Electronic Commerce in China: Can We Wake Up the Giant?

Electronic Commerce in China: Can We Wake Up the Giant?

Hongxiu Li (Turku School of Economics, Finland)
Copyright: © 2009 |Pages: 18
DOI: 10.4018/978-1-60566-100-1.ch016
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This chapter introduces the four sets of prerequisites for successful electronic commerce (e-commerce) development, including national factors, related and supporting industries, firm strategy, structure and rivalry factors and demand conditions. It introduces the present condition of e-commerce development in China and explores the four sets of prerequisites in China. It aims to find the influential factors which impede e-commerce development in China. In this chapter, a four-level approach is taken, in accordance with the four sets of prerequisites of e-commerce development. The four aspects are mirrored against the current situation in China, and some suggestions are put forward on the four aspects. Understanding the e-commerce development in China based on the four sets of prerequisites of e-commerce development can offer some guidance to less developed countries, which have the similar conditions in their e-commerce development.
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China might not be a typical less developed country, but it is a very convincing “living laboratory”. Even though the total resources of China are huge compared with all other less developed countries, the huge size of the country is a big challenge for all aspects of development. Resources per capita are not necessarily any larger than in many other less developed countries. If the Chinese can turn e-commerce into a success story, it should not be a “mission impossible” even for smaller, less developed countries. To wield a mariner phrase, smaller ships should be even faster to turn around if needed.

E-commerce in China has grown at an astonishing rate since 1993 when the Chinese government took the first step towards implementing electronic commerce (e-commerce) through a series of “golden projects”. According to the 20th statistical survey report on the Internet development in China released by China Internet Network Information Centre (CNNIC), the number of Internet users in China has reached 162 million and the number of Websites has arrived at 918,000 by the end of June in 2007 (CNNIC, 2007).

E-commerce in China is multiplying almost as fast as Internet users in China. According to the survey conducted by iResearch centre in China, the revenue generated in business-to-business (B2B) e-commerce in China has arrived at $169 billion in 2006, which takes nearly 95% of the total e-commerce avenue in China in 2006 (iResearch, 2007). The Chinese e-commerce market will continue to expand and perhaps total as much as $654.3 billion by 2010 (CCID, 2006). In China, B2B is still the main e-commerce model, and business-to-consumer (B2C) and consumer-to-consumer (C2C) takes a small size in the e-commerce market.

E-commerce development in China is in line with the rate of adoption theory and the industry life cycle theory, which describes the IT diffusion process as initially proceeding through a slow, gradual growth period, followed by dramatic and rapid growth, then gradual stabilization (Klepperer & Graddy, 1990). Currently, the U.S. is still the largest global Internet market, which takes nearly half of the global Internet market. Analysts predict that with the second largest user population and double-digit economic growth, China could potentially take the place of the U.S. to become the largest Internet market in the world (Du, 2006).

Though e-commerce in China has developed in the past several years, it falls behind some developed countries because of various obstacles. There is a call for research on the obstacles and useful strategies to help China to live up to its great potential in e-commerce and catch the developed countries.

Our research question is

What are the prerequisites for China to implement successful electronic commerce?

This chapter discusses the current condition of e-commerce development from four perspectives – the national factors; related and supporting industries; the strategy and structure and rivalry factors of the firm; and the conditions of demand. It aims at finding the barriers in e-commerce development in China from these four perspectives. In this chapter, a four-level approach is taken in accordance with the four sets of prerequisites of e-commerce development. The four aspects are mirrored against the current situation in China, and some suggestions are put forward on the four aspects to push e-commerce development and live up to its potential. This study focuses on e-commerce development in China. It offers some guidance on e-commerce development for less developed countries, which have similar conditions in their e-commerce development. The study is based on a literature study and contains no direct own empirical research.

