B2B dominates China e-commerce

A new survey says $9.29 billion was transacted in China's B2B sector

By Kristie Lu Stout
CNN.com Writer

HONG KONG, China (CNN) -- A new study reports that 99 percent of all e-commerce transactions in China are in the business-to-business (B2B) sector.

According to CCID Consulting, a Ministry of Information Industry subsidiary, China's e-commerce volume in 2000 totaled $9.33 billion.

The CCID study is the first survey to attempt to gauge China's nebulous B2B market, and industry watchers are already contesting its methodology.

The report estimates that in year 2000, $47.17 million dollars was transacted in the business-to-consumer (B2C) sector, with $9.29 billion in B2B.

QUOTE "In year 2000, Haier engaged in more than $200 million in online transactions." - CCDI researcher Dong Rui

CCID researcher Dong Rui attributes China's significant B2B volumes to increased e-commerce activity in the country's manufacturing and IT sectors -- especially by industrial powerhouses like Haier Group.

"In year 2000, Haier engaged in more than $200 million in online transactions," says Dong. The research group says there are 370 B2B Web sites and 677 B2C Web sites in Mainland China.

The majority of China's e-commerce Web sites are based in Beijing, Shanghai and Guangdong.

The report also forecasts that the B2B trading volume will increase 22.8 percent to $11.39 billion, while B2C transactions are expected to climb 233.3 percent to $157.25 million in 2001.

The CCID forecast for online retailing is slightly higher than forecasts issued by other research firms like the Beijing-based technology consultancy BDA.

BDA anticipates consumer e-commerce transactions in China to reach $151 million in 2001.

Despite the subtle difference in B2C sector findings, BDA is skeptical of CCID's conclusions for the B2B market in China.

"(CCID) is good on hardware, but not on e-commerce," says Duncan Clark, BDA partner.

"On the B2B side, we don't know what the methodology is. Is this any transaction that has involved the Web?"

B2B portal players like Alibaba.com, the popular B2B e-commerce hub, are skeptical of any attempt to quantify e-commerce transaction volume.

"You find a supplier online, you do the business offline. Is that an e-commerce transaction?" asks Porter Erisman, the Director of Marketing and Communications at Alibaba.com.

"We've stopped citing figures because they vary and are so different from the day to day operations for the Web site. We just focus on our business."

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Haier Group
CCID Consulting
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