November 2008 Archives

China may now be a country with the largest Internet user population as well world's No. 1 mobile market. However, when it comes to e-commerce, particularly business-to-consumer (B2C), it is still in its infancy.  For instance B2C market accounts for less than 1 percent of the total e-commerce market and so far, the only place where consumer-related online commerce that has performed well has been online gaming led by companies such as Shanda and Giant Interactive.

Experts say that one reason why e-commerce hasn't taken off yet is that despite impressive potentials, merchants in China have not yet applied e-commerce as their principal channel to grow their business and therefore pave the way for e-commerce as a whole.

But the other important inhibiting factor has been the fact that Chinese Internet users fear fraud and generally have low trust of B2C commerce. Consumers, say experts, usually prefer to limit themselves to only large companies or brands.

But that may be changing. With the government and authorities trying their best to push China's merchant to adopt IT for doing business, and consumers shedding their online fears, B2C e-commerce is picking up fast. According to China Internet Network Information Center's (CNNIC) latest Internet Development Report, with the growth of Internet, use of practical applications such as online shopping is becoming popular as well, as the China's netizens are increasingly drawing the Internet out of the virtual world and bringing it close to their real life.

CNNIC said that currently with about 63 million Internet users using the Internet for online shopping, close to a quarter of its population use the Internet for B2C e-commerce. And although Shanghai is the only city where most of the e-commerce transactions still happen, slowly online shopping is spreading to their regions as well.

Clearly a number of companies, from local companies to global biggies, are making a beeline in China to cash in from the new opportunity. And the latest one to join the fray is Nokia Siemens Networks, (NSN) one of the leading global enablers of communications services.

NSN announced today that in collaboration with Fujian Mobile -- a subsidiary of China Mobile Group -- the German-Finnish telecommunications infrastructure giant is running an "innovative" e-commerce platform in the Fujian Province of China that promises an important link between rural consumers and urban businesses.

According to Josef Lorenz, head of innovations, NSN this project is unique in the sense that it sets up an e-commerce platform in the existing shops in the rural areas where its residents can visit to buy goods online. "This will help them buy products for which they either had to travel or could not get at all," says Lorenz.

Fujian, situated along China's southeastern coast with population of approx 40 million, is one of the first cities in China to be classified as a Special Economic Zone. However, according to Lorenz, despite being an important economic zone, Fujian has no significant e-commerce platform primarily due to lack of connectivity and the absence of a payment link.

For instance, according to rough estimates, while the average Internet penetration rate is about 27 percent in urban China, its reach in rural Fujian is about 7 percent.

'Which is why the uniqueness of this model is not so much in the application but in the business model," says Lorenz, adding that this e-commerce platform provides an integrated end-to-end service, which contains an online Catalogue Sales Platform (CSP), on which merchants from even a far away Chinese city can upload their products for marketing to rural customers. The service is delivered to villagers through local entrepreneurs or retail stores, who provide shared Internet access to the online shopping platform

"This platform shopping model challenges traditional ways of conducting business and purchasing goods in remote locations -- villagers gain access to a wider selection of reliable consumer products and urban suppliers are provided with a new sales channel reaching the mass market in villages," adds Lorenz.

NSN, says that this platform has been a pilot project for the past 5 months in 4 Fujian villages But in about a year's time, it should see a roll-out throughout the province.

"When done, this platform will open new doors for villagers and retailers in Fujian province," says Lorenz, adding that the main objective of the project is to establish a new business model for rural e-commerce, where, using ICT, rural Chinese people can get better access to their needs in life, at better prices. "ICT then can become more efficient and improve wealth and lifestyle in China," he added.

Besides, says NSN, this project will also enable small and medium-sized retailers and distributors to improve their business efficiency, and offer a wider product range. In addition, it could spawn potentially powerful new business model of Business to Business to Consumer (B2B2C) services that will help Chinese merchants to improve local presence in rural areas.

Usually the High-Level Segment (HLS) meeting of the ITU - the Geneva, Switzerland-based United Nations leading agency for information and communication technologies that acts as the global focal point for its 191 Member States and more than 700 Sector Members - is an annual event that provides its Councilors with an opportunity to exchange views on issues of emerging trends in the ICT sector.

But this year's HLS segment meeting held over two days on November 12 and 13, was particularly notable for drawing attention and addressing two of the most burning issues in the cyberworld today: ensuring that the online world is a safe place to work and play, and the role ICT can play in the critical area of climate change.

