HC360 Launches Foreign Trade Platform
National Business Daily, 11/06/07
HC360 has announced the launch of its foreign trade platform, MadeinChina. To date HC360 has concentrated on domestic trade, with this move marking its entry to the international arena.
LENS: Founded in 1992, mainland B2B site HC360 focuses on domestic trade. The company listed in Hong Kong in December 2003, the first mainland B2B e-commerce enterprise to IPO. Currently, its business covers over 60 industries with over 5 mln registered users, but the company has performed poorly recently, recording losses in 2005, 2006, and H1 2007.
| HC360 Annual Revenue (USD 1 = RMB 7.49) | ||
|---|---|---|
| Year | Revenue (mln USD) | Profit/Loss (mln USD) |
| 2004 | 41.9 | 5.3 |
| 2005 | 42.9 | -3.3 |
| 2006 | 38.9 | -13.2 |
| H1 2007 | 18.1 | -1.6 |
In 2005, IDG, which in 1999 had invested USD 8 mln for a 17.4% stake in HC360, turned to invest USD 13.4 mln in a competing domestic B2B site, China Wanwang's Maimai Wang. To improve its financial situation, HC360 responded by restructuring - selling of its loss-making TV ad business to Metaphor Corp., and a 42% stake in its search engine subsidiary, Zhongsou, to Fidelity, IDGLP, Legend and Yulian Investment for USD 4.74 mln.
Having struggled in the domestic B2B market, HC360 also began looking for opportunities in the international B2B market. In May 2006, it set up a strategic partnership with international B2B trading firm Global Sources. As part of the agreement, Global Sources acquired a 10% stake in HC360, with an option to increase the stake to 35% within 12 months after the initial purchase. However, HC360's losses continued to increase in 2006, prompting Global Sources to pass on exercising the option.
HC360's new international trade platform, MadeinChina, was developed and launched independently of Global Sources, marketing department spokesperson Li Yuan explained to Marbridge in a telephone interview. Asked whether the new platform would compete with Global Sources, Li had no ready reply.
In 2006, HC360 comprised 3.7% of China's B2B market, lagging far behind market leaders Alibaba (51%) and Global Sources (20.2%).
HC360 actually first launched its MadeInChina foreign trade platform this past August, but not satisfied that the original announcement received enough attention, has relaunched this week, making the announcement through Hong Kong Exchange and Clearance Ltd. The platform should not be confused with Made-in-China, another B2B company founded in 1996 and owned by Focus Technology.
Keywords: MadeinChina China Wanwang Maimai Wang Li Yuan market share Made-in-China Focus Technology Alibaba B2B e-commerce Global Sources HC360 Internet Zhongsou
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