Rivalry between the Two Online Shopping Companies Assignment - 1

Rivalry between the Two Online Shopping Companies - Assignment Example The researcher states that China has become one of the most attractive (in terms of profitability) international markets for making FDIs, and hence, many foreign companies have already entered in this market and other new entrants are trying to enter. However, the domestic Chinese companies have realised market potential considering the performances of the foreign companies in China. Online trading in China has come a long way. The start of China’s online or E-tailing revolution was slow because of several key issues. The political, Legal and social structure in China had many internet based companies question the profitability of setting up e-business in China. Lack of proper infrastructure also delayed the entrance of e-business in China. China lacked technological and financial backing to enter the e-business market. The main reason which made companies avoid China for their e-business was the uncertainty about the policies that the Chinese government will devise to attract foreign industries. China had an extremely low internet penetration. A very selective elite percentage of Chinese population had access to computers and internet. The legal framework regarding the laws and policies governing e-business were not stringent. Buyers often after bidding something online would back out on payment. Such casual approach discouraged many e-businesses from entering Chinese market. The buyers were often not provided with the product they had ordered for. These trends had made the buyers in China very sceptical about the credibility of online purchase. A survey conducted in 2002 by China internet network information centre (CINIC) showed that 13.9 percent of buyers in China did not receive their ordered products.