Report: China's E-Commerce Market In Early Stage

HONG KONG (04/28/2000) - Despite the availability of more than 1,100 consumer e-commerce sites in China by the end of this year's first quarter, the country's e-commerce market is still in its infancy, according to results of a national survey reported today on the Web site of the official People's Daily newspaper.

The survey, conducted by the Computer and Microelectronics Industry Development Research Center, CCIDNet Consulting, and the Ministry of Information Industry, said e-commerce still represents far less business in China than in more developed countries.

The Chinese government recently has highlighted e-commerce as the key tool for the country to restructure its economy and meet the challenge of a global economy. [See "E-commerce is China's Trump Card, Official Says," March 16.] Internet retailing in 1999 accounted for just 55 million Chinese yuan renminbi (US$6.6 million), according to the report.

Only 20.3 percent of the country's Internet users have used online shopping, and only 40 percent of those were satisfied with the experience, the survey said. More than 80 percent of Internet users worry about the security of online transactions, it reported.

The survey cited as the most often used retail e-commerce site in China, People's Daily reported.

The survey results reflect lingering barriers to e-commerce in China, where the infrastructure for payment and delivery is not well developed, said one e-commerce analyst.

"The largest misconception about the Chinese market is that its huge size guarantees huge e-commerce revenue," said Matthew McGarvey, an analyst at International Data Corp. Asia-Pacific (IDC), in Hong Kong.

The survey results are similar to figures that IDC has found, McGarvey said.

Although there is a large number of e-commerce sites, many of them can only deliver goods or collect payment in one city, he said.

"If half the e-commerce sites in Shanghai can't accept debit cards or credit cards from Beijing, that greatly limits the number of options each customer has," McGarvey said.

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