Marketing Channels and Supply Chain Management in Contemporary Globalism: E-Commerce Development in China and its Implication for Business

Marketing Channels and Supply Chain Management in Contemporary Globalism: E-Commerce Development in China and its Implication for Business

Jianli Hu (California State Polytechnic University, Pomona, USA), Joan Marques (Woodbury University, USA), Svetlana Holt (Woodbury University, USA) and Angelo A. Camillo (Woodbury University, USA)
DOI: 10.4018/978-1-4666-6220-9.ch018
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Abstract

When Alibaba Inc. started Taobao.com in 2003, there were only a handful of Internet sellers trading online, mostly in second-hand products. Ten years later, China's e-commerce has become the world's largest in terms of total consumer spending, surpassing that of the USA. The expanding service sector within the e-business industry, growing popularity of mobile phones, increased number of Internet users, and extensive competition in the e-commerce industry contribute to the astounding growth of China's Internet market. Despite all the optimism, there are still many issues challenging the development of e-commerce in China, particularly the constraints presented in the domestic and international supply chain systems. In this chapter, the authors review the present market conditions of the Business-to-Consumer (B2C) and Consumer-to-Consumer (C2C) markets in China, analyze the critical factors of future development, and discuss the implications for online businesses.
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Introduction

E-commerce, the business-related activities conducted over electronic formats such as Internet and other computing networks, has been replacing traditional paper-based transaction flows in recent years. Technologies such as mobile devices, electronic data interchange, and supply chain management allow businesses nowadays to complete tasks at a much more efficient and effective manner. As one of the largest countries in the world, China’s e-commerce market has benefited significantly from the rising income of a massive population, popularization of the Internet, fast development of wireless network, and expansion of logistical systems. The country’s e-commerce development attracts immense interest from domestic and foreign investors, entrepreneurs, and venture capitalists. In recent years, the growth of China’s e-commerce has outpaced that of western countries. According to the recent newsletter published by China Internet Network Information Center (CNNIC), China boasts the world’s largest online presence with 591 million Internet users and 464 million mobile “netizens” as of the end of June, 2013 (CNNIC, 2013). As for the number of digital buyers, China is also predicted to have a distinct lead with 270.9 million shoppers, followed by the USA (156.1 million) and Japan (75.6 million) (Figure 1).

Figure 1.

Digital buyers worldwide (Source: eMarketer)

Key Terms in this Chapter

E-Commerce: The business-related activities conducted over electronic formats such as internet and other computing networks.

C2C (Consumer-to-Consumer): E-commerce transaction activities involving consumers sharing products and services through a third party online.

B2B (Business-to-Business): E-commerce transaction activities involving businesses selling products and services to businesses online, either directly from their own websites or through a third party.

Singles Day Promotion: Singles Day is a day of celebration for singlehood in China. The date, November 11, was chosen because of the connection between singles and the number of 1’s in the date (4 singles). Many businesses use this day to plan various shopping promotions targeting especially at young consumers.

B2C (Business-to-Consumer): E-commerce transaction activities involving businesses selling products and services to consumers online, either directly from their own websites or through a third party.

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