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2000-2001’s Annual Report for China’s Internet

and E-commerce Development Summary

(Abstract)


Viewpoint

1. There is a sustained growth in the total revenue of Internet & e-commerce service in 2000, it already reaches 53 hundred million Yuan - 72% higher than the previous year. Within that, 57% goes to dial-up service, 20% for private line service, hosting service accounts for 14%, 7% for virtual hosting, registration income of domain names 2%. In the first half year, the service providers and subscriber grow fast; it is losing momentum in the second half.

2. The main body of service recipients is changing from individual users to corporate users; and service levels are diversifying

3. The infrastructure of corporate e-commerce is under construction, with a wide difference among different industries, there are diversified demands for Internet applications

4. The Internet user base is growing with an intensified diversification in age groups, educational background, demands for Internet applications

5. Internet & e-commerce will keep a steady growth in 2001. The competition in the fields of Internet & e-commerce has made a shift from conceptions to services

6. In 2001, the corporate e-commerce service is still the mainstream in Internet development, e-commerce mode will change from information platform to business platform

I. Research on the Environment of the Internet & e-Commerce development 2000

1. Macro-economic environment

a. Major turnover in national economy and notable increase in growth rate

b. The pulling effect of investment on the economic growth is intensified

c. Mounting consumption is still the driving force to economic growth.

d. Net export is decreased in its contribution to the economic growth

e. Remarkable enhancement to the economic operation quality and a substantial increase in corporate profits

f. Price level rallies and deflation is relieved

2. Environment of Information Industry

a. Electronic industry has kept a sustained, rapid and healthy development as a whole.

b. The structure of IT products tend to be more rational

c. The distribution of IT companies take on a new look

d. The reform and restructuring of telecom operation has basically been completed, there is considerable acceleration in its development

f. Further deepen the reform of state-owned enterprise in IT industry.

3. Environment of Policy and Regulation

a. Catalogue of Internet-centric policy and regulation promulgated in 2000

b. The principal points of policies and regulations

4. Investment environment and case study

a. Overview of the investment environment

b. Cases Internet venture capitals in 2000

c. Fluctuations of Nasdaq index

II. An Overview of Internet development in 2000

1. Brief introduction to Internet worldwide

a. Global distribution of  Internet user base

b. Increase of Internet user base in Asia

c. The framework of International champion domain name

d. Global distribution of domain names across all segments

e. The global distribution of Internet user languages

2. Internet in China

a. Internet infrastructure construction in China

b. Bandwidth distribution of backbone networks

c. Backbone network Services

Chapter Highlights

This section has compared and analyzed the Internet user bases in China, Asia and the world and registered domain names. According to the analysis, China ranks top in terms of Internet development, although Internet users are in a lower proportion to the total population. There is a noticeable growth in terms of the scale and growth rate of the Internet infrastructure; total bandwidth of International outlet has reached 2939M. It also involves the information about the services for corporate and individual users provided by China Telecom, China Jitong, CNC and China Mobile and other companies running the backbone networks

III.           Internet and e-Commerce Market 2000

1. Market Size

2. Market Capacity

a. Total capacity

b. Annual growth rate

3. Total number and makeup of service providers

a. ISP

b. E-Commerce

Chapter Highlights

The size of the Internet service market has reached 53 hundred million Yuan, e-commerce business revenues has come to 771 hundred million Yuan. Internet user base, the number of registered domain names, total capacity of IDC facility, the international outlets of the backbone networks and other indexes have dramatically increase this last year, which marks a new stage in the Internet development. The chapter also provides details of the number of service providers and the websites and their geographic distribution

IV.           Analysis on the demands of the Internet and e-Commerce market

1. Corporation’s demands for Internet and e-commerce service

a. The status quo of the corporate portals

b. Corporation’s demands for Internet access service

c. Explanations for the unavailability of Internet access in some corporations

2. The B2B demands among small and medium-sized enterprises

a. Portals established in different industries

b. Overall estimation of the B2B portal’s service in the enterprises

c. Online business among the enterprises

d. Network establishment in different industries

3. Characteristics of Individual demands for Internet-commerce service

a. Distributions in different age groups tend to be equal

b Their online time lasts longer

c. The cost of Internet access is not in direct proportion with the actual income

d. There is an increase in the number of wireless Internet users

4. Analysis on the individual demands for e-commerce service

a. The proportions of people who purchase online

b. Distribution of products purchased

c. The purchase frequency

d. The cause of purchase

Chapter Highlights

This chapter has analyzed and estimated the demands of both corporate and individual users. As to the corporate demands, it covers the analysis on the corporate informatization,

