E-Commerce In ChinaE-Commerce In China

Liang Chen & Xu LiLiang Chen & Xu Li

Definition of E-Commerce1. Too Generalized Definition

2. Too Restrictive Definition

3. Definition in between

Reasons of E-Commerce Development

1. Development of IT Industry in China

2. China’s Entry into WTO

IT Industry In China

20% GDP in 1998

Fuel current economic growth

Set solid foundation for development of E-C

China’s WTO Entry

1. Its commitment to liberalization in the telecommunication and financial service sectors

2. Open market to foreign investment

3. Create competitive environment

Two Models

B2B(earlier development)

B2C(wide range of goods)

Two Aspects

1. Avoid the overly aggressive investment

2. Be prepared to follow the wave

Development Prerequisites Online Population (103 million by 2005 up

from 87m in 2003)

Estimated 7m credit card holders in China

The population of PC users

Information Structure (ISP cost & service quality)

Development in E-commerce1. In March 6, 1998, first online sale

2. In the early 1990s, adoption of EDI

3. Golden Bridge & Golden Card Project

4. (Infant Stage) 1999-2001

5. Robust development in 2005

Statistics

1. Value of online transaction

350 bn in 2004 to 553 bn in 2005

2. 95% of the market was B2B

3. Up 37.1% year-on-year

4. Number of items online exceeds 60m

Limitations

E-commerce in its infancy stage Transactions representing 0.87% of GDP

Constraints

High internet access cost Lack of a nationwide credit card system Slow and uncertainty delivery Lax network security Government interference

Low speed and high cost online access

Service charges for renting frequency bands of sufficient width for websites high

Access charges high: 10% of monthly income

Payment online

The share of online payments remaining below 50%

Banking services expensive and inefficient Banks imposing restrictions on e-payments Average fees equal to 5%--10% of each

credit-card transaction

Problems in the realm of supply and delivery system

Traditional labor-intensive delivery system Weak logistic system

Online security

Companies’ worrying about the e-business system from hackers

Commercial credibility: counterfeit and low-quality products

Figures: 20%, 40%, 80%

Government interference

Censorship Strict control of internet

Government’s Role1. Provide more efficient high-

level guidance

2. Create a better environment

3. Issue appropriate laws and regulations

Resolutions of Chinese Government

1. inter-departmental responsibility coordination should be emphasized

2. Strengthen the capital support policy

3. Relax constraints4. Continue its reform of

intellectual property right

References

China's E-Commerce Development,Jiacheng HE,perspectives, Vol. 2, No. 2

E-Commerce In China,John WONG & NAH Seok Ling Is E-Commerce ready for China? By Keith Regan,E-Commerce Times , China E-Commerce 2000 conference http://www.ultrachina http://www.scmp.com(South china Morning Post) http://www.ecommercetimes.com www.sina.com www.yahoo.com www.alibaba.com

Thank you

谢谢！