It should be initially observed that Asian Internet users are taking to e-commerce much slower than their American counterparts. A recent report, which analyzed the markets of Hong Kong, China, Korea, Singapore and Taiwan, found that between fifty-eight and sixty-three percent of Asian Internet users logged onto e-tail sites, as compared to nearly three-quarters of American Internet users. From a global perspective, the Asia Pacific market is a newcomer to Internet usage, and Asian users dont appear to be as receptive to purchasing online as users in the West.
According o Tait (2001) other studies have found that users in Hong Kong and Korea spend an average of twelve days per month on the World Wide Web, which surpasses the averages in the United States of eleven days per month. But Web usage only accounts for half of all Internet activity in those cities, the rest consists of such behavior as chatting, file transfers, sending e-mail and online gaming. For instance, Korea has experienced rapid penetration in its online audio and video usage, with three times as many users downloading or streaming multimedia files as those in the United States.
Researchers attribute this surge to the extensive inroads made by broadband in Korea. More than a third of the country’s Internet users have high-speed access, eclipsing the American figure of only six percent. The advanced usage of audio and video in Korea is a good indicator for those moving into the broadband content and advertising realm, and presents a glimpse of the future for the Asia-Pacific e-Commerce market.
According to Taylor (2000) it is not really clear why Asian Internet users have not been as receptive to e-commerce as Internet users in other orldwide markets, especially the American market, but he discusses some of the barriers to e-commerce growth along the Pacific Rim. For example, a study released last month by Cheskin Research and Chinadotcom Corporation indicated that e-commerce businesses will need to decipher and understand the regional differences among the Chinese population in order to succeed in that vast nation.
It is also important to note that the Peoples Republic of China has implemented strict new Internet regulations that curb oversees investments into Chinese dot-coms, and which require Internet companies to keep records on visitors and Web content. Furthermore, Chinese e-commerce is also hindered by the lack of convenient payment methods for consumers because of the low number of mainland residents who hold credit cards, the universal mode of conducting online e-commerce transactions.
In terms of which countries are positioning themselves to take advantage of e-commerce growth in Asia, it is of interest to note that in separate industry forums recently held in Beijing and Seoul, Chinese President Jiang Zemin and South Korean President Kim Dae-jung offered optimistic assessments of the ability of the Internet and -commerce to change their countries futures.
While President Kims remarks about the need for Asian cooperation to strengthen e-commerce in the region were not unexpected, President Zemins comments that the Internet will transform China surprised many observers, and highlighted the Chinese governments internal political struggle over the medium.
Henderson (2000) noted that, while speaking at a gathering in Beijing of Internet entrepreneurs and regulators from seventy countries, President Zemin declared that virtual reality was changing the way the Chinese people produce, earn and live, and that the melding of the traditional economy and the information technology would provide the engine for the development of the Chinese economy and society in the twenty-first century.
Chinese President Zemins remarks, broadcast nationwide Chinas domestic television news, seemed to be a ringing endorsement of his governments belief that the Peoples Republic of China was aware that it needed to embrace the Internet in order to keep up with the rapid transformation of the global economy. But soon afterwards, the influential The Peoples Daily, the governments fficial press organ, responded with an editorial emphasizing that China must seize the initiative to stem the tide of online dissent from its ideological enemies.
President Zemin has frequently alluded to Chinas tightrope walk between extending Internet access to its people to foster e-commerce, and censoring what it considered subversive, anti-government activities. The Peoples Daily reaction to his speech reflects these internal disputes. Zemin was compelled to note as well in a subsequent speech that the Internet also spawned a flood of trash and dispensed information that was untrue.
The fact is that China has routinely blocked citizen access to Western media outlets and dissident sites operating outside the country, which of course presents vast and troubling potential problems for e-Commerce entrepreneurs in other countries seeking entrance into the massive China market. Tait (2001) notes that despite these negative aspects, it is encouraging for e-commerce businesses that fifteen million Chinese citizens now have Internet access and that the number of people in China going online is doubling every six months.
But it is important to emember that there are over one-billion people in China, so it is evident that much progress still needs to be made to establish an e-Commerce market in China. On a positive note, the Chinese government evidently recognizes the advantages and disadvantages of the World Wide Web, and the struggle to find a happy medium allowing economic growth but restricting information access will no doubt continue. The bottom line is that, whether the Chinese government likes it or not, Internet expansion in China is inevitable, there is no way to effectively prevent it and still compete in the global economy.
