Demand for electronics products among small and midsized businesses drove continued sharp growth during the fiscal first quarter on Cogobuy.com and Ingdan.com, the B2B marketplaces operated by China’s Cogobuy Group.
The combined gross value of transactions surged 56.0% year-over-year to 3.89 billion yuan (US$594.34 million), Cogobuy says.
Much of the growth comes from an expanding base of active customers, mostly small and midsized businesses, the marketplace company says. Cogobuy’s customer base grew to 11,590 active buyers as of March 31, up 92.6% from 6,017 customers during the same period last year.
The products on Cogobuy.com, including computer chips from U.S.-based Intel Corp. and microcontrollers from U.S.-based Atmel Corp., are used in making consumer electronics products such as mobile handsets and industrial equipment like medical devices. Buyers on Cogobuy.com include computer manufacturer Lenovo Group Ltd. and Huawei Technologies Co. Ltd., a manufacturer of smartphones and other telecommunications products. Lenovo is No. 49 in the Asia 500, which ranks companies by their annual web sales.
Cogobuy divides the value of transactions into three areas: 61.9% from direct sales in which Cogobuy is the seller of record; 25.0% from other sellers on its websites; and 13.1% from the loans it offers buyers on its sites through its supply chain financing business.
Cogobuy doesn’t define in its financial reports what it means by small and midsized customers; the company didn’t immediately respond to a request for its definition of SMEs, but says they accounted for 98.6% of active customers, those that completed at least one purchase transaction in each of the last two years. It says the other 1.4% are larger, “blue-chip” customers.
Ingdan.com is a marketplace where Cogobuy connects buyers and sellers of advanced web-connected technology, such as medical devices embedded with Internet sensors that send information to doctors and patients, sometimes called Internet of Things products. The marketplace booked transactions of 400.6 million yuan (US$61.23 million) in the first quarter ended March 31, or 10.3% of all the sales on Cogobuy’s two marketplaces. Strong marketing initiatives combined with investment in Internet-connected cars contributed to Ingdan’s increase in sales, the company says. “As a rapidly changing Internet company, we prioritize growing our customer base, followed by GMV growth and sustainable earnings growth,” CEO Jeffrey Kang says. “It is a strategic choice for us to use existing resources and earnings to cultivate emerging and fast-growing industries that are paramount to sustainable growth. Under this strategy we have increased our investments in smart car and other emerging fields, while return from pre-project investments will help maintain our growth in business development in the second half of the year.” (Kang is also know by his birth name, Jingwei Kang.)
In April 2016, Ingdan partnered with Israel-based Mobileye, a manufacturer of advanced driver assistance systems, and began setting up operations for Internet-connected cars in the southwestern city of Chongqing, which is known as a national hub for automotive manufacture, research and design in China. “Our goal in entering the smart car industry is to reduce barriers and help automotive aftermarket companies connect with traditional car manufacturers directly,” Kang says. “This will enable stakeholders to share manufacturing resources while boosting automotive aftermarket companies’ development.”
During the quarter the company also launched IngDan Lab, a research institute and business incubator for Chinese Internet of Things companies. Cogobuy also launched the IngDan Hong Kong Experience Center, which connects global entrepreneurs to Ingdan’s supply chain and marketplace. This is Ingdan’s first Experience Center located outside mainland China.
Cogobuy reported for the first quarter ended March 31:
Total gross merchandise value of 3.89 billion yuan (US$594.56 million), up 56.0% year over year from 2.49 billion yuan (US$380.58 million);
Revenue of 2.43 billion yuan (US$371.41 million), up 27.3% from 1.91 billion yuan (US$291.93 million).
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