CRI听力:Challenges ahead for B2B, C2C Development in China

In 2011, B2B trade volume reached 4.9 trillion yuan, witnessing a 29 percent increase compared with the same period a year earlier.

Li Wei, vice CEO of "trade2cn.com", a website operated by the China International Electronic Commerce Center within China's Ministry of Commerce, provided an analysis as to how businesses would benefit from the business-to-business platform.

"The B2B model reduces the complicated work procedures between businesses, starting from gaining knowledge of an enterprise, making a comparison of commodities provided by different businesses, to signing a bill and consignment. Meanwhile, the management costs, particularly the costs in small and medium-sized enterprises, would witness an obvious drop under the B2B-model. Therefore, this model would significantly reduce a business' expenditure in its daily operations."

At the same time, Li Wei also listed a number of barriers that Chinese companies need to overcome if they want to succeed and progress.

"At present, the current law, credibility gap, online payment system as well as general security pose big challenges to China's B2B sector. And without a complete system to support its growth, the drafting of relevant laws to regulate the e-commerce industry still lags behind the rapid growth of the information industry."

However, Hai Lan, CEO of auto news website chexun.com, thinks that the B2B platform, which has linked factories with dealers directly via the product-line on a small scale, is not a suitable choice for the auto industry. In her opinion, there is a much bigger chance for this industry to develop via a C2C platform.
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"The trade of second-hand cars in other countries is all conducted through C2C platforms, which demands a perfect credit system. For instance, when I am buying a second-hand car, I should be provided with the car's entire history, reliable records, which I can trace back."

Despite China's large population, the percentage of people buying and selling goods online is far below rates in Europe, the U.S., and even other Asian markets; where online shopping penetration rates can reach upwards of 60-80 percent. China's C2C model is still in its construction period. Hai Lan explains the major obstacles for the development of such a platform, using the auto industry as a prime example.

"Due to the incomplete credit system, which leads to a lack of reliability in online trade, and the government policy restrictions, I think China's C2C platforms are far from satisfactory."

With 38 percent of Chinese consumers shopping online at present, the China Internet Network Information Center has previously predicted that online retail sales could reach 3 trillion yuan by the end of 2012.

For CRI, I'm Xu Fei.