EE--commerce market in Japan commerce market in Japan & &

Comparison with Korea and ChinaComparison with Korea and China

Ding, Xiaojun, Tokyo Institute of Technology Ho, Sho, Tokyo Institute of Technology Iijima, Junichi, Tokyo Institute of Technology

Asia e-Business Workshop 2002

Introduction • Background

– the same region– the different economic systems– more and more communication & cooperation

• Goal– to offer related information so that discover the existing

obstacles or barriers– to learn valuable experiences to find proper solution of the

existing barriers– to search more elaborate framework for analysis

Outline

Overview of e-commerce

E-commerce market in Japan

Conclusion & Future work

Process of comparison

Overview of e-commerce

19002400

30003500

39004300

1100

2100

3100

39004300 4500

0500

100015002000250030003500400045005000

2000 2001 2002 2003 2004 2005

Home Mobile

E-commerce market in JapanPopulation of Internet users from home & mobile

Source: Nomura Research Institute

(10 Thousands)

E-commerce market in JapanB2B market size & segmentation

Source: ASCII Corporation

Information & electronic machinery

44.33%

Automobile 39.73%

B2B market size34,030,000 Million JPY in 2001

Automobile 18.70%

Construction 11.54%

Information & electronic machinery

24.72%

Textile & daily necessaries

8.75%

B2B market size125,430,000 Million JPY in

2006

E-commerce market in JapanB2C market size & segmentation

Source: ASCII Corporation

Estate 22.0%

Automobile 23.4%

PC appliance 10.0%

Travel 8.0%

Entertainment 7.3%

Finance 4.2%

B2C market size1,484,000 Million JPY in 2001

Estate 8.7%

Automobile 14.2%

Clothing 8.2%

Travel 14.6%

Entertainment 6.9%

Other services 15.8%

Foodstuffs 7.3%

B2C market size16,297,000 Million JPY in 2006

Process of comparison

Market ReadinessMarket Readiness

•Business

•Network •Host & PCs•Main telephone linesand Mobile cellular

•Broadband

•Internet Users

EC Market StatusEC Market Status

•Market Size•B2B•B2C

•Online Products & Services

•Payment system

•Existing Barriers•Some Considerations

Market Readiness ー Business

• Six categories in the methodology– Connectivity– Business environment– E-commerce consumer & business adoption– Legal & regulatory environment– Supporting e-services– Social & cultural infrastructure

• Four groups of e-readiness rankings (2001)– E-business leaders– E-business contenders– E-business followers– E-business laggards

Market Readiness ー Business

Source: The EIU e-business forum

E-readiness ranking (of 60) Country & Area E-readiness score (of 10)1 US 8.732 Australia 8.293 UK 8.10 71314182125263133394245464748495460

SingaporeHongKongIrelandJapanSouth KoreaPortugalGreeceArgentinaMalaysiaPhilippinesRussiaIndiaThailandVenezuelaBulgariaChinaIndonesiaPakistan

7.877.457.287.186.976.215.855.014.833.983.843.793.753.623.383.363.162.66

E-businessLeaders

E-businessContenders

E-businessFollowers

E-businessLaggards

Market Readiness ー Network

Source: ISC (www.isc.org), ITU (www.itu.int)

Country

South KoreaChinaJapanWorldWorld

Hosts (Jan, 2001)

397,80970,391

4,640,863109,574,429109,574,429

Growth (1996-2001)

13.632.817.211.611.6

Hosts/per 1,000 people(Jan, 2001)

8.40.1

36.618.018.0

Change of Internet Change of Internet --hostshosts

Estimated PCs (2001)Estimated PCs (2001)

Total (k)25,00044,40012,000117,093117,093495,366495,366

CountryChinaJapanKoreaAsiaAsia

WorldWorld

Per 100 people1.93

34.8725.143.313.318.428.42

Market Readiness ー Network

Source: ITU (www.itu.int)

Main telephone lines & Mobile cellular (2001)Main telephone lines & Mobile cellular (2001)

Country

ChinaJapanKoreaAsiaAsia

WorldWorld

Main telephone lines (k)

179,034.076,000.022,724.7391,179.0391,179.0

1,046,087.61,046,087.6

CAGR(%)(1995-2001)

28.03.43.413.613.67.27.2

Main telephonelines per 100 people

13.8159.6947.6010.8510.8517.2117.21

CAGR (%)(1995-2001)

26.93.12.412.112.15.85.8

Cellular mobile subscribers2001(k) CAGR(95-01) Per 100 people

144,812.0 84.9 11.1774,819.2 36.2 58.7629,045.6 61.4 60.84336,614.4 56.3 336,614.4 56.3 9.33 9.33 946,297.4 47.8 946,297.4 47.8 15.5715.57

Country

ChinaJapanKoreaAsiaAsia

WorldWorld

As % of total telephone subscribers

44.749.656.146.346.347.547.5

Market Readiness ー Network

• Korea– More than 60% of Korea’s households are utilizing broadband Internet.

– DSL, Cable modems, Wireless services, ADSLs

• Japan

– Number of subscribers for broadband services has exceeded 2million.

– Wireless services, Cable Internet, DSL, Fiber Optics-based services

• China

– By 2005 China will have 500 million phone users & 100 million internet users, including 20-25 million broadband users

– Ethernet to the home, DSL, cable modems and LMDS

Source: The Korea Times, Ministry of Public Management, Home Affairs, Posts&Telecommunications, EE Times

Market Readiness ー Network

• In Japan & Korea– Higher percentage of population who have used

different access technologies

• In China– Noticeable growth rate of items with regard to network

readiness

Market Readiness ー Internet Users

0

5

10

15

20

25

30

35

1999 2000 2001

JapanChinaKorea

Year

Numbers (million)

Source: CNNIC, Kiko-Net, KRNIC.

