Learning Chinese Optional

Internet companies make business with Asia, globalization a snap

By Marie Eve Demers

In the Internet age, globalization has evolved from an enviable competitive advantage to a business necessity. Already, U.S. businesses are engaging in successful transactions with Europe and Japan. The next big thing, analysts say, is Asia, a market that looks very promising for business-to-business (B2B) e-commerce.

Jack Li and Paul Wang, president of Best3C Usa and president of Best3C Asia Pacific, respectively

B2B in Asia/Pacific is expected to grow from $9.2 billion in 1999 to $995 billion in 2004, according to GartnerGroup Inc. By 2004, B2B in Asia/Pacific (excluding Japan) will represent 13.6 percent of the total global B2B transactions, which are forecasted to reach $7.3 trillion, the report said.

However, playing on the global level brings a series of difficulties related to language, currencies and cross-border transactions that involve taxes and duties as well as internal government policies. But transacting with Asia can pose additional difficulties, like the sometimes puzzling cultural differences and a slower Internet and technology adoption rate. For example, many business people in Asia do not have a computer at work or don't use a cell phone.

However, help is available for both Asia and the United States. In recent years, or months, many portals dedicated to facilitating B2B transactions between Asia and the United States have hit the market. Here are a few of them. 

Best3C Inc. builds and operates B2B Internet marketplaces. The company was founded in 1999 by Jack Li and Paul Wang, two IT professionals. 3Cvillage.com is a global B2B exchange for what the company defines as the 3Cs: computers, communications, and consumer electronics.

Best3C's business model is based on the fact that Taiwan is one of the most prolific manufacturers of electronic products in the world, and that it could benefit from linking itself to the rest of the world. Li, who has been doing business in the Silicon Valley for 20 years, is president of Best3C U.S.A. He explained that the United States can benefit from doing business with Asia without having to deal with all the difficulties related to uncertainty, quality concerns or international customs.

The 3Cvillage exchange links suppliers and buyers together and allows them to do business without the usual chain of intermediaries and paperwork pileup, Li explained. The site, which one can join for free, offers content and transaction services including credit and payment services. About half of the traded merchandise is composed of electronic components, according to the executive, which amounts to about $1 million a month. Today, the site has about 150 different, prequalified suppliers, many of them on exclusive partnerships. Most customers today are from the United States, but the goal is to expand 3Cvillage to Australia and then Europe. The site's membership is expected to increase to 15,000 by the end of 2000.

Best3C Asia's headquarters are based in Taipei, Taiwan, and tasked with maintaining the buyer/seller databases and securing sourcing and sales in Asian region. The president is Paul Wang, a 20-year IT veteran. Wang is confident that the company's early entry in the market will make it one of the major Internet players.

The Goldman Sachs Group Inc. invested $10 million in the company during its first round of financing.

Asia-Links Media, Sunnyvale, Calif., was founded in 1997 by Mukesh Ahuja, chief executive officer. Asia-Links.com , its information portal, was launched in 1998.

The company has launched its online electronic component marketplace, Asia-Tech.com , which allows multiple buyers and sellers to meet in a neutral environment. Asia-tech offers international logistic, shipping, financing and credit services. There is no fee for enrolling, but a commission is taken on each sale. The site, which is powered by Calico Commerce Inc., is getting between 150,000 and 200,000 Asian and U.S. visitors each month.

MeetChina.com defines itself as an e-marketplace for cross-border commerce with China. Ian O'Connell, chief operating officer, said that it is important that companies learn to localize their operations, understand what the business difficulties are and be flexible to cultural differences. MeetChina.com, a trading portal founded in 1998, provides information about thousands of Chinese manufacturers and their products as well as supplier ratings and quality assurance services. MeetChina.com's online trade specialists help facilitate communication and negotiation between buyers and suppliers.

The company's staff expanded from about 20 in January 1999 to more than 500 people in 13 offices at the start of 2000.

ECnet Inc. was established in Singapore in 1995. Among other services, it offers a digital marketplace for electronic components. ECnet facilitates digital trading of electronic components through Ecpart. The portal, which was launched in February, offers buyers and sellers a 24/7, anonymous trading platform. All sellers are prequalified to ensure the quality of products sold and traceability of product origins. ECnet's customers include such big names as Hewlett-Packard, Advanced Micro Devices, Matsushita, National Semiconductor, Philips, Seagate, TSMC and more than 1,200 of their suppliers.

The company headquarters are in Mountain View, Calif. The company employs 250 people in 13 offices across nine countries. Goldman Sachs is one of the company's investors, along with Morgan Stanley, Doll Capital, 3i, and AsiaTech.