V. Characteristics of the Internet & e-Commerce Market 2000

1. Internet Access Market

a. Makeup of the market

b. Transformations in the role service providers play

c. Diversity of market makeup

d. Price competition

e. Service competition

2. B2B e-commerce market

a. Heavy reliance on the overseas venture capital and the capital market

b. The potential demands will come with the further evolvement of the market

c. Portal is transforming from the capital-oriented to resource-oriented

d. Portals themselves should be improved

e. Online advertisement is developing fast

f. A hard way to launch IPO

3. B2C e-commerce market

a. New mod- online business markets are emerging

b. Small and medium sized enterprises have a huge demand

c. Business volume rises sharply, far from exerting Internet potential to the full

d. Vertical portals face a real challenge

e. Information Flow is the key for the portals to achieve success

f. There is no effective competition yet, the value added service market has a large potential, new services are required

Chapter Highlights

This chapter covers market structure, price competition, service competition of the access service, B-C e-commerce, B-B-service as well as the characteristics of e-business. It focuses on the background, features, motivations of service providers to change their roles and the survival reasons for different e-commerce portals, the successful strategy and future development. The e-commerce develops fast, but the one fold service, a sharp increase in the number of service providers, a diversification of service pattern; a multi-layer service is the important features of 2000. Value added service market would be a hot spot in coming years

VI. e-Business model 2000

1. Business model

2. B2C Business model

3. B2B Business model

a. E-Commerce service

b. E-Marketing service

4. Profit-making models of e-Business

a. As a business tool

b. As a marketing medium

c. The relationship of the business model with the core competitive power of enterprises

Chapter Highlights

This chapter discusses the existing business models, profit-making models and the future models of B-C, B-B e-commerce. In addition, it also reveals the interactive relation of corporate competitiveness and e-commerce business models. At present, China has basically reduplicated the existing overseas framework in its own e-commerce business. Competition is intensified in the capital market. In general, there is a shortage of profitable business models. The competition has not been enhanced to the informative level, e-commerce doesn’t make contributions to the development of the enterprise. There is a great difference in the levels of the industrial e-commerce solutions.

VII. Factors influencing the development of the Internet & e-commerce market 2001-2003

1. Favorable factors

a. China’s entry into WTO

b. Government support

c. Development of e-commerce applications

d. The fast development of new technology

e. Changes in Investment Environment

2. Unfavorable factors

a. Informatization Corporation

b. The influence of security  problems on the market

c. The influence of payment problems on the market.

Chapter Highlights  

This chapter expatiates the influences of national policies, technical environment, investment environment on Internet & e-commerce service as well as their results. It focused on the coming policies and regulations, new technical applications and the flow of change in the investments.

VIII. Forecasts of Internet & e-commerce Development 2001-2003

1. Forecasts of Internet development 2001-2003

2. Quantitative forecasts of the Internet marketplace 2001-2003

a.Quantitative forecasts of the Internet user base

b. Forecasts of market size

c. Forecasts of the number of CN domain names

3. Forecasts of e-commerce development in China 2001-2003

4. Quantitative forecasts of China e-commerce market 2001-2003

 

Data

Figure 1       The distribution of the ISPs in 2000

                        Data SourceCCID

ISPs are concentrated in northern and eastern China; northwest ranks last in terms of ISP numbers

Figure 2  Distribution of B2B portals in 2000

A.      Type of portals

B.      Number of portals

C.       Proportion

D.     Information and business platform

E.      147

F.       40%

G.     Online business market

H.     104

I.        28%

J.       Solution provider

K.     45

L.      12%

M.   Other

N.     74

O.     20%

P.       Total

Q.     370

R.     100%

Data SourceCCID

The information and business platform is one of the important modes for B-B portal development in 2000,which signals the initial stage of B-B e-commerce development to some extent.

Figure 3        Reasons for the  unavailability of internet access in some enterprises

Data SourceCCID

Enterprises are not fully aware of the benefits of online networking, hence a large proportion of them think it unnecessary to build their own websites. Further efforts have to be made to stimulate the enterprise market.  In addition, the service qualities of ISPs also exert great influence on the proportions of enterprises with Internet access.

This article is an abstract from the annual report of CCID Consulting Inc. For more details, please refer to The Annual Research Report on China Internet and e-Commerce 2000.