E-Commerce In China Liang Chen & Xu Li

Definition of E-Commerce 1. 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-commerce 1. In March 6, 1998, first online sale 2. In the early 1990s, adoption of EDI 3. Golden Bridge & Golden Card Project 4. (Infant Stage) Robust development in 2005

Statistics 1. Value of online transaction 350 bn in 2004 to 553 bn in % 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 Role 1. Provide more efficient high-level guidance 2. Create a better environment 3. Issue appropriate laws and regulations

Resolutions of Chinese Government  inter-departmental responsibility coordination should be emphasized  Strengthen the capital support policy  Relax constraints  Continue its reform of intellectual property right

References  China's E-Commerce Development,Jiacheng HE,perspectives, Vol. 2, No. 2 China's E-Commerce Developmentperspectives, Vol. 2, No. 2  E-Commerce In China, John WONG & NAH Seok Ling E-Commerce In China  Is E-Commerce ready for China? By Keith Regan,E-Commerce Times, Is E-Commerce ready for China?  China E-Commerce 2000 conferenceChina E-Commerce 2000 conference   china Morning Post)    

Thank you  谢谢！