Lenovo Online: Dipping a Toe in the Water

Beginning January 9, Lenovo (0992.HK) has begun making a group-purchase model available to small- and mid-range enterprise Alibaba members. The program is available in 14 cities including Beijing, Shanghai, and Guangdong.

The move has once again aroused speculation as to Lenovo’s strategy for B2B and B2C online sales, but a source at the company says that the group-purchase program is a limited-time offer that will end January 31. “Lenovo is not currently seeking online distributors,” the source said.

Lenovo, the top brand in China’s PC market, doesn’t really need an online distributor. Theirs is a strong brand name and is known to just about everyone in China that has considered, looked at, or even used a computer in China. Alibaba has a much-coveted list of small and medium (SMB or SME) companies in China, but that’s not what interests Lenovo. Alibaba has built an online sales infrastructure that Lenovo lacks. With a limited sales program via Alibaba Lenovo can assess the utlity of online sales without building an online store.

Whenever Lenovo is ready to sell online, they can just do it themselves.

Alibaba's Taobao.com to launch B2C services next March

Taobao.com, Alibaba's<1688> online auction site, has confirmed that it will launch the business-to-consumer (B2C) services from Mar. 1, 2008, according to a Chinese source.

Taobao will integrate its parent's B2B and C2C platforms on its own website rather than launching a new B2C platform. Earlier reports said Taobao had already signed up well-known companies such as Motorola, Nokia, Haier, Aigo, Lining, Adidas, Giordano, and UT Starcom in preparation to expand its B2C services.

It is estimated that China's B2C market value will amount to RMB 13.6 billion in 2011, with an annual growth rate of about 48.63%. However, the market is currently dominated by dangdang.com and Amazon.com's China online retailer.

Though Taobao's existing user base will significantly aid the launch of its B2C service, the company's lack of experience and infrastructure in logistics will impede the business unit's growth, according to industry analysts.

As the most popular online auction site in China, Taobao's transaction volume for the first half of 2007 was RMB 15.7 billion, almost double the amount for the same period last year. As of Jul. 30, 2007, it has about 75 million online product listings, with 39.9 million registered users.