Complete Chapter List

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List of Reviewers
Table of Contents
Omar A. El Sawy
Chapter 1
Richard Boateng, Alemayehu Molla, Richard Heeks
This chapter undertakes a meta-analysis of the published literature on e-commerce in developing economies (DEs). The aim is to take stock of the... Sample PDF
E-Commerce in Developing Economies: A Review of Theoretical Frameworks and Approaches
Chapter 2
Reinhold Decker
This chapter outlines and discusses current empirical findings and conceptual ideas concerning the status quo and future prospects of e-commerce in... Sample PDF
Significance and Success Factors of E-Commerce in China and Russia: An Empirical View
Chapter 3
Sushil K. Sharma, Jatinder N.D. Gupta
The past few years have seen a rise in the number of companies’ embracing e-commerce technologies in developing countries and the volume of... Sample PDF
Identifying Factors for Lack of E-Commerce in Developing Countries
Chapter 4
Antonis C. Stylianou, Stephanie S. Robbins, Pamela Jackson
It is widely recognized that e-commerce represents a critical resource for most business organizations. With over 1.3 billion people and... Sample PDF
E-Commerce Development in China: An Exploration of Perceptions and Attitudes
Chapter 5
Mahesha Kapurubandara
Acceptance of the Internet has paved the way towards the development of virtual communities that keep increasing in the current information society... Sample PDF
E-Commerce Adoption and Appropriation by SMEs in Sri Lanka
Chapter 6
Alev M. Efendioglu
The number of Internet users around the world has been steadily growing and this growth has provided the impetus and the opportunities for global... Sample PDF
E-Commerce in Developing Countries: Impediments and Opportunities
Chapter 7
Victor van Reijswoud, Arjan de Jager
E-governance is a powerful tool for bringing about change to government processes in the developing world. It operates at the crossroads between... Sample PDF
E-Governance in Uganda: Experiences and Lessons Learned from the DistrictNet Programme
Chapter 8
Abdelbaset Rabaiah
This chapter illustrates the impact of electronic government (e-government) on electronic commerce (e-commerce) development and implementation in... Sample PDF
E-Government and Its Impact on E-Commerce in LDCs
Chapter 9
Zakariya Belkhamza
Global deployment in information and communication technology requires understandings of the cultural constraints in technology acceptance and usage... Sample PDF
Cultural Interpretation of E-Commerce Acceptance in Developing Countries: Empirical Evidence from Malaysia and Algeria
Chapter 10
Ahu Genis-Gruber
E-commerce has been a widely used mean to purchase goods and services all over the world. This study investigates the role of cultural differences... Sample PDF
Cultural Differences, Information Technology Infrastructure, and E-Commerce Behavior: Implications for Developing Countries
Chapter 11
Kamel Rouibah
With the widespread use of mobile phones in the Arab world, companies, including banks, are offering different communication channels for their... Sample PDF
Mobile-Commerce Intention to Use via SMS: The Case of Kuwait
Chapter 12
Ayoub Yousefi
This study presents a theoretically-based model for economic analysis of electronic commerce in developing countries. The Porter diamond model is... Sample PDF
An Economic Framework for the Assessment of E-Commerce in Developing Countries
Chapter 13
Lena Aggestam
B2B development has been faster in the developed world comparing to developing countries. This chapter proposes a “tool” for managing CSF in B2B... Sample PDF
Guidelines for Preparing Organizations in Developing Countries for Standards-Based B2B
Chapter 14
Dimitrios Xanthidis, David Nicholas, Paris Argyrides
This chapter is the result of a two years effort to design a template aiming at standardizing, as much as such a task is feasible, the evaluation of... Sample PDF
A Proposed Template for the Evaluation of Web Design Strategies
Chapter 15
Jameleddine Ziadi, Abderrazzak Ben Salah
This chapter has as an aim the identification of the present reality of the e-commerce activity in Tunisia and the challenges its faces. After... Sample PDF
Electronic Commerce Reality in Tunisia
Chapter 16
Hongxiu Li
This chapter introduces the four sets of prerequisites for successful electronic commerce (e-commerce) development, including national factors... Sample PDF
Electronic Commerce in China: Can We Wake Up the Giant?
Chapter 17
Sherif Kamel
Emerging information and communication technology is driving transformation and change in the cyberspace. Speed, competition and globalization are... Sample PDF
Evolution of Electronic Procurement in Egypt: Case of Speedsend.com
Chapter 18
Borislav Jošanov, Marijana Vidas-Bubanja, Emilija Vuksanovic, Ejub Kajan, Bob Travica
The authors of this chapter constructed and published multidimensional model for the evaluation of e-commerce diffusion in any country. According to... Sample PDF
The State and Development of E-Commerce in Serbia
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