On Credit-Building Up in E-Commerce Environment

On Credit-Building Up in E-Commerce Environment WANG Guo-An (Andrew) Professor of International Trade Vice Director of International Affairs Office Zhejiang Gongshang University, China Fax: 86-571-28877312 28008050 E-mail: wangguoan@mail.zjgsu.edu.cn Alternative e-mail: tradelaw@hzcnc.com www.zjgsu.edu.cn http://econet.zjgsu.edu.cn/andrew.wang/index2.htm 阿里巴巴版权所有 1999-2005

Outline • The development of e-commerce in China • The flow of information, logistic and capital in e-commerce • The three major barriers in e-commerce development • Credit-build up in ecommerce 阿里巴巴版权所有 1999-2005

Enlightenment period（1994--1997） On April 20, 1994 China was officially recognized as one of the Internet members in the world. From the spring of 1995, Internet services began to be available to the general public in China. In January 1995, a group of young pioneers headed by Mr. HE Yi-bing and Mr. Jack MA, the boss of Alibaba.com crashed into this brand-new field. The characteristics of the e-business environment for the pioneers • Few knew the Internet • Business leaders were very reluctant to spend money on Internet ventures • No laws or rules at all available regarding e-business in China • Internet infrastructure was very poor and undeveloped 阿里巴巴版权所有 1999-2005

Application and rapid development period （2001--now） Wide Internet applications in all sectors after 11 years of development Search engine, online education, online banking, online auction, Internet Ads, online news, online VOD services, free and charged email services, SMS, online recruitment, online information and online gaming are available. Foreign trade firms, security companies, financial institutions, airline ticket booking, hotel reservations, banking services, colleges and universities are computerized and they conduct much of their day-to-day business online. 阿里巴巴版权所有 1999-2005

Chinese e-commerce development until now • Website +e-mail +promotion=e-commerce • Website +e-mail +promotion +sale online=e-commerce • Website +e-mail +promotion +sale online+ payment online=e-commerce 阿里巴巴版权所有 1999-2005

What is your greatest concern when you go shopping online? Poor commercial credit and lack of mutual trust The greatest concerns for the Chinese netizens are poor quality of online products, poor after-sales services, poor credit of the producer, unreliable online information, inconvenient payment methods and delayed delivery and lack of a nation-wide credit assessment system has to be set up. (China Internet Information Center ( http://www.cnnic.cn) 阿里巴巴版权所有 1999-2005

The importance of commercial credit online Zhang Weiying , a professor of Guanghua School of Management at Beijing University, argued that the Internet dramatically decreases the cost of production and obtaining business information, but makes the identification of the reliable information very difficult at the same time. So it is urgent to set up an enterprise credit evaluation system, without which we can not conduct e-commerce. E-commerce is based on credit and mutual trust, without which no transactions can be concluded. • Sources: Netizens Storm in 2004——Research report on Chinese Netizens 阿里巴巴版权所有 1999-2005

Case：Establishment of Trust Pass Community at alibaba • AV certification • Transaction behavior valuation • Time accumulation • Supervision of e-community • Files of Trust Pass • My Trade Activity • Index of Trust Pass 阿里巴巴版权所有 1999-2005

Ways to build up the credit of the enterprise online Cultivation the fame of the enterprise and the brand name Certification by the third party Professional degree of e-commerce Information transparency and openness Trading maturity Third party payment platform 阿里巴巴版权所有 1999-2005

Professional degree of e-commerce • Construction of the website • Providing updated information • Careful attention to enquiries and offers efficiently • Prompt reply to e-mail messages • Satisfactory after-sale service (return policies) 阿里巴巴版权所有 1999-2005

Information transparency and openness • Information of the related products: prices, designs, color, models etc.. • Information of the related company: business license, business scope, history, registered capital etc.. • Certification of the products and the company: ISO9000 (quality) ISO14000 (environment) ISO18000 (safety) QS ( food quality safety in China ):effective on August 1, 2003, in strict conformity with those of the USA, EU and Japan. SA8000 is compulsory in the USA and it attaches importance to social responsibilities of the enterprises. TL9000 (telecommunication) 阿里巴巴版权所有 1999-2005

Third Party Payment at ww.taobao.com.cn or alipay Third party 2. pay to third party 3.instruct seller to ship 5. Inspect the goods and tell the third party to pay 6. pay to seller buyer 4. effect shipment seller 1.determine the required product 阿里巴巴版权所有 1999-2005

Establishment of credit and mutual trust online • E-business legislature • Online payment system among banks • Online national enterprises evaluation system • Building up the credit by the enterprise itself is the key 阿里巴巴版权所有 1999-2005

Thanks for your attention ! WANG Guo-An (Andrew) Professor of International Trade Vice Director of International Affairs Office Zhejiang Gongshang University, China E-mail: tradelaw@hzcnc.com http://econet.zjgsu.edu.cn/andrew.wang/index2.htm 阿里巴巴版权所有 1999-2005

On Credit-Building Up in E-Commerce Environment