Chinese Government Enters the Online Ecommerce Market

Yet another eCommerce site is being launched in China. This time it is the Chinese Government getting into this Digital Internet space. It was reported today in China Tech News that Zhengjiaweb.com, is a new B2C portal website being jointly promoted by China’s Ministry of Science and Technology and Ministry of Commerce.

The website, which is jointly created by China International E-commerce Center, Guangzhou Zhengjia Network Modern Service Company and Guangzhou Zhengjia Square, is expected to open formally in June this year.

According to Lin Jianguo, chief operation officer of zhengjiaweb.com, the project will be completed in three schedules with a total investment of about CNY1.6 billion. The part that will see an opening in June is the first phase of the project and will consist of about 20 channels centered on retailing. Lin says that different from Alibaba and Taobao.com, zhengjiaweb.com is strictly a B2C website, so all the businesses on the website must also have offline stores. To ensure goods quality, the website will cooperate with four logistics companies of EMS, ZJS Express, YTO Express and Shentong Express and have the businesses undertake the goods delivery fee acquisition.

Zhengjiaweb.com will be first based in Guangzhou and it will later expand across the country with branches set up in Beijing, Shanghai, Chengdu and Wuhan. Lin introduces that the Beijing branch will be set up in July, Shanghai branch in October, Chengdu branch in February 2009 and the Shenzhen branch in July 2009.

The company plans to get its businesses fully listed in Nasdaq between June 2009 and December 2012. Given this move by the Chinese Government to enter this growing online Ecommerce market it will be interesting to see how the share market responds to his move…. Will the Government want to go into other parts of the eCommerce space over time, will we see Alibaba and Baidu price get hit as they also have aspirations of monoplizing eCommerce in China…. or will the market take a watch and wait approach.. hard to predict in this turbulant time.