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People call Merle Hinrichs (above) the grandfather of online B2B trade. "And that is not just because of my age," the 66-year-old quips. As Chairman and CEO of Global Sources, he has been blazing the global trail of trade since he published his first export trade magazine in February 1971, under the banner Asian Sources.

"We have always led the industry, in terms of technology, in terms of providing new areas of sourcing, in how we specialize our publications, Websites and trade shows," he said. "And, we've been copied by many, many companies over the decades."

Mr Hinrichs got the idea for Asian Sources after moving from his native USA to Asia in 1965 to try his luck shortly after graduating from Thunderbird, the American Graduate School of International Management, with a master's degree. He landed a job selling ads for trade journals in Hong Kong and Tokyo. Many of his clients were no-name companies seeking buyers and retailers in the U.S. and Europe, who were also trying to find suppliers. And so, Mr Hinrichs stepped in to fill the void.

As Global Sources prepares to celebrate its 35th anniversary next year, it has never wavered from its founding vision of "providing buyers worldwide with accurate, reliable information about suppliers and the products that they offer for export."

It may sound unassuming, but it has built up a global network of over 463,000 active buyers in 230 countries and territories. "We have always focused on the buying community. We believe we cannot be providing a service to the suppliers and manufacturers unless we are engaged in identifying who the buyers are, what products they want, what are the changes in buying trends, and what are buyers looking at and what do they need from Asia," he explained.

That is much easier said than done, as buyers' needs are in a state of constant flux. To crystalize these needs, Global Sources monitors buyers, source markets, as well as what they are looking for from suppliers. "So far we've been very accurate and responsive to their needs," he said.

The company invested heavily to establish Global Sources Online in October 1995 amidst widespread scepticism about this new, untested technology. By 1997, he was warning clients that unless they set up an email account, within two or three years time no one would want to do business with them.

"No one believed us. We were at the forefront of introducing this technology to traders, and now we are at the forefront of telephony services to customers," Mr Hinrichs said.

Rather than cannibalising the print side of the business, the online arm complemented it by allowing Global Sources to tailor its information to individual client's needs. "We love our print products, but just because we love it we are not married to print," he said. "It is all about giving buyers the information they require in the media they prefer."

Exhibition growth
Global Sources entered the trade show business 13 years ago. Limited exhibition space in Hong Kong had restricted its growth in this area, but with the opening of AsiaWorld-Expo next to the airport this month, Mr Hinrichs is confident the new facility will boost his exhibition business as well as the MICE industry here in general.

He has earmarked US$50 million to develop the China Sourcing Fairs, as well as bring in other shows from around the region, and is AsiaWorld-Expo's largest client. A number of shows Global Sources will be hosting at the facility will overlap existing ones, but the pulling power of Global Sources' fairs will be the all-new suppliers from Mainland and Greater China exhibiting in Hong Kong for the first time.

"Our shows will feature all-new companies, companies that are really focused on export. Visitors can rest assured that they will be able to find new products and suppliers," he said.

Rather than compete with TDC for visitors during concurrent shows, Mr Hinrichs said he has asked TDC to jointly promote certain shows and organize shuttle buses between the two venues, but "TDC has refused to give us any cooperation," he lamented.

"If the TDC really believes in private enterprise, it should leave the exhibition business to private enterprises and stop working with government subsidies," he said. "TDC is half pregnant. It competes with private enterprises. If the government is really serious about wanting to expand Hong Kong's exhibition business, then it needs to get TDC out of it. Then you will see an explosion of exhibitions and benefits to supporting businesses, from hotels, to retailers to exporters."

In 2004, 3.6 million tradeshow visitors came to Hong Kong, a 29% rise over the 2.8 million two years earlier. Mr Hinrichs believes Hong Kong has the potential to double that number, which will create enormous benefits to runoff industries like hotels, banks, restaurants and other sectors of the services economy. But to do so, he believes the government and TDC must sit back and let free enterprise take over.

China's potential
Mr Hinrichs said he is extremely bullish on China's potential, both as an exporter and consumer. The China Government has been ensuring that support facilities to the MICE industry are being put in place to capitalise on the industry's potential.

China's incredible annual growth rate of around 9% has been driving much of this demand, and even if it slows, as pundits predict, the exhibition sector still has room to double in size. In anticipation of this, the company opened on November 5 this year its new 9,000 sq. metre China headquarters in the Shenzhen International Chamber of Commerce Tower in Shenzhen's new central business district.

Despite criticisms from its trading partners, Mr Hinrichs says China's leadership has "demonstrated an incredible capacity to elect and select the right methodology of developing their trade and overseas commitments and relationships."

Even amid international pressure to revalue the renminbi, China has maintained a steady hand on the tiller. Although he agrees that the reminbi is being kept artificially low to maintain growth of China's exports, China is managing its revaluation skilfully.

"In my view, Chinese management of this is pretty adept, they are doing a phenomenal job. I think the history of the yen has not been lost on the Chinese planners," he said.

China's careful planning and resilience presents exception opportunities for Hong Kong given our position.

"That we need in Hong Kong is leadership and vision, and given that we really focus on what will differentiate our economy and its value to China will determine the success we will have," he said.

Company: Global Sources
Established: 1971
Year joined HKGCC: 1991
Web site: www.globalsources.com
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