Li&Fung: The storied Hong Kong Trading house in mid 2000 announced a product design website called Studiodirect.com for launch in 2001 to facilitate sourcing for weatern firms in Asia. Like Alibaba,Studiodirect.com targeted SMEs. Manufacturing economies of scale had previously barred most SMEs from ordering through Li&Fung. However,the Internet allowed easy aggregation of the smaller batch orders from SMEs and significantly reduced the transaction costs of doing so. StudioDirect.com also promised better service at lower prices-charging SMEs a 10-15% commission,far less than industry practice.