China is one of the world's oldest civilizations and the oldest continuous civilization. China is the largest country in East Asia and the most populous in the world with over 1.3 billion people, approximately one-fifth of the world's population. It has archaeological evidence dating back over 5,000 years, with one of the world's oldest written language systems, rich and specific culture, one of the oldest religion and amazing traditions. For centuries China has been among the scientific and technological leaders - paper and papermaking, movable type printing, needle compass, gunpowder, toilet paper, natural gas as fuel, the hydraulic-powered armillary sphere, the hydraulic-powered trip hammer, the mechanical chain drive, the mechanical belt drive, the raised-relief map, the propeller, the crossbow, the cannon, the rocket, the multistage rocket, etc. So, China still remains among the technological giants of the world, including the ICT and e-commerce sphere.
Thus, China leads the list of Asian top 10 Internet countries, as of second quarter of 2009, with 338 million users, leaving Japan and India which are second and third respectively, with 94 million and 81 million users respectively, far behind (www.internetworldstats.com). At the same time, though the internet penetration is very high making China to be the largest Internet population, it still accounts a little more than 25% that is lower considerably in comparison with other ICT leaders.
As for the broadband penetration dynamic, the growth is significant. In 2000 under 2% of Chinese could get an Internet access, later, in 2005, the amount of Web users grew to around 8%. Nevertheless Internet penetration growth made up over 1,400%. Moreover, China takes almost 60% of Asian broadband market share.
China has not only emerged as a major player in terms of consumption ICT equipment, but is now also one of the world’s largest producers of such products. China’s central planners, charged with kick-starting what was regarded as a strategic sector, understood well what China lacked: technology and capital. Foreign companies could provide much of the former and a lot of the latter, and big names like Motorola of the US and Ericsson of Sweden were thus offered an explicit deal: market access in return for technology. The foreigners came, and earned huge revenue. But their investments have also been instrumental in the creation of a group of successful domestic firms, led by companies such as TCL, and Huawei, which in recent years have been winning market share in their own right, in China and abroad.
Foreign transfers have also been instrumental in China’s rise as a major IT producer, although in this area the main suppliers of money, expertise and machinery have been Taiwan firms. Over the last few years China managed to overtake both Taiwan and Japan to become the second-largest producer of IT equipment in the world, lagging only the US. Taiwan expertise has also played a role in the creation of a small but fast-growing semiconductor foundry business in China.
A majority of broadband subscribers are DSL, mostly from China Telecom and China Netcom. The price varies at different provinces, usually around US$10 – $20/month for a 1M DSL with unlimited downloads.
The first Internet connection in Mainland China was established in 1987 between ICA Beijing and Karlsruhe University in Germany. Since then the Internet in China has grown to host the largest base of net users in the world. 1987 is also famous in China for the first successful e-mail sending with the contents "Across the Great Wall, we can reach every corner in the world" (越過長城，走向世界). So, being settled in China, Internet set a new cultural phenomenon in China that has developed into one of world’s largest Internet infrastructure.
The first four major national networks, namely CSTNet, ChinaNet, CERNet and CHINAGBN, represent the background of the China Internet. Later dominant telecom providers also commenced providing internet services. Public Internet services are usually offered by provincial telecom companies, which sometimes are traded between networks. Internet service providers without a nation-wide network such as the Information Highway could not compete with their bandwidth provider, the telecom companies, and often run out of business.
The interconnection between these networks is a big concern of Internet users, since Internet traffic via the global Internet is quite slow. Nevertheless, major Internet services providers are loath to support competitors.
Internet country code top-level domain (ccTLD) for People's Republic of China is .cn. Two year registration agreement is rather cheap - just $ 70.00 for .cn/ .com.cn/ .net.cn/ .org.cn (http://www.rwgusa.com). Thus, for instance, Malaysia’s .my is worth $299 and Vietnam’s .vn costs $499. Indonesia’s .id would cost you marvelous sum - $998.
.cn is currently the second most common top-level domain, only after .com, but before .de, and .net, with over 12 million registrations.
The domain name administration in People's Republic of China is accomplished through a branch of the Ministry of Information Industry. This ministry supervises everything from telecommunications to broadcasting. The registry is maintained by China Internet Network Information Center (CNNIC). The actual registrations are carried out through commercial registrars similar to other parts of the world. Neulevel has entered into a partnership with CNNIC to market .cn outside mainland China.
