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Hefei Fast to develop overseas B2C sales

Set up in 2011, Hefei Fast Information Technology Services Company (HFITS) is an emerging private IT enterprise transformed from a trading website of virtual products such as coins and equipment for online games. The former website worked hand in hand with the partner merchants of PayPal, the payment platform, to provide overseas customers and domestic users with a trading platform for game products, drawing its revenue from price differentials and commissions. Upon its establishment in 2011, HFITS began to engage in overseas business-to-consumer (B2C) physical sales, selling mainly bridal gowns, wigs, bikes and other outdoor gears to Germany and Russia. At present, it employs more than 1,000 people.

The B2C marketing model of HFITS’s overseas sales is basically built on a clientele of more than 7 million overseas game players and various online marketing tools found on Google, AOL, Yahoo and other websites, including the use of the organic traffic of search engines, pay-per-click (PPC) advertising and search engine optimisation (SEO) that optimises the basic elements of a website to suit the indexing algorithms of search engines so that it will have a great chance to be listed at the top of the engines’ search results. At present, the size of its physical sales clientele has exceeded 100,000 and the daytime click rate of its website is over 6,000 per day. The logistics base of its physical sales is located at Wenzhou out of cost consideration. The peak season of its business is between end of October and the following February. Since its establishment, its daily physical sales volume is over US$10,000 on average.

HFITS is a business venture set up by a few investors with a registered capital of Rmb20 million. It plans to increase its profit through market segmentation of bridal gowns, yachts, kayaks, custom-made jewellery, eyewear, etc. It has partners in the US, Hong Kong and the Netherlands, where the US partner is primarily responsible for payment collection, the Hong Kong partner serves as the agent for offshore Renminbi and US dollar settlement, and the Dutch partner is mainly responsible for European and US market analysis and server operations.

As regards the future of the B2C business model, the company’s top management predicts that its forthcoming product mix will be expanded to cover all kinds of daily necessities and articles where its suppliers will be further segmented, operating differently from the present one-stop general store mode. So long as the exchange rate between US dollar and Renminbi does not fall below 1:4, the B2C business model can still survive for 20 more years. In the days to come, this business model will pay more attention to customer care and a designated team has been set up to provide instant online customer service to overseas customers.

by Kelly Dai, Shanghai Office

Content provided by Picture: HKTDC Research
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