E-Business in China

Topics: Electronic commerce, Electronic business, History of the Internet Pages: 8 (2484 words) Published: November 5, 2011
Developing E-Business in China
1. Introduction
It is widely accepted that the 21st century is the Online Information Age - 17-years after its introduction in China in early 1994. As a main branch of the Internet, e-business has played an important role since 1997. Although it was a slightly late start for the Internet, the first decade of the 21st century has witnessed a flourish of e-business.

As a new stage of commerce, e-business has had a great impact on the economic development, it dramatically shapes the transaction model and fuels the advance of economy in China. Nowadays specialized models of e-business have formed in China, such as Business-to-Business (B2B), Business-to-consumer (B2C) and Consumer-to-Consumer (C2C). Although there is an upward trend of online commerce in China, there are various problems that may hinder the further development of e-transaction. As e-business is in the phase of transition and upgrade, it is the high time to solve those problems, so that to ensure the healthy and sound improvement of e-business in China. Infrastructure of the Internet, online security, online payment and legal framework serve as the best illustrations among those problems, attracting concerns of not only from economists but also from government.

This essay will first investigate the current situation of e-business in China and then illustrate its benefits that China gets. Based on analysis of current problems involved in e-business, the essay aims to provide suggestions and measures to handle those problems.

2. Overview of E-Business Development in China
Compared with the western countries, e-business is still an emerging industry in China. A report of Chinese B2B Research Center (2009) reveals that the development of e-business can be divided into five stages, namely, embryonic stage (1997-1999), frost stage (2000-2002), recovery stage (2003-2005), rising stage (2006-2007) and transition and upgrade stage (2008-now).

The introduction of the Internet in 1997 offered an excellent opportunity to Chinese entrepreneurs to start their business. The first generation of e-commerce came into being within three years, including some renowned e-commerce websites, such as 8848, Dangdang and Alibaba.

However, the first two years of the 21st century was a curse instead of a blessing for Chinese e-commerce. The Internet bubble hampered the healthy growth of e-business and those start-ups all confronted with severe challenges. A number of those companies could hardly raise enough funds to support their websites operation well and went to bankruptcy at last.

After undergoing the tough time, the e-business stepped into a recovery stage in 2003. As the Internet bubble left the entrepreneurs a never forgotten lessen, they began to consider about the profit models and searched for a new form of revenue.

The year of 2006 and 2007 witnessed a great adjustment in the Internet economy. The widespread concept of online business led to a new increase of online platform. Based on B2B model, most e-companies started to gain profits during this time of period. Therefore, e-commerce acted as a new growth for companies. The statics of Chinese B2B Research Center (2009) illustrates that the new start-ups in the year of 2007 was 30.3% more than the current websites in total.

As the financial crisis took in 2008, no industry could escape from the crash, so did the e-commerce industry. Nevertheless, in comparison with those traditional industries, e-business features lower costs, which attracted the greater attention of small-and-medium-sized enterprises. Therefore, B2C achieved a chance for further development within two years from 2008 to 2009. During this period, the competition inside the e-business industry has become much fiercer than ever before, so the e-business went into the time of transition and update.

3. The Benefits of E-Business for China
There is no doubt that the emergence of e-commerce has...
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