Dr. Kaiquan ChenDr. Kaiquan ChenTDV Inc.TDV Inc.

Board chairman Board chairman

20/09/0120/09/01

Dr. Kaiquan ChenDr. Kaiquan ChenTDV Inc.TDV Inc.

Board chairman Board chairman

20/09/0120/09/01

E-Commerce in ChinaE-Commerce in China

EC in China

• Internet market develops rapidly in China• The enterprises demand on EC intensively

in China • Enterprises’ investment in EC changes to

maturity and application• Market structure of E-commerce in China• Mobile EC market developes rapidly • The development of EC in China

Agenda

No.1

EC in China

Basic Establishment of Communication Develops Rapidly

Amounts of telephone develops rapidly in China, it will be 156 mil. by year

2000. Mobile telephone amount will be 72 mil.

0

50000000

100000000

150000000

200000000

250000000

300000000

1996 1997 1998 1999 2000 2001 2002 2003 2004

Fixed Line Mobile

Source: MII, 2000

No.2

EC in China

Internet customers will exceed 100 mil. by 2005, include mobile internet customers.

Internet Customers Market Develops Rapidly

Source: CNNIC, 2001

16.9327.08

39.62

56.32

76.58

100.91

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005

Internet Uesr Million

No.3

EC in China

Internet Customers Market turn to maturity

The lastest data of IDC indicated normal Internet customers has reached 61.9% in China,but it was 36% in 1999.

Others38.1%

PRC NormalcyInternet User M

61.9%

Source: CNNIC, 2001

No.4

EC in China

Abundant,convenient and protean Mobile Terminal

Mobile

MP3 Player

(with download function)

Home stakeout and control(with system movement and report function)

Digital Camera(with data exchange function)

Notebook

Wirlless PIM

PDA

World will be changed by Mobile Internet

Car (with data information and entertainment system)

Icebox(with information

board controled by mobil phone)

Mobile Secretary

Carry-home Game Player(with network

play and select function)

No.5

EC in China

Basic conditions of E-Commerce have been built

• The Chinese government promote EC-market actively• Byelaw of Internet and security of communication network

comes on conjointly• Constitute the laws of EC actively• Commercial banks found bank-online and China Finance

Center of Authentication (CFCA)• Commerce dept. of government and large scale state-owned

enterprise connect the Internet actively• Little enterprise’s local IT basic construction level raise

quickly• Appeared new mode of EC like eMarktplace etc.

No.6

EC in China

The level rises promptly that the enterprises cognize electronic commerce

98%

8%2%

92%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yes No

% o

f R

esp

on

den

ts

Asia Pacific China

Source: CNNIC, 2000

In condition of the in-depth market education and intense market competition, there are 92% enterprises which need EC in China,that can raise competition ability.But there are only 34% that enterprises need EC in the same research in 1999.

No.7

EC in China

It raised intensely that the enterprises demand EC

48%

44%

7%

41%

38%

21%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Web SiteMarketing &

Service

eCommerceApplications

Other

% o

f R

esp

on

den

ts

Asia Pacific China

Source: CNNIC, 2000

There are 41% enterprises that have started the market propagandistic campaign online who have their owned net-site, and there are 38% that have started the application of EC

No.8

EC in China

Investment in IT of enterprise has been changed

19%

66%

15%

21%

45%

34%32%34% 34%

26%

34%

40%

0%

10%

20%

30%

40%

50%

60%

70%

Hardware'99

Software'99

Services'99

Hardware'00

Software'00

Services'00

% o

f R

esp

on

den

ts

Asia Pacific China

Source: CNNIC, 2000

Investment in IT of enterprise has been changed in 2000 in China,it increased in software and service,which indicated the mature of IT construction of the Chinese enterprises

No.9

EC in China

35%

29%

25%

4%

26%

37%

10%

20%

7%8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

ERM/ BackOffice

CRM/ FrontOffice

DataWarehousing

eBusiness Other

% o

f R

esp

on

den

ts

Asia Pacific China

The change of investment for electronic commerce of the enterprises

For meet the development of EC in China,the emphases of investment have been changed that changed from solicitude enterprise outside to perfect the enterprise chain of supply & demand, build enterprise electronic commerce platform step by step .

