January 17, 2008 -- Electronic commerce (e-commerce) took great strides forward in China in 2007, with a new B2B commodities exchange, more ways for consumers to sell products to one another online, and new online operations by major retailers in China, including Carrefour.

Yiwu2.com, the new commodity B2B online trading website, provides transaction information and brokerage service to the clients over 200 countries and regions. The website's main focus is on Yiwu city, a small commodity market city in Zhejiang, a province in southeastern China.

"B2B trading combines online posting information and visible stores," Yiwu2.com spokesman Jian Liu told Emerging China.

Yiwu2.com currently serves more than 36,000 small local retailers and buyers from over 200 countries and regions, according to Liu.

The platform links Yiwu's small retailers with the rest of the world, he said.

"Electronic commerce is at a growing stage, especially as the electronic business infrastructure is developing rather quickly," Wenli Yuan, senior analyst of Celent LLC, a global research company, told Emerging China.

E-commerce has increased its presence in both traditional retail and international retail enterprises over the past few years and last year in particular.

"There was cross integration between traditional retailers and e-commerce in 2007," Zhongming Zhang, general manager of ProBIZ Software Technology Co., Ltd., a Guangzhou-based e-commerce technology company, told Emerging China.

The retail industry of household appliances, clothing and jewelry were the pioneers of B2C e-commerce solutions, according to Zhang.

Local retailing and home appliance companies Gome and Suning Corp. also had successful experiences in implementing an online system, according to local media reports.

Gome Electrical Appliances Holdings Ltd. launched its online shop in early 2003, while Suning Appliance started its online shop in 2006.

As for international retail giants, Carrefour China opened its first online store in 2006 [e-shop.carrefour.com.cn]. So far, there are six cities that are available for online shopping.

Online sites for first three cities -- Beijing, Qingdao and Wuhan -- opened in late 2006. Carrefour began serving Chengdu, Tianjin and Shanghai online consumers in 2007.

"The main disadvantage in developing retail e-commerce is [that it is] difficult to guarantee the quality of retail products. Several years ago, payment and delivery were the main problems that needed to be tackled with. But now there are some payment and delivery models that have already proven successful," said Celent's Yuan.

Some samples of successful online payment solutions include Alibaba's Alipay, Ebay's China Escrow Payment [AnFuTong] and PayPal China, according to Yuan.

An example of a successful delivery model is D1.com.cn, a comprehensive online store that supplies buyers with many different delivery options, including express delivery, the postal service, freight delivery, and home delivery, Yuan adds.

Not all traditional retailers have embraced e-commerce in China, however.

"Compared to Carrefour China, Wal-Mart Stores Inc. seems a little slower in the e-commerce business," Hai Ye, an analyst with ProBIZ Software Technology Co., Ltd., told Emerging China.

The logistics are very critical to the development of e-commerce for the retail industry and, as of now, Wal-Mart hasn't finished their logistics in China yet, according to Ye.

Wal-Mart China spokesperson Nikita Huang, confirmed that the company hasn't yet started its e-commerce business in China.

In addition to shopping with online retailers, people in China can now buy from one another through consumer-to-consumer (C2C) e-commerce channels.

Taobao.com and Eachnet are typical examples for the application of C2C e-commerce solutions, according to Celent's Yuan.

"I'm a big fan of online shopping, my favorite online store is Taobao.com," Wenda Li, a 24-year-old college student studying international finance at Wuhan's Hubei University, told Emerging China. "Online shopping is always much more convenient and easy to access, and I can avoid the long line at the checkout."

According to Yuan, e-commerce is not about just putting up a website – it requires a complete ecosystem that includes payment, delivery, communication and even culture.

"Once the culture is formed, people will enjoy selling and buying online, and the online buyers will finally decrease the usage of traditional buying channels, thus affecting the traditional retail industry of China in the long run," Yuan said.