ITU feels that climate change is emerging as a profound challenge because it is  transforming the face of the world. ITU believes that Information and communication technologies (ICTs) can play a critical role in combating climate change through mitigation of its effects and the reduction of greenhouse gas (GHG) emissions. Not least is the fact that the growing use of ICTs contributes to global warming, For example, the many billions of mobile phones, often left to charge overnight. But moreover, ICTs are also a key part of the solution, in monitoring, mitigating and adapting to climate change.

But, points out the ITU, while ICT contributes around 2.5 percent of Green House Gas emissions, with 40 percent of this deriving from the energy requirements of personal computers and data monitors, plus a further 23 percent from data centers, it also has the potential to assist the remaining 97.5 percent of the global economy in reducing its emissions through such things as telework and teleconferencing.

Another area that ITU feels requires immediate attention is the alarming rate of the growth of crimes conducted online. While elders always warn children about whom to speak to and where to go in the world of bricks and mortor, too few are aware that children need to exercise a similar level of caution in the cyber world.

In this year's HLS meeting, ITU launched a new and "a significant" initiative to safeguard children, whom it considers the most vulnerable users of the Internet. Called the Child Online Protection (COP), this initiative brings together partners from all sectors of the international community with the aim of creating a safe and secure online experience for children everywhere. While the virtual world offers unlimited opportunities in many respects, it is also the hunting ground for cybercriminals and paedophiles.

According to ITU the world moves forward towards an all-inclusive information society it must also ensure that children everywhere can enjoy the benefits of ICTs while being protected from the risks posed by inappropriate use. And in that regard, "It is vitally important that children across the world can go online safely and ITU's Child Online Protection initiative is a significant step in that direction," says Rob Conway, CEO and Member of the Board of the GSMA.

COP has an impressive agenda (keep an eye out for an indepth analysis of this initiative in the feature section to be published soon) and aims to be a platform for global cooperation as well as to coordinate efforts behind protecting children online and make them more effective and accessible.

Underscoring its importance ITU also plans to hold the first World Congress on Child Online Protection in 2009 in Geneva.

The International Telecommunication Union's global cybersecurity agenda that has been in the making for the past 18 months will finally see the light of the day in a few days from now.

The ITU -- the United Nations agency for information and communication technologies -- has announced that in this year's meeting of its 46-member council, to be held in mid-November, it will operationalize its Global Cybersecurity Agenda (GCA). This aims to provide ITU's 191 member nations with the expertise, facilities and resources to enable the global community to effectively address the most serious forms of cyber threats.

Launched on 17 May 2007, GCA is an ITU framework for international cooperation for crafting and implementing solutions to enhance confidence and security in the information society.

According to Geneva-based Alexander Ntoko, head of the Corporate Strategy Division, ITU, although there are many large, or even global-scale initiatives on cybersecurity, there isn't yet one that builds an international framework of cybersecurity principles and best practices that countries around the world could follow, maximizing and coordinating efforts to stamp out cybercrime.

"There was a feeling that more needs to be done and much more could be done." says Ntoko, "And GCA stems from exactly that realization."

He adds that GCA is unique in the sense it aims to link all existing initiatives and provide an overarching framework for consensus, which will allow a coordinated set of actions to strengthen cybersecurity on a global basis.

For effective implementation of this agenda, ITU has also tied up with International Multilateral Partnership Against Cyber-Terrorism (IMPACT), a Kuala Lumpur, Malaysia-based organization that claims to be the first global public-private initiative against cyber-terrorism.

In the high level meeting of the ITU council -- which is something like a board meeting of a company -- scheduled for November 11th and 12th, "the IMPACT-GCA" initiative will be ratified

The collaboration is aimed at building synergies to provide: real-time analysis, aggregation and dissemination of global cyber threat information; early warning system and emergency response to global cyber threats; and training and skills development on the technical, legal and policy aspects of cybersecurity.

GCA will be housed and operate from the IMPACT Centre in Kuala Lumpur, but it will also maintain  ITU's 'virtual showcase' in its headquarters in  Geneva, from where it will expand and evolve over time to increasingly provide services in ITU's GCA.

"The IMPACT-GCA collaboration is notable because it will result into the first early warning system for cybercrime," says Ntoko adding that the council meeting will also reveal the responsibilities and the action plan of the IMPACT-GCA collaboration.

Besides launching the IMPACT-GCA collobaroation, the November's  meeting is also significant for the fact that it will announce ITU's first online protection plan for children.  "As many as 60% of children and teenagers use online chatrooms regularly, and evidence suggests that as many of three-quarters of these may be willing to share personal information in exchange for online goods and services. In some countries, as many as one in five children may be targeted by a predator or paedophile each year. These trends are increasingly true in many emerging and developing countries as well," says ITU.