China-based Cogobuy Group’s two B2B marketplaces, Cogobuy.com and Ingdan.com, posted hefty sales gains for the second quarter and first half of fiscal 2016 thanks to greater demand from new small and medium-sized electronics manufacturer customers, the company says.

For the second quarter ended June 30, Cogobuy reported:

  • Gross merchandise value of 5.360 billion yuan ($805.7 million), up by 61.7% from 3.315 billion yuan ($498.4 million) in the same period last year.
  • Total revenue of 3.22 billion yuan ($484.1 million) an increase of 32.5% from 2.43 billion yuan ($365.3 million).
  • Net income of 118.3 million yuan ($17.8 million), up 24.9% from 94.7 million yuan ($14.2 million) in Q2 2015.

Of total gross merchandise value, or GMV, for the quarter, 59.7% came from Cogobuy’s     direct sales to end-users, 27.6% from other sellers on its online marketplaces and 12.7% through its supply chain financing business. 41.2% of GMV was from what Cogobuy calls “blue chip” customers while 58.8% from small and midsized, or SME, customers, the company says. Cogobuy doesn’t define in its financial reports what it means by small and midsized or blue chip customers.

Ingdan.com contributed 1.20 billion yuan ($180.4 million), or 22.4%, of total GMV. Ingdan.com is a marketplace where Cogobuy connects buyers and sellers of 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 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. 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 Internet Retailer 2016 Asia 500, which ranks companies by their annual web sales.

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Also in the quarter, Cogobuy and Ingdan entered the robotics industry. Ingdan signed an agreement with Intel to begin building a robotics network that includes hardware, software, artificial intelligence and internet services. Cogobuy also launched Ez-Robot.cn, a platform for selling industrial robotics equipment and parts and a professional community for industrial robot manufacturers, component manufacturers, and system integrators.

Ingdan entered a strategic partnership with crowdfunding platforms run by JD.com, Taobao Marketplace and Suning Commerce to provide hardware startups on each platform with e-commerce services such as product launches and business-to-business distribution. JD.Com Inc. is China’s No.1 retailer by web sales in the Internet Retailer 2016 China 500, Taobao is owned by China’s Alibaba Holdings, which has a stake in Suning Appliance Co. Ltd., an electronics chain and No. 2 in the China 500. Alibaba dominates Chinese e-commerce, but is not ranked in the China 500 because it is purely a marketplace that hosts other sellers and doesn’t sell any merchandise on its own behalf.

For the first six months of 2016, Cogobuy reported:

  • Gross merchandise value of 9.25 billion yuan ($1.39 billion), up by 59.2% from 5.81 billion yuan ($873.3 million) in the same period last year.
  • Total revenue of 5.65 billion yuan ($849.2 million), up 32.0% from 4.28 billion yuan ($643.3 million).
  • Online transaction customers totaled 14,952, up 99.8% from 7,485. Cogobuy says 1.2% of those customers are blue chip customers and 98.8% are SME customers
  • Net income of 203.4 million yuan ($30.6 million), up 22.4% from 166.2 million yuan ($25.0 million).

60.6% of GMV in the first half came from direct sales, 26.5% from Cogobuy’s online marketplaces and 12.9% from its supply chain financing business, Cogobuy says. In total, 42.0% of the GMV was from larger customers while 58.0% came from small and midsized businesses.

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“Compared with the first half of 2016, we are optimistic about our ability to deliver even faster growth in the second half of the year,” says Jeffrey Kang, CEO of Cogobuy Group. Some of that growth is expected to come from Cogobuy and Ingdan expanding into new, complementary markets, including robotics, smart cars and smart homes, he says. “We are committed to matching smart hardware innovators around the world with the best Chinese supply chain and marketing resources. These will open new revenue opportunities and further raise our platform’s visibility. Ingdan.com currently contributes 22.4% of our total GMV and we expect an increase in the next two quarters.”

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