Today's article by Myriam Telles is an excellent one on marketing in China and Asia. Rather than just running on, I'll end here and let you enjoy this article
About 18.0 million Chinese-speaking people in Asia, the U.S. and
around the world currently use the Internet, or about 5.4% of the world's
online population speak Chinese (Global Reach Express, July 2000). According
to the China Internet Network Information Center, Internet usage in China
alone soared 324% in 1999 to nearly 9 million users, which
represents a very small percentage of China's more than 1 billion
population. The number of people using the Internet is expected to
increase to 14 million by 2003 and usage may surge more dramatically
when China enters the World Trade Organization.
Boston Consulting Group's recent study shows that Asia's total online
buying of goods and services will be worth about $17.9 billion by 2001.
Most Asian analysts and economist agree, however, that the greatest
opportunities in the country of China will exist in the B2B markets,
rather than the B2C markets. Currently only a small number of consumers in
China are comfortable with the whole idea of purchasing goods online.
However, in the B2B arena, China's worldwide exports were nearly $200
billion in 1999 and exports are growing 10 percent a year. "Imagine if you
can capture 5 percent of that in business-to-business Internet
e-commerce," said Kenneth Courtis, Asian economic analyst in a recent
interview with Asiaweek (Global Reach Express, July 2000).
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EXPERT INTERVIEW: CHINASERVE.COM DISCUSSES THE OPPORTUNITIES
AND CHALLENGES OF CONDUCTING E-COMMERCE IN CHINA - by Myriam Telles
Myriam Telles, Global Communicator's head writer, recently interviewed
Jessica Chen, Business Analyst at Irvine, California-based
ChinaServe.com about the company's experiences conducting e-commerce in China via its
website, ebookschina.com. Since April the site has had about
200,000 visitors.
CEO Henry Cai founded high technology company, Dynamic Management, in
1998. He changed the company's name to ChinaServe.com at the beginning of
this year to more accurately reflect the fact that the company's major
services include developing and implementing B2B and B2C e-business
and e-commerce software for Chinese and English web sites, as well as
upgrading existing web sites to increase their interactivity and
e-commerce effectiveness in Chinese or English speaking countries.
ChinaServe.com is a subsidiary of high tech company, Oceanland Group
Limited (HK Stock Exchange:0217).
Q: What kind of e-commerce services does your web site,
ebookschina.com, provide and what is its target audience?
A: The web site is a very interactive, user-friendly B2B and B2C
e-commerce site that allows consumers and businesses to purchase Chinese
books that range from ancient books to those written by some of today's
most popular authors. It is written in both Simplified and Traditional
Chinese. The target audiences are affluent, educated Chinese-speaking
consumers and business owners all over the world, especially those
living in the United States and in China. Currently Mainland China accounts
for 60% of our business, Hong Kong and North America (including the U.S.)
account for 15% each, and the rest of the world accounts for 10%.
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Q: A majority of your site's e-commerce business comes from Mainland
China. What did you do that allowed your U.S.-based company to
accomplish this?
A: Doing business with someone you trust is very important to people
living in Beijing and other cities in Mainland China. So in order to do
e-commerce in China, we teamed up with XinHua bookstore which is China's
largest government-owned brick-and-mortar bookseller that owns about
5,000 bookstores all over China. They have local contacts and excellent
distribution channels. Our company also has local offices in Beijing,
China.
Q: Does the Chinese government impose severe restrictions on
e-commerce in China?
A: There are some reasonable restrictions, however, there are many
e-commerce sites already operating in China. The main restrictions
the government imposes on selling books online are that they can't be
anti-government, contain politically sensitive material, nor include
pornographic material.
Q: What are some of the interactive features that attract visitors to
your site?
A: We designed a very dynamic, interactive site that is also easy to
use. One of its most popular features is the search engine developed by
our Chief Technology Officer, Bing Liu, that allows visitors to quickly
locate a book by searching our database of over 2 million titles by ISBN
number, book name, author, title, category, etc. Other popular features
include online chats with authors and book reviews by famous critics.
In addition to the site's interactivity, I think visitors buy books
from our site because we have a wide selection of great books and good
prices and terms. In the first three months since our grand opening we have
shipped books free of charge. People who order books from the United
States also appreciate that we charge them low, China-based prices
which means they might pay 3 U.S. dollars instead of $10 to $20 for a
typical book bought in the U.S.
Q: What are some of the main challenges of conducting e-commerce in
China?
A: Although Internet use is increasing in China, e-commerce is still
in its infancy. I think it will probably take more than 5 years to
mature. People are very afraid of fraud so they are hesitant to buy online.
Housing is so expensive in China that most people live in very small
apartments with little storage space. This means that most people are
used to a cash-and-carry society where they buy their goods from a
local business that they walk to daily.
China also doesn't have the infrastructure that makes e-commerce easy,
such as good transportation and dependable shipping methods. For
example, most shipping is provided by the government, so vendors can't make any
guarantees about when packages will be received because they don't
control the shipping process. Although some U.S.-based companies like DHL and
FedEx are in China, their shipping costs can be sky high - costing up
to 10 times the value of what the person ordered.
In the U.S. customers can return what they've purchased and get their
money back or make exchanges. In China, it is "buyer beware" that
rules because all sales are considered final and returns and exchanges are
usually not accepted. This further enforces the "cash and carry"
mentality and makes buyers check out products before they buy them.
Q: What types of payment methods are used on your web site?
A: Credit card use is not popular in China, so most people use an ATM
debit card to pay for their online purchases on our site. Another
popular method is cash transfer via wire. The product is not delivered until
payment is cleared. Cash on delivery (COD) is used too, but rarely.
Q: How did you promote your web site in China and in the U.S.?
A: In Beijing we promoted our web site via billboards, flyers, a lot of
public relations efforts through news agencies such as Business Wire,
and banners on the Internet that we exchanged with other web sites. We
also did in-person promotion via visits to various government agencies.
In the U.S. we promoted our web site via the Internet, flyers
distributed to individuals, and visits to major libraries, bookstores, and
businesses. For example, in Southern California we distributed flyers to
Chinese-concentrated shopping centers that cater to affluent Chinese
consumers.
Our offices in Beijing do all of our web site marketing which includes
optimization of keywords/meta tags, registration in search engines
such as Yahoo!China and Sohu.com, and promotion of our site's search engine
placement.
Q: What does the future hold for your e-commerce site?
A: Our company is currently seeking funding from venture capitalists
or accredited investors so that we can continue to expand our business
and promote our site.
Anyone interested in learning more about ChinaServe.com should contact
Ms. Jessica Chen, who is fluent in both English and Mandarin, by phone at
(949) 790-9968 or by email at mailto:JChen@ChinaServe.com.
Myriam Telles is head writer for Global
Communicator and a journalist who has had over 500 articles published in English
and Spanish covering the fields of: the Internet, high technology,
telecommunications, medicine, pharmaceuticals, investing, and
multicultural marketing. She can be reached by e-mail at:
mdtelles@ix.netcom.com.
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We hope you find this information useful.
Peter Thiruselvam
Editor
The WebProNews Team
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