Market Readiness ー Internet Users

Source: ITU (www.itu.int)

Users (k)(2001)

33,700.057,900.024,380.0157,778.5157,778.5500,074.3500,074.3

Country

ChinaJapanKoreaAsiaAsia

WorldWorld

Users Per 10,000 people(2001)

260.00 (2.6%)4,547.10 (45.5%)5,106.83 (51.1%)

437.49 (4.4%)437.49 (4.4%)823.24 (8.2%)823.24 (8.2%)

China KoreaJapan

2.6% 45.5% 51.1%

EC Market Status ー Market Size (Asia)

Source: eMarketer

0200400600800

10001200140016001800

2000 2001 2002 2003 2004eMarketer Forrester Research Goldman Sachs

Comparative Estimates: B2B e-commerce Revenues in Asia, 2000-2004 (billion $)

EC Market Status ー Market Size(Asia)

Source: eMarketer, “The eAisa Report 2001”, Feb, 2001

B2B e-commerce by region, (in billions) (As a% of Worldwide B2B e-commerce, 2000-2004)

North America Asia/Pacific

Europe Latin America

Africa/Middle East

16%

2000

10.8%

2004

12.9%

2003

14.4%

2002

15.3%

2001

EC Market Status ー Market Size(Asia)

• Climbing absolute amount of B2B e-commerce revenues in Asia

• Slightly reduced share in worldwide B2B e-commerce market

EC Market Status ー Market Size

Source: CNN.com, ASCII Corporation, Korea Information Society Department Institute. (Unit: Million$)

9290

47.17

11390

157.25

0

2000

4000

6000

8000

10000

12000

2000 2001

B2B B2C

2367

1074.8

3090

1385.6

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2000 2001

B2B B2C

2864488,421.58

1055808

134,682.60

0.00

200,000.00

400,000.00

600,000.00

800,000.00

1,000,000.00

1,200,000.00

2001 2006

B2B B2CChinaChina

KoreaKorea

JapanJapan

EC Market Status ー Market Size (2001)

Source: CCID Consulting Co., METI, Korea Information Society Department Institute.

0 10000 20000 30000

Japan

China

Korea

B2BB2C

Million$

EC Market Status ー Online Products & Services

Source: CNNIC, ASCII Corporation, Korea National Statistical Office.

33.70%

58% books & magazines computer appliancephotographic equipment communication appliance

AV equipment living & housingclothing family electrical appliancesports equipment medical care servicespresent delivery financial & insurance servicesticket ordering educational servicesothers

22.00%

23.40%

books/music entertainment travel

PC appliance other services finance

other products estate automobile

furniture & sundry goods foodstuffs gifts

clothing

10.50%

19%books computer hardware/accessorieshousehold items cosmeticsleisure goods/hobby home appliancesCDs/music videos children goodsaccessories clothestelecommunication products gifts/ticketsaudio equipment foodfurniture computer softwarecar accessories flowers

Products /services that users had purchased in China (multiple choice)

B2C segmentation in Japan (2001)

Recently online purchased items in Korea

EC Market Status ー Payment System

Source: CNNIC, Kiko-Net, Korea Internet White Paper

onlinetransferscredit cards

e-money

others

cash & carry

online payment

post officestransferbank transfer

others

Payment methods in Korea (2000-2001)

Payment methods in China (2001)Payment methods in Japan (2001)

otherspayment specified by own providercharged directly to the bankpayment via convenience storesbank transferpostal transfercash on deliverycredit card

EC Market Status ー Payment System

• Diversification of payment methods in Japan

• Diverse payment methods are being introduced in Korea

• Inconvenient payment is one of primary obstacles of online purchase in China

0%

20%

40%

60%

80%

Existing barriers in e-commerce (Asia)

Source: Far Eastern Economic Review November 23,2000

Cannot see & touchbefore buying

Security Unattractive price

Connection speed

Cannot find thewanted goods

No internationaldelivery

Delivery istime wasting

No good navigationon website

Existing barriers in e-commerce

Source: CNNIC, The Electronic Times2001

•In Korea. Compared with B2C, B2B is not so active.•Many bills of draft•Rebate system•Strong human relationships within companies

These are conflicting with high transparency of B2B.

•In Japan. EC and Internet related companies have little English notation

•EC of Japan does not have the strong consciousness to a transnational market.

•In China (Primary obstacles of online purchase) •Security 31%•Inconvenient payment 11.8%•Quality, after service & credit of producer 30.2%•Delivery is time wasting & channel is not expedite 13.9%•Unattractive price 6.3%•Unreliable information 6.3%•Others 0.5%

Conclusion

• Rising Asia e-commerce estimates & smaller share in the worldwide e-commerce pie

• Optimistic picture & Existing barriers of e-commerce development

• Japan - who leads the Asian e-commerce raceKorea - who is a potent e-commerce competitorChina - who experiences the fastest growth

Future work

• Common fields to make comparisons & conclusion of e-commerce in the different countries are expected.

• There should be more elaborate & systematic framework of comparison applicable to these countries in Asia.

• More channels of information sources are needed to further research.

Thank you Thank you

Thank you for your attentionThank you for your attention