The SARS virus is shaking up ingrained buying practices within China's electronics procurement community, and could force Web-shy purchasing executives there to rely more heavily on the Internet for their wares, according to ChinaECNet Ltd., the three-year-old Internet joint venture between Avnet Inc. and the China Ministry of Information Industries.
ChinaECNet says it has seen a sharp increase in service activity the last couple of months, as SARS (severe acute respiratory syndrome) has stopped almost all vendor visits to customers, said Wayne Chao, chairman and chief executive of the Web portal, Beijing.
SARS "is waking up Chinese procurement people to the use of the Internet. Right now the traditional way of person-to-person contact is not possible," he said.
Even major OEMs in China that are frequent users of Internet ordering and services must now rely on vendor Web presentations, training, and other service offerings to replace face-to-face meetings curtailed by SARS, Chao said.
Vendor Webcast seminars on ChinaECNet have jumped from one per month to six per month, which is as many as the site can handle, he said. The procurement Website is also conducting online training programs to replace vendor sessions previously conducted in person in China.
With the cancellation of most electronics industry exhibitions and trade shows in China because of SARS, chip suppliers are facing sharp limits on how to promote their products. ChinaECNet will try to fill this need when it presents an online exhibition in July with streaming video from vendor "electronic booths" through which they can show their wares to Chinese engineers and procurement personnel.
The Website will also play a role in the China Electronic Purchasing Association, now being formed. Chao, who will be vice chairman of the new group, said ChinaECNet will carry a monthly newsletter of the association to educate procurement officials on global marketing and pricing trends, supply chain management, and how to make greater use of the Internet.
"Many purchasing managers in smaller Chinese companies have little sense of the impact of major trends in the global supply chain. We hope to change that through the purchasing association and online newsletters," he said.
Chao said that increased revenue from its Internet services will help ChinaECNet offset the sales decline in online ordering caused by SARS-related market disruptions. The sudden drought of consumer purchases of PCs, mobile phones, and other electronic products has left Chinese manufacturers with bloated component inventories. In turn, there has been a decrease in online orders for parts through ChinaECNet.
But SARS has spurred an eight-fold increase in activity for one of its online buying methods -- a broker service that OEMs and component suppliers use to buy and sell small quantities of parts for a small fee, Chao said.
Also, the Website's Sample Express ordering service has not been seriously affected by the SARS-driven decline in online component purchases, he said. ChinaECNet has long handled small quantities of sample parts shipped to customers for evaluation and testing.
"Even in the midst of the SARS outbreak, OEMs and suppliers are still buying samples to continue their product development," Chao said. "When vendors are no longer visiting them in person to sell samples, ordering through ChinaECNet is even more critical."