E-Commerce Development in China

KEYWORDS: E-commerce, small and middle size enterprise, B2B, B2C C2C

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

1.0 Introduction

1.1 The application status of B2B in small and middle enterprise in ChinaE-commerce can be identified as the online buying and selling of goods and services that is characterized by servicing customers, conducting online transactions in an organization as well as collaborating with other business corporations. Other features of e-commerce include;

Digitalized information exchange

Inter and intra-organizational activities

Economic development is on the rise in China. This has been most evident in the small and medium scale enterprises. However the process of adopting the e-commerce is still not much a success. The Bank of China in March 1998 announced for the first time the completion of the first domestic trading ever. This is a step that marked the electronic era in the business world for China. On the other hand its application of the same somehow lagged behind. Luckily enough the idea is now dramatically gaining momentum. This impact is specifically being felt in small and medium scale arenas. This is an appropriate move into moving towards applying e-commerce ideology in China. This move if maintained would be of positive effect especially given that 90% of the small scale .it therefore is of great importance to see through the development of this project. It is important to note and give a thought to the fact that only e-commerce is in a position to expose these businesses to a bigger and wider market space, to accelerate the formation of a dense information network, to seize the opportunities as they come and to guarantee an enterprise of a gain. The initiative has a competitive advantage of a link with the international market. According to the e-commerce, we have 3 categories:

Business to-business

Business-to-customer

Consumer-to-consumer

1.2 Background of the introduction of the Small and medium sized businesses in China

Initially, e-commerce was a business for large organizations. However, today, small and medium sized businesses are dominating the e-commerce especially in China. The small and medium sized business are finding it cheaper to get into the business because it is less costly as the only cost incurred is the initial cost needed for the setting up-the businesss website. More so, e-commerce in China is benefiting the small and medium-sized business because the investors can display their products for the customers viewing within a non-limited geographical region. In addition, online platforms provide the investors with a perfect tool for promoting their products for increased sales.

1.3 History of development of e-commerce in China

E-commerce was first introduced in the Northern America in 1994 and later it spread to the rest of the world. China adopted e-commerce in 1997 with the introduction of famous e-commerce giants such as Dangdang, Alibaba and Taobao. The business was however adopted by large organizations only. During the 2000 to 2002 period, the business was not doing quite well due to the impacts of the depression. During this period, there was no significant progress and expansion on e-commerce business in China. However, after the depression, the e-commerce business showed a significant improvement between 2003 and 2005. By 2009 the internet environment had been well established in China. Small and medium-sized businesses took the advantage of the environmental suitability and many investors started designing their businesses for e-commerce businesses. Currently, China has more than 40,000 small and medium sized e-commerce companies an indication of a significant growth. By 2010, the Business to Business model (B2B) had hit a volume of nearly 300 billion Euros.

1.4 Operations modes and the analysis of the current of the development in china The mostly adopted model of business in China is the business to business (B2B). Electronic business process business here put to place transforms the traditional business to process to electronic procedure. This process has a positive impact in the sense that it reduces manpower, thereby decreasing the labor costs. It also helps to save on material resources, to reduce the input cost. It also has the power to bridge the gap created by time and do away with the limitations of the space. It therefore makes trading activities much more convenient, extremely quick and significantly improving the efficiency (Forbes 2015). Specifically the process involves information about the supply and demand that a seller releases to the internet and the supplier goes online to obtain the information and upon settling on a decision, the supplier contacts the seller with whom they seal the deal and at this point the transaction takes place

The Chinese government is in the process of enacting the laws and regulations that will create an enabling environment for the implementation of the e-commerce. Industries are in the process of integrating the e-commencing into their practice. Small scale and medium scale are also integrating the project In with the main goal of stabilizing their cash flow, information flow, logistics (Zimmerer 2005) these small scale enterprise stand the best advantages, due to a steady cash flow they can now be in a position to make steady and fast decision in regard to slightest changes in the market, due to steady information flow they can also make quick decisions that are fully informed and also release their own at the appropriate timing. The enterprises are also advantaged to make proper adjustments on technology, structure and the management of the enterprise with relatively less hardships. Last year in China small and medium enterprises SMEs B2B revenue growth was positive compared to the 30% just a few years ago.

MARKET SIZE

A

The graph represents the trend of an electric business started earlier and it indicates an increase in the market size with time.

There is a positive implication to market size caused by introduction of e-commerce in the business market.

B2B market steadily increased over the 5 years form the year 2008 to 2012.

1.5 Problems of small and medium-sized business in electronic commerce1.5.1 The lack a conducive business environment and legal normsAlthough in the current country e-commerce is developing rapidly, it is still in the primary stage of development. For small and medium-sized enterprises to develop electronic business they need the support of the government as a new way of business transactions, the current Chinese laws and regulations also are not very favorable. Once a problem in the e-commerce transactions has been identified its difficult for an enterpriser, to get legal protection. Since these people come in to join the e-commerce to access better security for their assets, it therefore gets contradictory when they end up losing their money due to long and tiresome procedures involved in the reclaiming process that is if there is any. And the particularity of electronic commerce, have an increased risk compared to the traditional commerce setting trade. Though both sides will be troubled about the process of fraud or damage, the rule of law is not sound, but also makes trade both sides lack the interest to safeguard the e-commerce business model that lack confidence and assurance.

1.5.2 Lack of a reliable securityE-commerce is an online business done on the internet. It is therefore prone to a thousand and one risks. The complexity of network security is problems that bring tremendous challenges such as network virus, hacker attacks, and network fraud. The threat from the Internet emerges endlessly. In the process of how to protect the safety of online banking capital, payment security, even the security of e-commerce sites. All these problems have to be taken into account. However problems like virus and cyber crime are way too serious and recurre...