Recently, due to tariffs, China’s well-established cross-border e-commerce website DHgate has suddenly become popular in multiple countries and regions around the world, including the United States. Today we will share with you DHgate’s unique entrepreneurial journey, innovative business model, and outstanding market influence.
Background and Origin of Entrepreneurship
In 2004, the Internet was just emerging in China, and the e-commerce field is still in its infancy. Diane Wang（王树彤）, a highly influential figure in the development of e-commerce in China, has realized the enormous potential contained in the field of cross-border e-commerce with his keen market insight and forward-looking strategic vision. Previously, Diane Wang（王树彤） had accumulated rich work experience in well-known companies such as Microsoft and Cisco. In 1999, she participated in the establishment of Excellence Network and served as its first CEO, accumulating valuable practical experience in the field of e-commerce. However, she was not satisfied with this and always carried a bigger dream in her heart – to build an online trading platform that can connect Chinese small and medium-sized enterprises with the global market.
At that time, China’s small and medium-sized enterprises faced many development difficulties. On the one hand, there are numerous global trade barriers, and the traditional international trade model is cumbersome and costly, making it difficult for small and medium-sized enterprises to afford. This greatly reduces their competitiveness in the international market and makes it difficult for them to expand overseas business. On the other hand, although the rapid development of Internet technology has brought new opportunities for business activities, there is not yet a mature platform that can make full use of this technology to help SMEs break the geographical restrictions and directly connect with global buyers.
Against this backdrop, Diane Wang（王树彤） resolutely embarked on the path of entrepreneurship and founded DHgate in Beijing in 2004. The original intention is to create a new international trade channel, allowing Chinese small and medium-sized enterprises to more conveniently and efficiently promote their products to the global market through this platform, realizing the vision of “buying globally and selling globally”, and opening a new era of cross-border e-commerce.
Key milestones in the development process
Establishing the “Pay for Success” model and laying the foundation for development
Since its inception, DHgate has demonstrated a unique spirit of innovation, pioneering an online trading model of “paying for success”. This model is a breakthrough. It abandons the practice of charging registration fees on traditional platforms and only charges a certain percentage of commission after successful transactions between buyers and sellers. The advantages of this model are obvious, as it greatly reduces the entry threshold for small and medium-sized enterprises to connect with the international market, giving hope to those enterprises that were previously hesitant about cross-border e-commerce due to limited funds. Many small and medium-sized enterprises have settled in DHgate, embarking on their cross-border e-commerce journey. As a result, DHgate has quickly attracted a large number of users, laying a solid foundation for the platform’s development.
The transaction volume continues to rise, demonstrating the platform’s strength
2007 was a milestone year for DHgate, with the platform’s cumulative total commodity transactions exceeding $10 million. The achievement of this result not only proves the feasibility of the “pay for success” model, but also marks DHgate’s emergence in the field of cross-border e-commerce. Afterwards, DHgate’s development momentum became increasingly strong, and in 2010, the cumulative total commodity trading volume successfully exceeded the $100 million mark. This significant growth highlights the increasing attractiveness of DHgate in the global market, with more and more buyers and sellers choosing to transact on this platform, and the scale effect of the platform gradually becoming apparent.
Launch multiple services to improve the platform ecosystem
With the continuous expansion of its business, DHgate understands that in order to stand undefeated in the fierce market competition, it must constantly improve its service system and provide users with a more comprehensive and convenient trading experience. In 2010, DHgate launched its own payment service DHpay, which effectively solved the payment difficulties in cross-border transactions and provided a safer and more convenient payment method for both buyers and sellers, further enhancing the user’s transaction experience. In 2011, DHgate followed the trend of mobile Internet development and launched the first cross-border e-commerce mobile application, enabling users to trade anytime and anywhere, breaking the time and space constraints and greatly improving the flexibility and convenience of transactions. In 2014, in order to solve the problems of long delivery cycles, high costs, and opaque information in cross-border logistics, DHgate launched the cross-border logistics service DHlink. By integrating logistics resources and optimizing logistics distribution processes, it provided users with more efficient and reliable logistics solutions, further improving the platform’s ecosystem.
International expansion and cooperation to enhance global influence
In 2015, DHgate took an important step in international expansion by initiating and facilitating China’s first bilateral cross-border e-commerce cooperation – the “China Turkey Cross border E-commerce Cooperation Agreement”, which was signed in the presence of the top leaders of both countries. This cooperation has far-reaching strategic significance, not only building a bridge for cross-border e-commerce trade between China and Türkiye, but also providing an opportunity for DHgate to further expand its overseas market. Afterwards, DHgate actively cooperated with multiple countries and regions around the world to promote the development of cross-border e-commerce on a global scale. In 2016, DHgate facilitated the signing of the Memorandum of Understanding on Cross border E-commerce Cooperation between China and Peru, further strengthening trade relations with South American countries. Through these international collaborations, DHgate’s global influence continues to increase, becoming an important cross-border e-commerce platform connecting China and the world.
Upgrade to a group and build a dual engine driven strategic architecture
In 2022, DHgate entered another important stage of development as the company announced its official upgrade to DHgate Group. This upgrade is based on the core business engines of the centralized cross-border e-commerce platform DHgate and the decentralized social e-commerce platform MyyShop, forming a dual engine driven strategic architecture. The intelligent logistics platform DHlink and financial payment service DHlink, as the service sectors supporting the development of Shuangqing, provide strong support for the platform’s development. The construction of this strategic architecture marks a more complete layout of DHgate Group in the field of cross-border e-commerce, which can better adapt to market changes, meet the needs of different users, and lay a solid foundation for future development.
