Announces Slight Quarterly Growth Figures

Chinese B2B e-commerce website company announced its financial results for the quarter ended March 31, 2008 and said total revenue increased to RMB680.1 million, an increase of 53.2% year-on-year and 7.2% quarter-on-quarter.

"We achieved solid growth in revenue and profitability in the first quarter," said David Wei, CEO of "During the quarter, we restructured our Gold Supplier sales force into two teams focusing on customer acquisition and customer retention, respectively. We believe that in the long run the new structure will lead to higher levels of customer satisfaction and sales productivity. Looking ahead, the restructuring of our sales force will continue to go through an adjustment period in the second quarter." says it had 327,118 paying members as of March 31, 2008, representing a 35.6% increase from the first quarter of 2007 and a 7.1% increase from the fourth quarter of 2007. Its international marketplace had 28,548 Gold Supplier members, a net increase of 8,484 from 20,064 as of March 31, 2007 and a net increase of 1,164 from 27,384 at the end of 2007.

Revenue from its international marketplace was RMB464.2 million in the first quarter of 2008, an increase of 42.9% year-on-year and 4.3% quarter-on-quarter, accounting for 68.3% of total revenue.

"The credit crisis and slowing US economy is creating pressures on the global trade environment. Nevertheless, buyer activity on our international marketplace continued to increase during the period," said Wei. "We are actively monitoring the situation and will take proactive steps to minimize the potential impact from any downturn of the US economy by continuing to develop our fast growing China marketplace, focusing on industries and regions less likely to be affected and increasing our geographic expansion. We believe that with our management focus on rolling out these new initiatives, we are well positioned to meet the challenges ahead and will continue to deliver good results."

Gross profit for the first quarter of 2008 was RMB601.2 million, an increase of 55.5% year-on-year and 8.6% quarter-on-quarter. Our gross margin improved to 88.4% in the period, compared to 87.1% in the same period last year and 87.3% in the fourth quarter of 2007.

Total operating expenses were RMB310.5 million in the first quarter, representing a 44.8% increase year-on-year and a 16.1% decrease quarter-on-quarter. Profit from operations for the first quarter of 2008 was RMB311.9 million, an increase of 81.0% from the first quarter of 2007 and 67.1% from the fourth quarter of 2007.

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