Speaking fluent Mandarin, American Craig Pepples has become a China expert. During his 25-year career, he has spent 90 percent of his time in China and has taken up various positions at Global Sources including trade magazine editor and country manager for China. Today, he is Chief Operating Officer. He said: "I'm grateful for the time I have lived in China. I have witnessed the rise and economic development of China on the world stage."

We met Pepples at the China Sourcing Fair: Electronics & Components at AsiaWorld-Expo, Hong Kong on April 12.

We asked him: "Do you like people to regard Global Sources as a US or China company?"

He replied: "We are an US NASDAQ-listed company, but our home is in Asia. Because we are a US company, we understand the minds of international buyers. And because our roots are in Asia, we know how to work with suppliers. Now, 60 percent of our revenue comes from the mainland China and 90 percent comes from Greater China, including mainland China, Taiwan and Hong Kong. Our Asia-Pacific headquarter is in Hong Kong and our China headquarter is in Shenzhen. We have offices in 44 locations across China. Our roots are indeed in China."

Pepples' Chinese teacher at Yale University gave him a Chinese name 25 years ago, which literally means ‘work hard to achieve success." Fascinated by Oriental culture, Pepples focused on his Chinese studies. But he never expected to be part of the Global Sources' success story.

Pepples revealed that, during his 25-year career, 22 years have been spent in and around China. "I only worked in the US for one summer," he said. After he graduated 25 years ago, Pepples worked for a few months and was then relocated to Asia. He was stationed in Taiwan and then Hong Kong and Shanghai, with 3 years in the Philippines in between.

Pepples worked as an editor, sales account executive and moved progressively to his current position as Chief Operating Officer. It can be said that Global Sources has made Pepples what he is today. On the other hand, while Merle A. Hinrichs, co-founder, Chairman and CEO of Global Sources, is the key person behind the company's success, Pepples has made a significant contribution as well.

Global Sources is a leading business-to-business media company that provides various sourcing channels including websites, trade shows and monthly magazines to facilitate trade with Greater China. It's now one of the largest B2B enterprises in Asia.

When asked by journalists to describe what Global Sources is and what it does, Pepples said: We are the "source of successful international trade", "source of quality buyers", "37 years facilitator of two-way Greater China trade" and "top specialized trade show organizer for Greater China suppliers".

Pepples summarized: "Global Sources blends together the business wisdoms of the East and the West. That's why we are so successful."

Keep focused: Do what you do best

Global Sources has developed its business with a focused positioning - facilitating global trade by providing a platform for buyers and suppliers. This role has not changed from the launch of its first trade magazines, to the launch of Asia's first B2B website and, in recent years, organizing Asia's most specialized trade shows.

Alibaba has expanded its business from B2B to the B2C (business-to-consumer) and even C2C (consumer-to-consumer) sectors. But Global Sources is not following suit. It will continue to focus on its B2B platform for mid-range to high-end users.

"80/20" Rule: the Key Minority

Global Sources is specialized in serving the buyers, particularly the top buyers. In fact it's the first B2B website to develop an online buyer community. Pepples believes in the "80/20 rule" - 80 percent of global sourcing volume comes from 20 percent of buyers. That means those who grab the minority top buyers in the market gain the upper hand.

That's why Global Sources holds Private Sourcing Events at each Fair, pre-screening qualified suppliers to meet face-to-face with the top buyers.

Many top international buyers of electronics products are long term partners of Global Sources. Agentrics, for example, is Global Sources' sourcing partner serving 17 of the world's top 30 retailers.

Like Antaeus: Sticking Feet to Mother Earth

The myth of Antaeus and Mother Earth is well-known to Westerners. It symbolizes the fact that in order to thrive, enterprises need to stand on their feet, accumulate wealth, stress development, sustainability and avoid hasty, adventurous moves.

When Pepples started his career as a trade magazine editor, he had to pay door-to-door visits to the mainland China suppliers to verify the information in their advertisements. Suppliers were very resistant to these types of visits at first, but Global Sources insisted and prevailed. Now, suppliers must be visited at least 3 times before their ads are listed on Global Sources' website or magazines. The complete "verified supplier" screening process is even more stringent: suppliers are ranked from one-stars to six-stars.

Raising the Threshold: Putting Quality Before Quantity

It's been reported that Global Sources' ad prices are 1.5 to 3 times higher than its major competitors. To list ads, customers have to pay fees one year in advance. And Global Sources' ad fees are among the highest in the industry. Unlike its competitors that offer low priced, even free-of-charge memberships to users in order to generate high numbers in a short period, Global Sources highlights quality rather than quantity.

Pepples thinks that raising threshold not only filters out the unqualified suppliers, but attracts good suppliers. It also saves the buyers a great deal of time, money and efforts in finding qualified suppliers.

"Falling in Love Before Marriage"

In 2005, Global Sources formed a strategic alliance with another China B2B website, HC International ("HC") and bought 10 percent of HC's shares from IDG Technology Venture Investment III, L.P. ("IDG"), with an option to increasing the stake up to 40 percent in half a year. However, after that half-year had passed, Global Sources opted not to raise the stakes as planned. On the contrary, the partnership was terminated in November 2007 and IDG bought back the HC shares. The two companies, having "fell in love" for more than a year, did not "get married". Instead, they "broke up peacefully". This illustrates how prudent Global Sources is in its development strategies. Global Sources launched its own website for trade within China shortly after it pulled out of the HC deal.

Pepples on Doing Business: Learn from Your Competitors

Pepples said: "When an enterprise says ‘I see no competitors', danger looms. In a market economy, not only do we need to focus on customers and what they need, we must learn from our competitors as well."

On the Airport Express Trains from Hong Kong Island, our journalists found Alibaba's ads on the back of every seat. On the other hand, Global Sources' ads show up on every window of the trains. The two companies are locked in a fierce competition and obviously Alibaba is targeting those who visit Global Sources' exhibitions.

What does Pepples think of Alibaba's "all-out" strategy? He believes Global Sources' trade shows have attracted so many quality buyers and supplies that its competitor can't afford not to do something to draw their attention. "Therefore, we're not scared, but proud of it!" he said.

"Always Curious About Things"

When asked "who is the entrepreneur that you respect most?" Pepples replied: my boss, Merle A. Hinrichs. Pepples explained what's so special about Hinrichs is his attention to detail, curiosity about things and determination to find truth. When visiting clients, for instance, he always asks them a lot of questions to understand how their business is doing and what kind of problems and challenges they are facing. Then, along with them, he works out ways to solve these problems. Meanwhile, when handling important issues, he always asks and cross-checks with different parties before making decisions.

"Working with Choosy Big Clients"

When asked "what advice do you have for the China suppliers?" he said: they should focus on learning. And training is important to keep the staff in step with the times. They should also invest in improving services to become more competitive. Nowadays, price undercutting no longer works to beat your competitors. Suppliers need to innovate, add value to their products and win clients with quality services.

China suppliers should be keen to learn from top buyers. It takes up to a year to land a top buyer. From dealing with this buyer, they will get the chance to improve. Even if they don't make money from it, they will benefit one way or another in future. There have been so many such cases.