Like in other countries, Chinese can register for second-level domain names related to the certain provinces:
• .ah.cn : Anhui
• .bj.cn : Beijing
• .cq.cn : Chongqing
• .fj.cn : Fujian
• .gd.cn : Guangdong
• .gs.cn : Gansu
• .gz.cn : Guizhou
• .gx.cn : Guangxi
• .ha.cn : Henan
• .hb.cn : Hubei
• .he.cn : Hebei
• .hi.cn : Hainan
• .hl.cn : Heilongjiang
• .hn.cn : Hunan
• .jl.cn : Jilin
• .js.cn : Jiangsu
• .jx.cn : Jiangxi
• .ln.cn : Liaoning
• .nm.cn : Inner Mongolia
• .nx.cn : Ningxia
• .qh.cn : Qinghai
• .sc.cn : Sichuan
• .sd.cn : Shandong
• .sh.cn : Shanghai
• .sn.cn : Shaanxi
• .sx.cn : Shanxi
• .tj.cn : Tianjin
• .tw.cn : Taiwan
• .xj.cn : Xinjiang
• .xz.cn : Xizang
• .yn.cn : Yunnan
• .zj.cn : Zhejiang
However, there are the list of ones targeted for certain types of organizations and geographic locations.
• .ac.cn : Academic or scientific research institutions
• .com.cn : Commercial
• .edu.cn : Educational institutions
• .gov.cn : Government agencies
• .net.cn : Internet oriented organizations
• .org.cn : Organizations
The third-level registrations were available before second-level registrations became available in 2004, and third-level registrants were given first shot at getting their name at the second level when this was opened up.
Mostly Chinese users turn to the Web to read news, to search for information, and to check or to send e-mail. They also go to BBS or web forums, find music or videos, or download files. Growing number of Chinese are applying to the Internet for e-commerce and related to it purposes.
The most popular Chinese-language infotainment web portals include Sina.com, Sohu, and 163.com. Other Internet service providers such as the human resource service provider 51job and the electronic commerce web sites such as Alibaba.com are less popular but more successful on their speciality. Their success led some of them to the make IPOs.
As for the leading search engines, Baidu occupies the top position. Led by Kai-Fu Lee, a former Microsoft executive, Google China has also entered the Chinese market
In spite of the fact economic growth in China has been slowing down, along with other countries in terms of the global crisis, e-commerce market is still growing strong. According to a China Tech News report, trade volume of China’s e-commerce market increased approximately 20% in 2008. It is expected to reach CNY3.22 trillion in total trade by 2010, up from CNY1.951 trillion in 2008. China e-commerce giant Alibaba Group’s C2C auction website Taobao.com was one of the greatest beneficiaries of this growth in 2008, realizing CNY100 billion in trade volume, up from CNY43.3 billion in 2007.
Enterprises across the China seek to gain the benefits of electronic business, but not all of the e-commerce initiatives have been successful to date. The e-commerce development and success in China are related to the working out the rules and infrastructure that are fundamental to a modern market economy.
It’s known widely Alibaba dominates China’s e-commerce market and its dominance is quite impressive. eBay’s failure in its first attempt to gain a foothold in China despite vast resources and international experience demonstrated that a true competitor is more likely to emerge from the domestic front instead of from overseas.
Baidu, being a Chinese online search leader, has recently entered the online C2C marketplace arena, in October 2008, aming to become a firm Alibaba competitor. To compete with Alibaba, Baidu released its own C2C marketplace and payment platform. Youa, a service similar to PayPal, is a Baidu’s answer to Taobao. It uses its own independent payment service to avoid use of Alibaba’s Alipay. After only three months of competition, Alibaba has already moved to take defensive measures.
Taobao began blocking Baidu’s search spiders in an alleged attempt to prevent outside parties from cheating Taobao users. Tech News reported that Taobao claims that 80% of consumer complaints are the result of just a few fraudulent businesses. These businesses initially obtain customers’ trust though pay-per-click advertisements supported by the search engines. However, while Taobao only partially blocks Yahoo and Google, Baidu is completely blocked. Taobao also improved its product search interface to encourage product search within the Taobao site itself and avoid use of external search engines. To provide additional advertising channels for online merchants Alibaba merged its advertising platform Alimama into Taobao for their support.
Baidu does not need support since it is China homegrown just like Alibaba, and while Taobao will likely maintain its position as a market leader for some time. 2009 supposed to become a year when the real competition in China’s e-commerce market starts.
The other China’s e-commerce giants are represented by:
• Yahoo! China – China’s third largest consumer portal/search engine
• Alisoft.com - An Internet-based business management software company targeting SMEs in China. Producing sales and contact management software, and communications applications. Partners include Microsoft and Cisco.
• Alimama.com - An online advertising exchange/network
• Koubei.com - China’s largest local classifieds and discussion forms. Topics include, restaurants, apartments, and employment. This is 53.5% owned by Alibaba Group. (www.trademediablog.com).
E-commerce penetration in China has just reached 26% among China’s internet users versus 80% in the US, according to Alibaba.com founder. That makes the country look for the ways for further development of China’s e-commerce market to remain strong competitor on the world’s e-commerce market as well as to strive to the world’s ICT infrastructure dominance.