Overview of Electronic Commerce in China

3.2 Overview of Electronic Commerce in China

3.2.1 Internet in China

In September 1987, the Chinese Academic Network built the first domestic Internet e-mail node and sent out the first e-mail from China. The universities were the first Chinese institutions to connect to the Internet. In 1990, a number of Chinese universities and educational institute including the Ministry of Education were connected. But substantial growth of Internet was not occurred until year 1994, when the National Computing and Networking Facility of China project opened a 64K international dedicated line to the Internet, which achieved a full-functional connection. After 1995, the adoption of the Internet by universities and government organizations accelerated. When the China Internet Network Information Center released its first Statistical Report on Internet Development in China in 1997, there were 299,000 computers hosts and 620,000 Internet users . But China did not set a comprehensive national information policy for Internet until 1990s; before that, the government mostly issued individual regulations to deal with individual issues. There was no doubt that Internet has a potential and promoting information-oriented China will invigorate the economy. This common understanding by government and industry was officially confirmed in the ninth five-year plan in 1997. The Internet project was listed under the constriction agenda of the State Information Infrastructure by the State Council in the same year . In 2000, the central government reinforced this understanding and reiterated its plan to ‘drive industrialization through information, make better use of information technology’s advantages as late starters and attain progress on social productivity ...

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...ine shopping

Beijing 754 340 45.1% 229 30.3%

Shanghai 809 408 50.4% 330 40.8%

Guangzhou 480 145 32.0% 119 24.8%

Shenzhen 477 149 31.2% 113 23.6%

Total 2520 1050 41.7% 790 31.4%

(Source: China Online Shopping Survey, China Intelli Consulting Corporation, May 2008)

A survey conducted in four major cities shows that the penetration of C2C commerce including open market was 31.4% in 2007. In those four cities, among 7.9 million online shopping mall consumers, there were 5 million consumers in Taobao, 2 million in eBay EachNet. The frequency of shopping in Taobao is the highest, which shows that open market is pretty active in those major cities. Currently Taobao and eBay EachNet dominates 95% of this market in China.

Graph 3.8: Market Share of C2C Online Shopping in China.

(Source: China Online Shopping Survey, China Intelli Consulting Corporation, May 20084.