Does the "80/20" rule apply or the "Long-tail theory" (small, scattered deals making up a large transaction volume) prevail? The difference of these two concepts signals the battle between B2B industry's two major players: Global Sources and Alibaba.

The US Customs has recently released figures that support Global Sources' assertion.

The figures show that among the 450,000 U.S. importers that imported more than one time in 2008, sixty thousands (60,000) importers account for 75% of all U.S. imports by both value and volume. A more convincing figure was that the top 3,000 importers accounted for 67% of all imports into the U.S. by volume and value in 2008. These figures tend to support Global Sources' claims that "a small group of buyers control the vast majority of market share" and that "exporters should not waste their time and energy influencing those without real buying power".

Though both are B2B companies, the U.S. company Global Sources and the local Alibaba differ greatly in terms of the promotion strategies, services provided and even the corporate spirit: Global Sources is focused on mid-range to high-end suppliers. The company operates both online and offline businesses, including websites, magazines, trades shows and research reports, and sticks to the way of charging higher prices. Alibaba, on the other hand, is more appeal to the mass, lower-end suppliers; focuses on the online business and stick to a lower pricing.

In booming times, B2B companies with different views can "operate" on their own ways. However, as the financial crisis ravages and China's export falls sharply, the "peace" between these players has vanished. Alibaba played the low price trick again in 2008. They launched new packages with the service fees as low as 19,800 Yuan. In response, Global Sources launched the entry-level packages with the price of 40,000 Yuan a year. But Global Sources still takes the higher pricing stance with their normal business. A four-star client, for example, pays 400,000 – 600,000 Yuan a year. In fact, Global Sources accused Alibaba's move to lower prices as a disruption to the market.

The battle between these two ideologies also weights on the export strategies for the China suppliers. Most China suppliers are small to medium-sized companies, so it looks like they should apply the "Long Tail Theory" to their business model – they need to find buyers and meet their requirements quickly, while the B2B platforms need to lower the entry level and attract as many suppliers as possible.

Isn't this a great opportunity for Alibaba to grab more clients? No wonder it has set a goal of 40 million suppliers. However, in mid-2008, it has only 368,000 paid users. It's said that Alibaba's move of cutting price has gained support from many local governments, which are subsiding SME suppliers to join Alibaba's platform in a bid to ease pressure of the decreasing export orders.

But the results of Abibaba's low price strategy and low entry-level tactic are undesirable. The already crowded export channels are now full of low quality, unqualified suppliers, making Alibaba "a platform for small suppliers with low risk resistant capacity". This makes the costs of communications between buyers and suppliers much higher and efficiency much lower.

Global Sources' strategy, on the other hand, implies that when the "cake" has become smaller, price will be an effective "screening tool". Only the "strong" suppliers survive. It's like that, in times of economic crisis, companies choose to lay-off staff instead of cutting salaries. When companies cut salaries at a standard rate, those smart employees are "getting more hurts". As a result, these smart employees will leave while the unqualified employees stay, furthering deteriorating the working efficiency of the companies. Therefore a more justified measure will be to lay off unqualified employees, while avoid cutting salaries of the smarts ones. This is basic wage knowledge.

Chief Executive China magazine conducted a poll to gauge China enterprises' primary strategic responses to the current global economic crisis between Jan. 22 and Feb. 29, with more than 8,900 respondents. Interestingly, only 21% indicated they will cut costs, while 22% plan to increase efficiency and product quality. And 21% said they will build their own brands.

According to the Importer Survey conducted by Global Sources, although 43% of the surveyed buyers indicated that they will the total value of imports from China in 2009, 40% of the buyers still said they will increase the import value from China. We believe that the mature markets are still determining the "fate" for China exporters this year. And this small group of volume buyers will be more stringent when selecting the suppliers they work with – China suppliers have no choice but to choose the right concept in order to survive.