Factors Affecting the Adoption of E-Commerce: A Study of the Textile Industry in Wujin, China

By Chong, Alain Yee Loong; Ooi, Keng Boon et al. | International Journal of Business and Management Science, December 2009 | Go to article overview

Factors Affecting the Adoption of E-Commerce: A Study of the Textile Industry in Wujin, China


Chong, Alain Yee Loong, Ooi, Keng Boon, Tak, Yew King, ShuYang, Zhu, International Journal of Business and Management Science


INTRODUCTION

China is one of the fastest growing economies in the world. With the emergence of internet technologies, firms in China are now able to explore new market opportunities without being constraint by geographical locations. However, by engaging in businesses with companies in other countries, companies in China are also exposed with increased competitions. In order to stay competitive, many Chinese companies are starting to employ e-commerce in their businesses in order to be efficient in their business operations.

The Chinese government knows that with globalization as well as China's entry into the World Trade Organization (WTO), Chinese firms will be facing competitions. To ensure long term competitiveness of Chinese firms, the government must ensure that Chinese firms do no t compete merely on having lower costs. The Chinese government therefore has taken a lot of measures to foster e-commerce development in the recent years by improving IT infrastructure in China to ensure that Chinese firms are more productive. One of the e-commerce models that the Chinese government has employed is the "Sunan" model in Wujin. The Chinese government has placed emphasis on the economic development of Wujin as it is one of the fastest growing provinces located in the Southeast of China. Wujin is ranked by the Chinese government as a top 10 counties in terms of economic ranking (Wujin Economy and Trade Bureau, 2005).

The Sunan model was applied by the Chinese in the early eighties and it "attributes the development of Sunan to the local state-directed township and village enterprises (TVEs)" and is viewed as urbanization from be low (Wei, 2002). The Sunan model is a model that the Chinese government constantly encourages, support and helps the development of enterprises, and has existed for more than 20 y ears. The Chinese government has modified the Sunan model and name as "new Sunan model". The "new Sunan model" is an application method that combined e-commerce and Sunan model together in order to assist companies t o take advantages of e-commerce that is perceived for the world market. At present, the "new Sunan model" is mentioned and is becoming popular in Wujin.

The Textile industry is the main industry in Wujin. This industry plays a key role to Wujin's economy. The industry is currently facing a lot of challenges and business opportunities as they move toward the global marketplace (Ouyang and Li, 2005). There are several barriers of textile industry; one of the earlier barriers they faced was that they could not get enough information quickly and adequately. Today, with globalization and emphasis on fair competition, the textile industries in China are facing the challenges of China's entry to the WTO and the canceling of quota for export.

As e-commerce develops, it has profound impacts on textile industry which provides a lot of chances to them like expanding their market, and getting different information (Ouyang and Li, 2005). The textile industries are now expose themselves to the global market and are involved in worldwide competition. Therefore, the textile industry has more reasons for adoption of e-commerce to ensure their survival from the fierce competition, adding distribution channels, increasing overall sales, expanding their reach beyond local markets, or gaining greater exposure in existing markets.

The textile industry is the main contributor to Wujin's economy in terms of output, exchange earnings, the numbers of organizations and employment. Therefore Wujin's county government has placed great emphasis on improving the competitiveness of Wujin's textile industry. There are officially about 4400 textile firms in Wujin. Most of these firms are small and medium (SME) enterprises (Jiangsu Province Statistics Bureau, 2007). Given that the Sunan model's main aim is to foster SME enterprises, the government chose the model to improve e-commerce implementation in WuJin. …

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