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Chinese online pioneer calls for light regulation

IDG.net

July 17, 2000
Web posted at: 10:15 a.m. EDT (1415 GMT)

MANILA (IDG) -- Asian governments are better off waiting to start major initiatives to respond to the growth of electronic commerce, Edward Zeng, founder and chief executive officer of Sparkice.com, said on Friday.

Because e-commerce is still immature, even in the developed world, any major government involvement could constrain its development, Zeng said in an interview following the Global Information Infrastructure Commission Asian Regional Conference here.

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Zeng said the Internet is like a baby and the government its parents.

"If the parents give the baby an accurate size of shirt, but the baby grows fast, the baby could be hurt," Zeng said. "It's very important for the parents to give the baby a casual sweatshirt to give them enough room to grow.

"That's why in Silicon Valley there are so many computer geniuses in casual T-shirts," Zeng quipped.

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Convincing governments to sit back and let e-commerce flourish may be difficult in some Asian countries, he added.

"Based on the history of long-term economic planning . . . it is very hard to convince the people whom most of their lives have been in control to give up control," Zeng said.

The entrepreneur's comments contrasted with recommendations from many other participants in the conference, who called for a range of government programs and public-private partnerships in education, infrastructure building and help for small and medium-sized businesses to get online.

Asia has to recognize that it can't do everything and needs to follow the standards established already in many areas, he said. Even in PC operating systems, where the Chinese government has expressed backing for Linux as an alternative to Windows, Asian countries need to hold off and watch the battle unfold.

At the same time, China can't use a 'C2C' approach -- 'copying to China' from more developed countries, he added.

"We need to understand the global trend and the local fact," Zeng said.

Zeng, whose company has grown from an pioneering operator of Internet cafes in China to an e-commerce portal provider, said Asia has an inherent edge as a center for B2B (business-to-business) e-commerce. The availability of raw materials and relatively inexpensive labor, as well as the huge existing manufacturing base in Asia, put B2B operators in the region closer to the action, he said.

U.S. B2B start-ups such as Verticalnet and B2C (business-to-consumer) operators such as Amazon.com and the failed eToys get squeezed because they buy merchandise in the U.S., at the end of a long chain of middlemen, he said.

Asian e-commerce providers, by contrast, can combine the low costs of local purchasing and operation with-high revenue stream of global sales, Zeng said.

"The future for American-based B2C could be partnerships with Asian-based B2B operators," Zeng said.




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