Experience and its Comparison with Korea and China. Research Center for Advanced Science and Technology University of Tokyo

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1 Measuring E-commerce: E Japanese Experience and its Comparison with Korea and China Kazuyuki Motohashi and Takahiro Kanamori Research Center for Advanced Science and Technology University of Tokyo

2 Outline of presentation Why E-commerce E market size? Issues in E-commerce E market size: OECD definitions and beyond Survey on E-commerce E market size: Japan: METI-ECOM ECOM-NTT MGT. Studies Korea: KNSO O Surveys on EC China: CCID Comparison of results Next steps

3 Why E-commerce E market survey? Why EC market size? Direct measure of IT based economic transactions, instead of input indicators such as IT infrastructure and IT usage Important tool for understanding economic impact of IT OECD methodological work on EC definitions Come up with int l l comparable statistics WPIIS/ICCP over more than 5 years

4 OECD definition Broad definition: business transaction over any type of computer network Narrow definition: business transaction over internet technology based network (TCP/IP) broader concept as compared to e-market place Internet technology based network or Internet? Coverage of the size and the type transactions included in e-commerce

5 Narrow definition: Scope of network type Firm A s LAN Firm B s LAN Private EDI Private network IP VPN EDI Firm A s LAN IP-Provider s Network (NTT,DDI/KDD, Fujitsu etc.) Firm B s LAN VPN equipment Internet VPN EDI Firm A s LAN Internet Firm B s LAN VPN equipment

6 EC: Scope of transaction Settlement, authentication services Fess and commissions AD charges Advertising agency IS and \ communication charges IP providers, IS services IS and communication charges Charges for goods and services, Intermediary fees, subscribing fees Charges for digital contents Suppliers Intermediary commissions Intermediary Service firm Goods and services Charges for goods and services, Intermediary fees, subscribing fees Charges for digital contents Customer (firm or Consumer) Providing goods and services Money flow INCLUDED in EC market estimates Transporting cost Transport, logistics Transporting cost If this payment is done over information network, they are included Money flow NOT included in EC market estimates

7 Japanese Experience: METI-ECOM ECOM-NTT MGT. Study B2B and B2C by both broad and narrow definitions And by subcategories: e-market e place, mobile EC Annual estimate from 1998 and 5 year forecasting Data source: Small statistical survey + micro information from interviews, industry experts views, cyber malls + information from ICT Workplace Survey by METI Information by segment

8 EC stats in Korean and China Korea KNSO: Quarterly E-Commerce E Survey on Enterprise (B2B) and the Government (B2G) as well as Monthly Cyber Mall Survey (B2C) B2B and B2C by both broad and narrow definitions Information by segment No data for financial sector China CCID, CNNIC and other private firms such Accenture Information on detail methodology not available

9 Comparison between Japan and Korea In general, both data can be fairly comparable, because of using OECD definitions However there are some differences such as Korean data rely on enterprise survey, while Japanese data rely on estimates by type of goods and services in transactions Korean data do not cover financial services B2C EC: Japanese data include the transaction with significant pre-purchase purchase activities, even though actual transactions are not taken place by internet. (such as automobile and real estate)

10 Comparing the results B2B B2C GDP Japan narrow ( 0.20 ) 50.0 ( 0.01 ) 4,623.4 broad 1,629.9 ( 0.35 ) - Korea narrow ( 0.39 ) 6.2 ( 0.01 ) broad ( 0.40 ) - China CCID 15.9 ( 0.01 ) 1.7 ( 0.00 ) 1,409.9 Accenture 2.7 ( 0.00 ) 1.5 (*) 2004 for Japan and Korea, 2003 for China, billion US$

11 B2B EC in three countries B2B e-commerce in Asia 3.50 index(based on 2001) Japan Korea China year

12 B2C EC in three countries B2C e-commerce in Asia index(based on 2001) Japan Korea China year

13 B2B EC by segment Common Industrial Classification Japan Korea Chemical Metals, non-metals, and raw materials electric/ electronic/ IT-related equipment Motor vehicles, shipbuilding Construction Electricity, gas, and water supply Financial services Food Wholesale and retail trade Others

14 B2C EC by segment Common industrial classification Japan Korea Computers and computer related products Travelling Books and music Food, beverages, cosmetics, health food, and medical Home electric appliances/electronic/telecommunications equipment Clothes and fashion related goods Automobiles Real Estate Financial services Others

15 B2C EC by segment B2C EC by segment Other services Software related Communications Transportation services Insurance services Financial services Electricity and gass Paper and office Construction Automobiles Electronics equipment Industrial and precision Metals and nonmetals Chemical textiles Food

16 Future Works Detail comparison between Japan and Korea, such as sampling framework of survey Economic analysis of EC Survey for other countries Methodology in China, covering other Asian countries Feedback to OECD discussion on EC definition