Innovation and Characteristics of Business Models
Accurately positioning the small-scale B2B track
DHgate precisely positions itself in the small B2B market, focusing on providing one-stop trade and services for global small and medium-sized retailers. Compared with traditional large-scale B2B trade, small-scale B2B trade has the characteristics of smaller order amounts, higher transaction frequencies, and a variety of product types. This model can better meet the needs of global small and medium-sized retailers for product diversification and procurement flexibility, while also providing more trade opportunities for Chinese small and medium-sized enterprises. By focusing on the small-scale B2B market, DHgate has found its unique positioning in the fiercely competitive cross-border e-commerce market, forming a differentiated competitive advantage.
Empowering small and medium-sized enterprises throughout the entire chain
DHgate is well aware of the various difficulties and challenges faced by small and medium-sized enterprises in cross-border e-commerce operations, and is therefore committed to providing comprehensive empowerment services for small and micro enterprises in the cross-border e-commerce industry chain. In terms of store operation, DHgate provides sellers with a simple and easy-to-use store management system, helping them easily build and manage their own stores, including functions such as product listing, store decoration, and order management. In terms of traffic marketing, DHgate provides traffic support to sellers through various channels, such as search engine optimization (SEO), social media promotion, platform internal advertising, etc., to help sellers increase the exposure and traffic of their stores. In terms of warehousing and logistics, DHgate integrates global logistics resources and provides sellers with various logistics solutions, including domestic direct delivery, pre warehouse, overseas warehouse, etc., helping sellers reduce logistics costs and improve logistics efficiency. In terms of payment finance, DHgate’s proprietary payment service DHpay and the financial technology services provided by Tuotuo Shuke provide sellers with secure and convenient payment methods and financing channels, solving their financial problems in cross-border transactions. In terms of customer service risk control, DHgate has a professional customer service team and risk control system, providing timely and effective customer service support for both buyers and sellers, while ensuring the safety and fairness of transactions. Through these full chain empowerment services, DHgate helps small and medium-sized enterprises reduce the threshold and cost of cross-border e-commerce operations, improve operational efficiency and competitiveness.
Integrate global supply chain resources
After years of development, DHgate has gained a strong advantage in the Chinese supply chain and established long-term stable cooperative relationships with numerous high-quality Chinese suppliers. The average annual number of online products on the platform exceeds 34 million, covering multiple categories such as clothing, 3C products, home furnishings, beauty, and maternal and child products. The rich variety of products can meet the diverse purchasing needs of global buyers. Meanwhile, DHgate has established a comprehensive logistics distribution system by integrating global logistics resources, with over 100 logistics routes and more than 10 overseas warehouses, providing efficient and reliable logistics services for buyers worldwide. In addition, DHgate also collaborates with multiple financial institutions to provide secure and convenient payment solutions for both buyers and sellers. By integrating global supply chain resources, DHgate has created an efficient and collaborative cross-border e-commerce ecosystem, providing users with a high-quality trading experience.
Success Stories and Impact
Numerous small and medium-sized enterprises leverage platforms to achieve rapid growth
In the development process of DHgate, many successful cases have emerged. For example, a regular college English major graduate accidentally learned about DHgate and, inspired by his entrepreneurial dream, resolutely entered the field of cross-border e-commerce. With the support of DHgate, he achieved sales of $500000 in just one year, growing from an ordinary graduate to a leader in the lighting industry. Another traditional merchant with 44 stores in Beijing and over a decade of offline sales experience has successfully transformed into e-commerce through DHgate. After only three days of joining the platform, a $937 order was successfully completed, opening a new chapter in online business. These cases are just the tip of the iceberg among DHgate’s many success stories. With the help of DHgate, countless small and medium-sized enterprises have successfully expanded their overseas markets, achieved rapid business growth and transformation upgrades.
Promote the development of China’s cross-border e-commerce industry
As a pioneer and leader in China’s cross-border e-commerce industry, DHgate has had a profound impact on the development of the entire industry. Firstly, DHgate’s “pay for success” model and small-scale B2B business model have provided valuable reference experience for newcomers, promoting innovation and development of the entire cross-border e-commerce industry’s business model. Secondly, DHgate continuously improves its service system, enhances user experience, and encourages other cross-border e-commerce platforms to follow suit, thereby promoting the overall improvement of the industry’s service level. In addition, DHgate’s active exploration and practice in international cooperation, supply chain integration, technological innovation, etc. have also won the reputation of China’s cross-border e-commerce industry globally and enhanced its international competitiveness.
Promote interconnectivity in global trade
The emergence of DHgate has broken the geographical restrictions and information asymmetry of traditional international trade, allowing global buyers to more conveniently purchase high-quality goods from China, and also enabling Chinese small and medium-sized enterprises to sell their products to every corner of the world. Through the DHgate platform, the interconnectivity of global trade has been further strengthened, promoting the optimal allocation of global resources and the common development of the economy. For example, some buyers from regions such as Africa and South America have purchased high-quality and affordable Chinese products through DHgate, meeting the demands of the local market; And some small and medium-sized enterprises in China have also exported their products to these regions through DHgate, expanding new market space. DHgate has played an important role as a bridge and link in promoting global trade connectivity.