(Yicai Global) March 10 -- Once one of the top online retailers in China, Newegg plans to refocus its business-to-consumer operations back to the US and beyond, where it sees greater opportunities.

The California-based online electronics retailer will close its Chinese B2C business and instead concentrate on selling products made in China on its US e-commerce platform, Newegg China Chief Executive Zou Guoqing told Yicai Global.

Set up in 2004, Newegg China had CNY1.37 billion (USD197 million) in B2C sales in 2010, coming in fourth behind e-retail giants JD.Com, Dangdang and Amazon China. But as competition intensified and with frequent changes in its top management, the firm gradually lost its edge and fell out of the top 10 online retailers.

Newegg's US platform, on the other hand, has more than 40 million active users. By leveraging its wide network of Chinese suppliers and interacting directly with them, Newegg will have a price advantage over other US e-commerce platforms such as Amazon, which sell a lot of made-in-China products.

The company has adjusted its entire organizational structure to change into an international platform, Zou said. It has opened six warehouses in the US and other countries, and has also built a 1 million-square-foot intelligent logistics warehousing center and an automatic delivery system.

Unique Model

The firm's new business model will not limit its relationship with Chinese merchants to just sales and procurement, Zou said. It will not rely on commission as its main form of revenue and does not plan to charge commission on top-selling products. Rather, the firm will levy fees on those vendors who use Newegg's logistics, warehousing, payment and other services.

"As long as Newegg's basic costs can be covered, we want sellers to do well," said Zou. "The more they sell and the more they earn, the more the platform's gross merchandise volume will expand."

Newegg has a monopoly on personal computer-related products on the platform, which account for 80 percent of its directly sold goods. Third parties are permitted to sell only non-PC-related products, Zou said.

The firm will also introduce livestreaming on its US platform to promote sales, a retail model that has been successful in China, he added.

China-Based Support

Newegg has a team of more than 600 people in China dedicated to investment, merchant support and technology development, Zou said. Their main task is to connect with Chinese export-oriented businesses, he added. They also supply technological services to other Chinese cross-border e-commerce firms.

Overseas online sales are experiencing a short-term impact due to the Covid-19 virus outbreak, said Zhang Zhouping, director of the Business-to-Business and Cross-Border E-Commerce Department at e-commerce research center 100EC. This is mainly reflected in operational difficulties for small and medium-sized sellers, slower delivery times and a drop in confidence among foreign buyers, Zhang added.

At present, the impact on logistics is partial, Zou said. Newegg is actively helping Chinese vendors to solve logistical issues and is also considering offering a discount for deliveries to Chinese merchants to help ease pressure on their bottom lines, he added.

Editors: Liao Shumin, Chen Juan, Kim Taylor