Online B2B Marketplace Provider Global Sources See Dip In Online Sales

Global Sources Ltd., a Hong Kong-based B2B company that facilitates international trade with Greater China and other parts of Asia through exhibitions and other means, reported a drop recently in second-quarter online sales, driven primarily by declines in hosted online B2B websites.

During the quarter ended June 30, the company, whose target audience is buyers and sellers of all sizes and whose primary service is hosting marketing websites that present suppliers’ product and company information for buyers, generated revenues of $48.3 million, down 21.3 percent from $61.4 million. Profit from operations was down 67 percent, to $6.2 million from $18.8 million.

Online revenue from hosted B2B websites was down 8.4 percent, to $20.8 million from $22.7 million a year earlier, caused mostly by a weak China export market that affected website sales during the period, the company said.

By region, China revenue dropped 4.8 percent, to $48.1 million from $50.5 million; rest-of-Asia revenue was down 8.1 percent, to $9.1 million from $9.9 million; U.S. revenue rose 17.6 percent, to $1 million from $850,000; and Europe revenue dropped 29.6 percent, to $95,000 from $135,000.

In commenting on Global Sources’ strategic direction during a conference call to discuss the quarter’s earnings, Merle Hinrich, executive chairman,  said the company continues to focus on its core business of serving buyers as a worldwide resource from China and Asia.

“We’re also focused on steadily building our presence in the domestic B2B market, while our core export focus business strategy is to provide a broad multichannel platform with the fully integrated offering of online marketplaces and tradeshows,” he said.

Buyers use the company’s online services to search and make inquiries, and they then come to its tradeshows and private-sourcing events to negotiate directly with suppliers. “I always want to closely examine products and have face-to-face conversations with potential business partners,” Hinrich said. “An ideal solution for many professional buyers is to take advantage of the best at both tradeshows and online we have to offer in order to source more safely and profitably.”

Global Sources’ newest initiatives include its Mobile Electronics Show, which takes place in October, along with its companion website that launched on Aug. 6. “Both media play a very important role in differentiating the value of Global Sources services,” Hinrich said. “By leveraging the combined strengths of a website and the show, we have provided greater focus to the specific needs of buyers and suppliers in this industry sector.”

In June, the company held its China sourcing fairs in Miami for buyers in Latin America and the United States, and in July it held its 14th China International Fashion Brand Fair in Shenzhen, also known as the FashionSZshow. An increasing number of international brands participated in this year’s event, including exhibitors from Germany, Italy, the UK, the U.S., France and Taiwan, Hinrich said.

“While attendance was very strong, exceeding 70,000, we continue to experience a challenging macro situation for high-end brands with consumers and the evolving market,” he said. “We are working to increase international exposure and focus on the up-and-coming designers that serve the industry.”