By JONAH GREENBERG
GMAI-Asia.com, the China subsidiary of online auctioneer Greg Manning Auctions Inc. (ticker: GMAI), will sharpen its e-commerce site's focus on consumer sales of electronic goods and appliances, setting aside for now the consumer-to-consumer online auction model that made Greg Manning Auctions successful in the U.S.
The company's China Web site, iatoz.com.cn, which launched last year, originally sought to replicate Greg Manning Auctions' online auction model in China, while adding to the offering a line of consumer electronics. Sales of cell phones and other medium- and high-tech goods, though, have exceeded expectations and are likely to become the site's main focus.
"We are frankly looking at doing a significant amount of our business in the cell phone operation, both online and in stores," said Greg Manning, chairman and chief executive officer of Greg Manning Auctions. Cell phone sales account for "the lion's share" of GMAI-Asia's sales in China, Manning said, speaking to Virtual China from his office in West Caldwell, N.J.
Dominated by Startups
GMAI-Asia recently reported 550 percent growth in online revenues over the first three months of this year. Aggregate sales were over US$15 million in the same period, and online revenues totalled US$1.4 million. However, the China subsidiary, which is 48 percent owned by Greg Manning Auctions, is not yet profitable, because of what Manning calls "one-time expenses."
iAtoZ.com sold 1,000 cell phones per month this year, according to a company statement last month. Last year, GMAI-Asia formed a partnership with Everbright Telecom-land Network Shanghai, which brought to the table a network of sales outlets, distribution facilities, and inventory. Everbright Telecom-land is a distribution arm of the Hong Kong-based conglomerate China Everbright Holdings, which is involved in manufacturing, chain retailing, and property and infrastructure development.
Business-to-consumer and business-to-business sales of consumer appliances and electronics will dwarf the importance of online consumer-to-consumer transactions in the short term, according to Manning. Online auctions and the sale of used goods over the Internet is largely dominated in China by startups Eachnet.com and Club Citi. Those companies are introducing the concept of secondhand sales to their markets in China, where there is little precedent for classified ads.
Alliance with HP
The China-based e-commerce portal will not renounce online auctions indefinitely, according to Manning. In China "there's a huge market for collectibles, and we'd like to capitalize on it as much as we can," he said.
There are 19 million stamp collectors in China, Manning said earlier this year.
GMAI-Asia last week announced a strategic alliance with Hewlett-Packard's China operation, bringing the Internet startup a significant technology boost. According to a company announcement, Hewlett-Packard China will help iAtoZ.com develop sales platforms over wireless application protocol (WAP), a format for wireless Internet use. This is becoming increasingly popular in China, where consumers are more likely to buy a cell phone than a regular fixed phone line.
To reach Jonah Greenberg email: jgreenberg@virtualchina.com
