WEB MEDIA SCHOOL session - 66 
LATEST INTERNET STATISTICS FOR ASIA AND CHINA
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.
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.
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%.
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 nclude 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 inChina?
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 vendorscan't make any guarantees about when packages will be received because they don't control the shipping process. Although someU.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, flyersdistributed 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 capitalist or accredited investors so that we can continue to expand ourbusiness 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.
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