Source: CNNIC, 2000

No.10

EC in China

Year90

Revenue

US$B

eMP

eP/eD

150

25

50

100

eInfo

There will be $133G in B2B market of EC in China by 2005,which will be implemented with eMarketplace mainly.

95 00 05 10

Development process of E-commerce in China

Source: CNNIC, 2001

No.11

EC in China

The revenue of EC in China will enlarge rapidly

The revenue of EC in China will be $150G,CAGR will be 134% by 2005

Source: CNNIC, 2000

2,191 5,64813,865

31,899

71,018

152,740

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2000 2001 2002 2003 2004 2005

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%PRC eCommerce Revenue US$M

Growth %

No.12

EC in China

The construction of E-Commerce in China

0

20000

4000060000

80000

100000

120000140000

160000

180000

2000 2001 2002 2003 2004 2005

PRC B to B PRC B to C

Source: CNNIC, 2001

2000 2001 2002 2003 2004 2005 CAGRPRC eCommerce Revenue US$M 2190.6 5647.7 13864.9 31899.4 71018.5 152740.1 134%PRC B to B 1686.2 4333.5 10769.6 25839.8 59769.5 133109.3 140%PRC B to C 504.4 1314.1 3095.3 6059.5 11249.0 19630.8 108%

No.13

EC in China

$1,500

Internet Uesr M

25

5

10

15

The income of more than 53%Chinese Internet subscribers is between 1500－ 2500 US$

$3,000 $6,000 $12,000 >$24,000

China VS U.S. in composing of B2C market

Source: CNNIC, 2001

US

Income/Y

PRC

No.14

EC in China

The forecast of Mobile EC in China 2000-2005

The forecast of Mobile EC market in China ( US$ Million)

2000－2005

1.10 15.88 99.39396.74

1022.75

2325.46

0

500

1000

1500

2000

2500

2000 2001 2002 2003 2004 2005

Ma

rket

tra

de

qu

an

tity

The forecast of M obile Internet 2000 2001 2002 2003 2004 2005Total（$） 1.1M 16M 99M 390M 1G 2.3G

No.15

EC in China

Development process of EC in China

19961996 19971997 19981998 19991999 20002000 20012001 20022002 20032003 20042004

2000 – 2005

integration

additional characteristic

SCMCRMindustryfunctionCustomizationindividuation

1998 - 2003transaction processingadditional characteristicB to CB to BEDISCPERPSelf-help service

1997-2000 interactive additional characteristic

Intranetinteractiveindividuation Basic EnginePoint connect

1996-1999 Info express

Market infoProduct info

Source: CNNIC, 2001

No.16

EC in China

Manufacturing

Distribution &Order Management

Logistic& Transportation

Supply ChainManagement

Organization

Enterprise Resource Planning

Customer Contact Center

Customer Marketing

Management

Sales Force Automation

Customer RelationshipManagement

SUPPLIERS CUSTOMERS

Developing EC in China

eBusiness

No.17

EC in China

The development tendency of the electronic commerce market in China

• Develop EC internally and externally– Enterprises should improve their internal management

across-the-board for development of electronic commerce and establish adaptive operation platform for electronic commerce environment

• Lighthouse’s effect– The large scale enterprise will bring along medium or

small enterprises to apply electronic commerce,there will come into being a new chain of supply and demand based on electronic commercial platform between the enterprises

• Success will come when conditions are ripe– The improvement of external environment will be a good

channel for electronic commerce– Electronic commerce companies build “cargo ship” for

electronic commerce – Electronic commerce will start by enterprises’s in-house

requirement which like water

No.18

http://www.tdv-tech.com

Kaiquan Chen

TDV Inc.

Board chairman Tel: 86755 6551282

Fax: 86755 6551283

E-mail: info@tdv-tech.com

http://www.tdv-tech.com

Kaiquan Chen

TDV Inc.

Board chairman Tel: 86755 6551282

Fax: 86755 6551283

E-mail: info@tdv-tech.com

Thank you!

Thank you!

Q & A