Saturday, November 11, 2006

e-Commerce in China: numbers and trends

China could become the world's biggest online market within two years: the number of Chinese netizens has surpassed 123 million and number of people with access to broadband connection rose by 45.3 percent during the first half of the year to 77 million. Studies show that a typical Chinese consumer spends an average of 17.9 hours per month (36 min./day) engaged in popular online activities such as chatting, blogging, gaming, and shopping.

If foreign businesses want to get in on the action in China, though, they should learn to speak the language. Eighty-five percent spend their time viewing mainland Chinese-language content, while only three percent viewed overseas foreign language content. "The Internet industry is attached to content," said Professor Guo Liang of the Beijing-based Chinese Academy of Social Sciences, refering to the 18th Statistical Survey Report on the Internet Development in China.

UPDATE: I'm moving this blog to http://designative.info


China reports a total of 694,000 websites, over 20% being individual's. The number of domain names surged 40 percent to reach 2,592,000, according to the report on China's Internet information and resources 2005 published by the State Council Informatization Office.

E-commerce has been slow to develop in China, though, for several reasons including low penetration rates of credit cards, consumer trust issues, and poor logistics and distribution channels. Eager to tap into China's consumer revolution, both Chinese and foreign companies like China Mobile, DHL and UPS have invested the money and time needed to address these issues.

The efforts have paid off. Chinese consumers now flock to online shopping sites like Amazon's subsidiary Joyo and competitor Dangdang, which recently raised $30 million USD from venture capital firms Doll Capital Management and Walden International. Joyo alone is expanding services from book selling to include electronics and other products and is becoming a de facto online shopping bazaar. The number of goods offered on Joyo's website have increased from 45,000 to 450,000 in the past 2 years.

Joyo's rise mirrors the growth numbers of e-commerce in China. An estimated 2.08 million Chinese bought products and services online in 2001. In 2006, the number of Chinese consumers making orders online will rise to over 20 million according to estimates by the China Market Research Group CMR. This year two in three people are expected to buy online, with books and computer gear proving particularly popular.

Other mind boggling statistics reflect the growth in all areas of e-commerce: in 2004, the entire Chinese Auction market was about $561 million; in 2005 that number jumped 200% and reached $1.7 billion, with Taobao being the strong player. According to Alibaba.com CEO Jack Ma, Taobao will dominate China online auctions, going head on against eBay.

If such momentum of growth continues, China's on-line transactions are expected to reach one trillion yuan this year (something around 89 billion dollars), a sharp rise from last year's 700 billion yuan."It means China is ready for a boom in e-commerce," said Chi Congbing, analyst with CCID Consulting.
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Sunday, November 05, 2006

China: Technology, Innovation and the Environment

Since the beginning of its economical opening -- when the first 5-year plans were devised in 1979 -- China has being growing at an incredible speed, with its GNP numbers jumping from 44 billion dollars to 1.6 trillion dollars in just 20 years.

Such growth has pushed the Chinese manufacturing industry into devouring huge amounts of natural resources in a alarming way: in 2004, China -- the 8th largest economy in GNP scale -- consumed 8% of all the oil, 31% of all the coal, 10% of all the electricity, 30% of all ore, 30% of all steel, 19% of all aluminum, 20% of all the copper and 40% of all cement produced in the world.

Adding such demand for natural resources to low efficiency means of production (the power-generation, steel and chemical industry in China spends 40% more energy in comparison to developed countries) and we get one of the most polluting countries in the planet: according to the World Bank, 6 out of the 10 the most polluted cities in the planet are in China.

UPDATE: I'm moving this blog to http://designative.info


Worries about the quality of life of its people -- as well as with its the capacity of continuing to grow in a sustainable way -- has recently lead the Chinese Central Government to changing its development macro-strategy for the next five years: new initiatives (both state-run and private) of development zones/projects will emphasize on environmental and sustainability issues. Sectors such as Information Technology, financial and tourism will be stimulated, and special incentives will be given to create investments on technological innovation.
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