China's Internet Use To Soar, But E-Commerce To Lag

China will have more Internet users than any other country in Asia by 2002, excluding Japan, according to new research from International Data Corp. (IDC) Asia/Pacific, a subsidiary of IDC, Framingham, Mass. The study found the Internet user population in China will reach about 9.4 million by 2002, up from 1.4 million in 1997. This surpasses Australia, which is expected to have about 5.8 million users by 2002. "With China's large market, Internet user growth was inevitable," says Pete Hitchen, senior Internet analyst IDC Asia/Pacific. "The surprise in this research was how fast China's adoption of the Internet has been. In addition, we have seen an increase in local language content for China's Web sites, which make the Internet more attractive to both business users and consumers." With a healthy growth of Internet users expected in the region, e-commerce revenue also is expected to increase. By the end of 2002 Australia is expected to generate the most e-commerce revenue in the region ($4.97 billion), followed by South Korea ($2 billion), and China ($1.87 billion), according to IDC. "The countries with higher per capita income in Asia are higher spenders on the Internet," reports Hitchen. "In the case of China, its comparatively low per capita income levels slow the growth of e-commerce spending. The clear inhibitor to the growth of China's Internet market is the speed in which infrastructure projects are put in place. China's e-commerce is expected to quickly grow after 2000 as local content on China Web sites increases and the number of business-to-business transactions grows exponentially."