to B-to-B E-Commerce

SAN MATEO (05/16/2000) - In another example of the Internet tearing down international trade barriers, two U.S. companies and the Chinese government on Tuesday unveiled a major e-commerce alliance.

The China Light Industry Ministry, which is part of the Chinese government, along with St. Louis-based Excel Group Ltd. and Atlas Commerce in Malvern, Pennsylvania unveiled the ChinaTradingTime.com Web site for business-to-business e-commerce.

When fully deployed, the trading site will give manufacturers in the United States and around the globe access to the Light Industry's 240,000 manufacturers of consumer products in China, officials said.

The site is expected to go live within 30 days. In phase one, the site will be connected to about 25 percent of the total number of manufacturers in the Light Industry Group, according to Jim Xu, chief operating officer for the Excel Group. Such companies already have electronic procurement systems, such as EDI.

"These are the larger companies with an IT infrastructure already in place," noted Xu.

In the second phase, Chinese manufacturers that use computers but mainly for internal databases and financial applications will come on board, officials said. And in the third phase, the Chinese government through its Light Industry Ministry will enable the remaining smaller manufacturers to go online to offer their products worldwide, officials said.

The Excel Group is the site owner of ChinaTradingTime.com and will be responsible for creating and maintaining the site from sourcing through settlement, officials said. Atlas Commerce will host the site and use its Metraprise software as the underlying infrastructure for signing up buyers and suppliers and for currency conversion as well as offering multiple languages for such basics as product descriptions and translation of company names.

The e-commerce site will offer chat rooms for online negotiating, dynamic pricing, reverse auctions, and request for quotes in its second phase expected to roll out later this year, officials added.

Companies in the Light Industry group have average annual sales of $5 million dollars, with the larger companies far exceeding that number, said Xu.

Estimates vary on how much money can be saved on the final price of a product after eliminating some but not all of the agents associated with the import-export business, officials said. However, a manufactured product can see an increase of as much as 400 percent to 600 percent by the time it gets to the consumer.

"Each touch from manufacturer to agent to importer to buyer can increase margins by as much as 100 percent," according to Xu.

Some of these agents will disappear with the advent of such trading sites, noted Xu.

ChinaTradingTime.com will not remain a one-way site for long, according to Bill Voss, vice president of sales and marketing at Excel. There are plans underway to allow Chinese manufacturers to buy raw materials from U.S. companies, as well as future plans to move beyond trade with the Light Industry Group to heavy equipment and services.

Atlas Commerce, in Malvern, Pennsylvania, can be reached at www.atlascommerce.com. Excel Group Ltd., in St. Louis, Missouri, is at www.chinatradingtime.com.

InfoWorld Editor at Large Ephraim Schwartz is based in San Francisco.

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