China Holds Internet Dragon By Tail

By Tom Steinert-Threlkeld, Inter@ctive Week GUANGZHOU, China, 15 May, 2000 - She has a modest booth on the fifth floor of the sixth building, in the "articles of everyday use" section of the China Export Commodities Fair here. She's barely been on the World Wide Web for a month,but Huang Wei has the patter down.

By Tom Steinert-Threlkeld, Inter@ctive Week

GUANGZHOU, China, 15 May, 2000 - She has a modest booth on the fifth floor of the sixth building, in the "articles of everyday use" section of the China Export Commodities Fair here. She's barely been on the World Wide Web for a month, but Huang Wei has the patter down.

Where her neighboring merchants push paint brushes and other "animal by-products," Huang is promoting her candle business as a global enterprise, called Candle-China.com. With her online presence, she figures she can tap into a US$20-billion-per-year market in the U.S.

But Huang hasn't lit any fires, yet. She's only had five or six inquiries to her Web site, thus far. For almost all Chinese exporters, it is still much more likely that they will record big chunks of business from face-to-face negotiations with customers who walk in on the show floor than from those who somehow find their way to the companies' Web sites. Indeed, outfits such as the Guangzhou Sino Machinery & Tools think so little of the Web that the last time the company updated its Web site was three years ago, a salesman said.

Candle-China remains the exception, rather than the rule, among the exporters that gather semi-annually in Guangzhou to strike deals with buyers from Europe, India, the Middle East and North America.

Outside the 14 buildings that comprise the show floor space, developers of business-to-business (B2B) exchanges are ardently wooing merchants such as Hubei Ziantao Woolen and Textile to join up. At bus stops, on billboards, on walkway posts and on cafes‚ umbrellas, the ads for Alibaba.com, Madeinchina.com and rivals are everywhere.

But inside it's another story. Many companies don't see the need to use the Internet to jump start their industries and increase their global competitiveness. They think they're already part of the only B2B exchange that counts: the one where deal making happens on the spot, under one roof, through the spoken word.

"The fair is better than the Net," said Wei Bi, senior engineer and business manager at Beijing SNL Trading "You are talking to people face-to-face."

Indeed, it will be a long time before the online exchanges begin to have any real impact on the amount of business Bi does at a show like this. Deals at the Guangzhou shows account for almost all of the 200 plastic packaging machines his US$4-million-per-year business sells. And 40 percent of that already comes from other parts of Asia, Europe and the Middle East.

Bi's indifference to the Net is understandable. Mainland China has yet to become a wired nation. Of 343 million households, only 19 million - about half of one percent - have personal computers. Only about 7.2 million have access to the Web.

 

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