As indicated by Vicky Han, the credit trade mode would effectively boost Chinese enterprises’ trade volume and competitive strength
Beijing, January 20, 2010----Ms. Vicky Han, General Sales Manager of Sinotrust Business Information & Consulting Services, was interviewed by the journalist from the “Front Cover Figure” of the leading foreign trade magazine- Imp-Exp Executive for such topics as the importance of enterprise credit risk management under financial crisis, the importance of credit risk management for the enterprise operation, the way to establish enterprise credit risk management system and the way to evaluate the buyer’s credit risks.
As pointed out by her, the concept of “Credit Risk” was born in the western countries over 100 years ago. The credit management came with the credit sale. However, in China, it just emerged with the entry of foreign-funded enterprises. In 1992, Sinotrust, the first Chinese company specialized in credit management, was established. Since then, the credit management had its model with Chinese characteristics. In the past 17 years, Sinotrust has cultivated the professional credit management talents for the market as well as conducted the inhouse training for a lot of famous domestic and foreign companies.
Credit transaction (credit sale) has been universally used by the enterprise to stimulate the sales. Therefore, in the course of transaction, the buyer credit information collection and risk evaluation are highly concerned by the enterprises. In this case, the relatively standard mode shall be adopted to evaluate the buyer’s credit risk. Such standard mode is called by Sinotrust as “Credit Risks Evaluation Model”. The buyer information is collected on a regular basis so as to calculate out the credit risk level for each buyer through the “Credit Risks Evaluation Model”. For the buyer with low credit risk, the amount of credit sale could be increased and the time limit for repayment could be extended, and vice versa.
In the western countries, 90% business is carried out via the credit method, while only less than 10% business adopts the cash settlement, so that the credit settlement accounts for the majority. However, in China, due to the lack and deficiency of enterprise credit, the transaction via credit sale only accounts for around 20%, while the cash settlement reaches 80%. In this case, the backward way of settlement will seriously hinder the business expansion and enterprise growth, so as to heavily weaken Chinese enterprise competitiveness.
As indicated by Vicky Han, with the further globalization of economy, Chinese enterprises rivaled their foreign counterparts at the same competitive environment, but the foreign enterprise with the same size thereof had the credit sale capability which is 4 times of that owned by Chinese enterprise. Thus, Chinese enterprises should substantially increase the proportion of credit sale so as to compete with their foreign counterparts. In this sense, the enterprise credit management should be firstly enhanced before increase of the proportion of credit sale.
As per the statistic analysis, the effective credit evaluation could fight against 70% credit risks, therefore the credit evaluation is very meaningful to control the credit risks and reduce the bad debts.
About Sinotrust Business Information & Consulting Services
Sinotrust is a leading supplier of business information & consulting services. We provide company credit reports, database products, industry information and database technology services, and help you make informed decisions in credit management, marketing and sales development, industry analysis and competitor monitoring.
About Sinotrust
Sinotrust is a leading supplier of marketing solutions and credit solutions in China. We collect, analyze and manage information about markets, consumers and businesses to provide marketing research, business information, consulting and database marketing services through integration of information, services and technology. Our products and services help you make better marketing and credit decisions and develop profitable customer relationships.
Over 80% of the Fortune 500 companies operating in China are using different products and services of ours. We employ about 1,000 people in our offices in Beijing, Shanghai and Guangzhou, supporting organization clients from automotive, financial services, insurance, retail, telecommunications, IT, manufacturing, consumer products and trade sectors.
At the beginning of 2007, Experian, the global leader in providing information, analytical and marketing services, made a strategic investment in Sinotrust with both capital and know-how. The investment will greatly improve our service capabilities.
Media Contact:
Sophia LIU
Press Relations Executive, Sinotrust-Marcom
Tel: 8610-5926 7722
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