Compaq Unveils Medicine E-Commerce Plan in China

Compaq Computer Corp. today unveiled an ambitious Chinese medicine electronic commerce project that highlights the company's focus on building e-commerce platforms in the highly touted Greater China market.

Compaq's strategy aims to take the company deeper into Internet services development and beyond its hardware-oriented image, company officials said at an event today here at Compaq's Hong Kong offices.

"In Greater China, the Internet is the big thing," and companies have to start moving to capture the market, said Grace Ma, director of the corporate communications group at Compaq's Greater China division.

The plan announced today, with the government of Sichuan Province, may be dwarfed by bigger projects the company funds and implements in mainland China over the next few years.

In Sichuan Province, a major center for production of traditional Chinese medicines, Compaq will participate in the development of a large e-commerce network for medicine vendors.

Sites built under the project will allow Chinese medicine companies to publicize products, buy raw materials, get sales orders, and build sales networks, according to Compaq. The e-commerce network is likely to be in place by year's end, officials said.

In addition, Compaq and the Sichuan government will jointly form the Compaq Sichuan eBusiness Co., which will help to build an e-commerce infrastructure for the province. Compaq will invest US$1.5 million worth of equipment, solutions, and funding in the project, officials said.

However, bigger projects are on the horizon for Compaq. The company is working out details of an investment venture with U.S. Internet investment company CMGI Inc. and Shanghai Information Investment to help regional Chinese governments and companies go on-line. The venture will build and offer Internet and e-commerce services as well as offer management and investment consulting, according to Compaq.

Shanghai Information Investment, headed by the son of Chinese leader Jiang Zemin, has become a major investment force in the Shanghai area and is known to be well-connected to the local Shanghai government.

Compaq also is involved in a project to link all Chinese government ministries and provincial governments via the Internet. The company is contributing products and services to the fledgling Government On Line project, which is under discussion among government agencies.

Compaq is also building up e-commerce business in Hong Kong. Next week Hongkong Shanghai Bank (HSBC) will launch a secure electronic payments system that Compaq helped to develop, which will provide payment functions for merchants that want to enter e-commerce. Compaq also built the back end for online financial services site e-finance.com.hk, Compaq officials said today.

The projects exemplify a refocusing of the company's enterprise solutions and services group, which is now aiming at three markets: e-commerce, carriers and Internet service provider facilities, and back-end solutions such as enterprise resource planning and customer relationship management.

"It has to be a leveraged model, rather than just pushing the boxes," said Soo Pine Ho, marketing director for Compaq's enterprise solutions and service group in the Greater China division.

Compaq's Greater China Division, in Hong Kong, can be reached at +852-2805-3111, or on the Web at http://www.compaq.com.hk.

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