E-Commerce Development in China: An Exploration of Perceptions and Attitudes

Introduction

The business potential of e-commerce technologies is seemingly irrefutable given the more than 1.1 billion Internet users worldwide (Internet World Stats, 2007). Of these 1.1 billion users, the largest share, almost 400 million or 36 percent, reside in Asia. Although growth in North America has been steady since the inception of the Internet and it now accounts for 21% of the total, the U.S. share of this global market has been gradually declining (211 million; 19%). In contrast, China, with the second largest Internet user population (139 million; 12.5%), is expected to continue gaining market share (572% growth between 2000 and 2007) (China Internet Network Information Center, 2007). These developments are in line with the rate of adoption 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, and finally a decline (Rogers, 1995). With over 1.3 billion people and double-digit economic growth, China could potentially emerge as the largest Internet and telecommunications market in the world if certain economic, environmental, and organizational barriers are addressed effectively. Revenues generated through e-commerce transactions have soared to $127.5 billion in 2006, an increase of 50% from the previous year and “with an estimated 50 million Chinese engaged in e-commerce, growth is extremely promising” (Rein, 2007). However, Internet-based transactions remain a mere fraction of the total traditional business revenue. In spite of this paucity of earnings, the Internet provides the Chinese with easy access to the outside world and many are eager to embrace this new technology.