According to Taylor (2000) it is also encouraging to note that Chinese government officials are preparing a regulatory framework to govern the e-commerce industry and lay out guidelines on taxation, advertising, content, and other key areas. If China wasnt intending to promote vigorous e-commerce growth, these measures wouldnt be in the works, so it is a good sign for outside e-commerce investors. Another encouraging development is that the online advertising industry in China generated an estimated eight million dollars last year, which is paltry by American standards, but that figure is expected to double this year, and
Chinese government officials are said to be drawing up rules to prevent the posting of false and deceptive advertising online. The regulatory framework appears to be a joint effort by both government officials and senior industry executives to address the issues surrounding the e-commerce industry while it is still relatively small and manageable. Many Chinese Internet entities are controlled by the government, creating a unique public and private forum in which the tightly-held reins of the government often hinder the needs of the company, but that may change in the future.
Tait 2000) believes that South Korea is another Asian nation likely to lead the region in e-commerce development. In Seoul recently, President Kim told six-hundred international industry regulators and executives at the International Conference on Electronic Commerce 2000 that his country will play a leading role in promoting e-Commerce in the areas of electronics, textile, steel and chemistry, which are traditionally strong sectors for South Korea.
President Kim said his government planned to raise four-hundred and fifty million dollars for a government business venture investment fund and an dditional ninety million for a merger and acquisition fund. The South Korean government also intended to expand distribution infrastructure, train the workforce, support regional e-commerce ventures and establish a federation of large conglomerates, venture firms and smaller companies engaged in Internet business. President Kim called for the other Asian countries to cooperate with one another in expanding telecommunications networks, IT development, promoting e-commerce and standardization.
He said that sixteen million South Koreans, approximately one-third of the population, have Internet access. That figure will rise to thirty million in two years, the South Korean president predicted. Shifting our focus to a discussion of what other countries are doing to take advantage of the potential for e-commerce in Asia, we find that in spite of language and cultural challenges in the international e-commerce arena, Asian e-commerce is set to expand dramatically, and American companies are leading the outside world into the region with big-dollar investments.
According to e-commerce researchers, the surge in Asia-Pacific e-commerce will result in one and one-half trillion dollars in revenues by 2004. This incredible olume of e-commerce business will make the Asian region a powerhouse in the overall global Internet economy. The study also forecasts that worldwide online spending will reach seven trillion dollars by 2004, with the Asia-Pacific market accounting for more than twenty percent of total sales. Henderson (2000) notes that recent trade agreements between Asian countries designed to promote e-commerce in the Pacific Rim are expected to fuel the Internet economy there.
For example, the first regional e-commerce alliance in Asia, connecting the markets of Hong Kong, Taiwan and Singapore, was formed recently. In addition, American investors are entering the Asian market armed with millions of dollars of venture capital. For instance, Internet incubator CMGI has sealed a three-hundred and eighty million dollar deal with Pacific Century CyberWorks to create and run a network of Internet businesses across the Asia-Pacific region.
It is significant that Microsoft has announced specific partnerships with Asian high-technology giants. Aware that the Asia-Pacific region enjoys a number of advantages that will accelerate its development as a major contributor to worldwide e-commerce, including localized evelopment efforts and tight links to supply chains in several major industries, Microsoft recently announced that it is teaming up with the Japanese corporation Hitachi to focus on the development of Microsoft 2000-based enterprise solutions and related consulting services.
At the same time, in response to this move by its major competitor, the American computer giant Hewlitt-Packard has also announced a business partnership with Internet investment firm Softbank Corporation in order to create and develop a new Asian-based e-commerce company to sell Hewlitt-Packard computers and rinters to Japanese consumers. According to Temporal (2000) American portal Yahoo! has also launched a number of local Web properties in the Asia-Pacific region, including Taiwan, Singapore, Hong Kong, China, Korea and Japan, as well as Yahoo!
Asia, an overall Internet guide for Southeast Asia. Local businesses are looking to the popular Yahoo! Asia to develop brand awareness, much in the same way that emerging American businesses have relied on portal agreements with Yahoo! or America Online. In conclusion, it is evident that e-commerce in Asia is emerging with vigor, and hat American businesses are now looking to the Far East as the new West, a place for major expansion.
As language barriers are overcome, and home PC ownership in the region increases, Asian e-commerce is set to explode. However, e-commerce expansion will not be strong everywhere in the region. Hong Kong is in the forefront, with low trade barriers, while Indias high taxes and Chinas weak infrastructure are hindering the growth of e-commerce in those countries. Still, the whole region will benefit greatly from the efforts of the several leaders which have been discussed in this paper.
