Sage and his team from Pacific Epoch did a great job organizing last night’s talk on e-payment universe in China – unfortunately, the three panelists (99bill / Smartpay / Yide), while nice guys, were about as interesting my 5th grade Latin teacher.
In hindsight, as I review my notes, I realize that their lethargic attitudes totally reflects their universal opinion of the China e-payment and e-commerce environments in 2006 – FLAT!
To be more exact, I think the boys on the panel harmonized that “…2006 was not going to be the breakout year for e-payments in China…” and the “…e-commerce would likely not gain traction until specific regulations are relaxed and customers learn to trust online retailers…”
My general China e-commerce thesis assumes the catalyst sparking e-commerce/e-payment’s break out (i.e. fantastic rampage) will be when vendors start accepting returns and replacing broken products. If you look at the US model, for example Best Buy (who operates stores in China), I whole hearted believe their value add to the customer goes beyond “pricing” — quite simply it is customer service (including knowledgeable staff and after-service support).
This model doesn’t exist in China (or Hong Kong, for that matter) but it should — manufacturers need to make retailers more accountable for the products they sell — this would not only improve overall customer experience, but also demonstrate a certain level of “buy-in” from the vendor with regards to building a long-term relationship with their customers – (i.e. TRUST)!
With that said, there were some interesting “bits, pieces and sound bites” that are worth noting. I’ll list them in a Q&A format:
Q1. How many users has your company signed up?
(a) 99bill: 4m
(b) Smartpay: 500k
(c) Yide.com: 600k — also, 65% of all Yide transactions are conducted through an e-payment provider, this is up from 40% in 2004
Q2. What % of China’s Internet users purchase goods/services online (e-commerce)?
(a) 99bill: Latest data reveals 15-20% of all Internet users
Q3: What are the major obstacles confronting e-payment moving forward?
(a) 99bill: (i) consumer trust, (ii) logistics, and (iii) weak user experience
(b) Smartpay: (i) government regs
(c) Yide.com: (i) size of transactions limited to RMB1,000/day, yet Yide’s average order is about RMB1,200 – to process this order, Yide is must split the transaction into two
Q4: After mature content and gaming, what is the most popular good/service purchased online?
Split between clothing and jewelry