Really interesting post at Seeking Alpha on Ninetowns. We wrote about them back in September when they made a significant investment in Guangzhou-based Global Market but haven't paid too much attention since then.
The Seeking Alpha post talks about the struggles that Ninetowns has had with its core B2G offering since the Chinese government 'encouraged' it to offer a free version. It notes, though, that its Tootoo.com China sourcing site appears to have picked up traffic very quickly. Its Alexa.com rankings (the least unreliable source of traffic data but still quite dodgy we should add) show its 3 month average being higher than Global Sources. We doubt that but it's certainly worth watching.
The article goes on to note:
We had missed that (although we now see it was reported on MSNBC) and it sounds interesting.
A few weeks ago Ninetowns announced the next step in its B2B strategy. By acquiring Baichuan, a leading Chinese vertical search engine, Ninetowns plans to offer industry specific web search for suppliers and buyers engaged in Chinese international trade. In order to enhance the quality and relevancy of search results, Ninetowns plans to use the supplier verification technology from its existing iDeclare and iProcess service platforms.
The Baichuan acquisition allows Ninetowns to merge tootoo.com with Baichuan’s yaphon.com. Baichuan has entered into alliances with more than 30 Chinese B2B portals with access to 400,000 suppliers and 1.5 million products.
We're not sure we agree with this bit of the penultimate paragraph:
Although revenue projections are impossible at this stage, competitor Global Sources (GSOL) has had rapid growth in profits and revenues recently. Although Global Sources relies heavily on sourcing fairs to facilitate transactions, Ninetowns has the potential to succeed without sourcing fairs if its search results can accurately provide quality import/export leads.This has been the dream of Internet analysts for a decade now and it reveals a misunderstanding of how most people really buy the consumer merchandise which is at the heart of the Global Sources/Alibaba.com businesses. It is, though, worth watching.
2 comments:
Not that I trust Alexa numbers, but Alexa also says that 98.5% of TooToo's traffic comes from China. Not good for an export oriented platform.
The Alexa reach and traffic rank numbers also have strange step functions in them. Hmmm...
Thanks for your comment. Yes, I noticed the steps in the data too.
I get roundly chastised by at least one company every time I post about Alexa.com data. I wish there was a better alternative but there simply isn't right now. There are various other efforts at rating but none of them is anything like as comprehensive in its selection of sites or its international coverage.
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