E-business In China's Manufacturing
May 20, 2008
China's e-business trading
Yuan volume in the manufacturing sector reached 949.6 billion Yuan in 2007,
up by 34.9% over 2006. Drivers for growth include favorable government
policies, and manufacturing enterprises’ awareness of efficiency and cost
Large Chinese manufacturers
like Baosteel Group, FAW Group, and SAIC Motor Corporation, have played an
important role in e-business manufacturing application. They not only
utilize third-party e-business platforms, but also have established their
own e-business websites.
drive the e-business ecosystem
Supply chain optimization,
its associated efficiencies and cost savings are always an imperative for
the manufacturing enterprise. Large manufacturers have the clout to drive
their respective value chains.
Manufacturing E-Business Value
Chain In China
Source: CCID Consulting, January 2008
integrators, channels and agents, and the customer all form the various
components of the Chinese manufacturers’ supply chain. The e-business
platform enables efficiencies through better and more current information
exchange, more accurate and scaleable transactions, and hence more efficient
Moreover, the e-business
platform, whether provided by the manufacturer or third parties, must
realize revenues or cost savings in the long term.
Three business models
emerge in China
CCID Consulting sees
primarily three e-business models now, which are the Integrated E-business,
Vertically Targeted, and Manufacturer Originated platforms.
comprehensive enterprise information, product information, research,
and third-party B2B and B2C e-business trading services. There is some
movement towards e-business website building and hosting.
Value-added Service Fees
vertically targeted product information and e-business trading
Value-added Service Fees
services for the benefit of the manufacturer, suppliers, and
customers, including online sales, procurement, logistics management,
finance, research, subsidiary/supplier trading and other value-added
due to more efficient supply chain and direct customer sales.
Source: CCID Consulting, May
Solid growth potential,
but challenges remain
With the current
developments thus far, CCID Consulting sees continued e-business development
and Yuan volume growth in manufacturing. However, e-business adoption is
still low, and applications narrow.
For commercial enterprises,
CCID Consulting sees continued emphasis and development in the following:
- Improve e-business
- Expand scope and
penetration of e-business applications. One particular area is mobile
e-business, which has better potential to reach smaller, upstream
- Strengthen the
infrastructure building for e-business applications.
CCID Consulting also
believes China's government can play an important role, through policy and
regulation, in facilitating manufacturing e-business development:
- Provide common standards
for e-business trading.
- Encourage more market
discipline in various business models.
- Improve the logistics,
payment and financial environment.
For more information
contact us for these and
other China-related data, information and products.
Unless otherwise specified,
all information provided is sourced from CCID Consulting.