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March 10, 2008

According to an iResearch report released Friday, the overall B2B trading volume in China reached RMB 24.5 trillion (US $3.45 trillion) last year.

These sales numbers represent almost 58 percent of sales done by SMBs (small and medium-size businesses).

However, this marks the first time that the overall B2B trading volume of SMBs has been higher than that of larger companies. Despite this, many SMBs still opt for traditional marketing and sales routes over online trading, the report noted.

But the numbers also indicate that SMBs will increasingly use the Internet as a B2B trading platform over the next five years, said iResearch.

It also found that the online sales budget of China's SMBs accounted for about 14.2 percent of its total sales budget last year, up from 14.2 percent year-on-year.

SMBs have taken advantage of the government's drive to develop B2B and e-commerce applications, along with widening Internet penetration, the report said.

But on average, many obstacles still remain for SMBs in the lack of credit protection online, the rather slow development of third party payment solutions and a lack of staff skilled in the B2B segment.

Overall, most SMBs that used the Internet to trade were in the computer software, electronic appliances and clothing industries, the report said, with companies in the food industry being among the least likely to trade online.

Alibaba.com, the B2B trading platform that focuses on SMBs, continued to lead the B2B market for most of last year. Its revenues totaled RMB 2.25 billion (US $316.4 million), up over 65 percent year-over-year, accounting for 57.3 percent of China's total B2B revenues last year, up from 51 percent the previous year.

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Source: China B2B News