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China surges ahead in internet growth

John Zarocostas in Geneva

Despite the burst of the information technology bubble, the sector is expanding rapidly in many developing countries, with China surging ahead in the growth stakes, according to a UN report.

This robust growth is largely spurred by less developed nations' determination to catch up in areas such as the Internet, e-commerce and mobile telephony.

In 2001, new internet users in China increased by 11.2 million or 49.8 per cent to 33.7 million (and some estimates put the figure now at 56.6 million); in South Korea, by 28 per cent; India, 27.3 per cent; Brazil, 60 per cent; and Kenya, by 150 per cent, says the report "E-commerce and development 2002," by the UN Conference on Trade and Development.

Internet user penetration rates of poor nations, however, remain low, it said, and accounted for nearly one-third of new internet users in 2001. The numbers are expected to continue to rise.

The global internet users at the end of 2002 will reach 655 million and could climb to 941.8 million by 2005, according to estimates cited in the report.

The IT push is also expected to provide new opportunities and challenges for the United States and other industrial countries, currently struggling to cope with sluggish demand.

Indeed, American off-the-shelf software, says the report, accounts for 70 per cent of the world market, and last year US software exports were worth $60.7 billion, sharply up compared with $29.1 billion in 1995.

On the downside, US losses due to copyright piracy of software accounted for nearly 30 per cent of the total trade loss of $9.4 billion caused by piracy.

The focus on IT could also help facilitate a rise in e-commerce in both B2B (business to business) and also B2C (business to consumer) in less-developed nations, the study said.

The high number of digital subscriber lines in Hong Kong, South Korea and Taiwan, it notes, puts these countries at a vantage point in the adoption of e-commerce.

China's B2B is projected to increase from around $6 billion this year to $22 billion in 2004, it said. B2C e-commerce in the United States is projected to reach around $70 billion this year, up from $53.1 billion in 2001. In Europe, B2C volumes remain much smaller.

Emerging nations, particularly those in the Asia-Pacific, are also expected in a few years to notch significant increases in m-commerce (using wireless handheld devices such as mobiles to buy and sell goods and services.) In 2002, m-commerce revenues are forecast to reach nearly $50 billion with the United States and western Europe as the dominant markets.

By 2005, it is projected that the Asia-Pacific, (which already has 300 million mobile users) and the rest of the developing world, will account for about 40 per cent of the projected $225 billion in global m-commerce revenue.

UNI

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