Towards an Understanding of E-Commerce in China-Using Instant Messaging(中國電子商務市場之研究-以即時通訊為例)林娟娟東吳大學資訊科學系jclincis.scu.edu.tw林政毅東吳大學資訊科學研究所teddylmicrosoft.comAbstractRecently, Instant Messaging (IM) has been widely discussed. Based on the content of discussion, we can observe that IM is gradually becoming a very outstanding commercial communication tool. As the numbers of users grow tremendously, the emerging commercial opportunities are attracting many investors interests to enter this market aggressively.The increasing number of worldwide IM subscribers and the fast growing online revenue boost the potential of IM as a key business opportunity in China. The success in this business relies on the understanding of the demands of customers and the effective promotion of IM usages. Thus this research will explore the determining factors motivating individuals to pay for IM services in China.The Technology Acceptance Model (TAM) is considered as the basic model. To better reflect IM context, the research model also incorporates Perceived Service Quality, Perceived Experience and Perceived Trust. The causal relationships between the theoretical constructs used in the revised TAM will be examined to understand IM users behavior towards paying in IM.Keywords: IM, Instant Messaging, Individual Behavior, China.1. IntroductionIn China, E-Commerce has grown rapidly in the past few years. In 1997, there were only 670,000 Internet users in China and the number has remarkably jumped to 103 million by the end of June, 2005. In terms of Internet market size, China E-Commerce reached 320 billion RenMinBi (RMB, the currency of China) by the end of 2004 and is expected to reach 1,700 billion RMB (equivalent to 6,800 billion New Taiwan Dollar; NTD) by 2007 (iResearch Inc, 2005 iResearch Inc., Report of China B2B E-Commerce Analysis in 2004, May 2005, www.iresearch.com.cn.). In short, there is great potential for E-Commerce development in China.Recently, Instant Messaging (IM) has been widely discussed. Base on the content f discussion (Nardi et al., 2000; Ellen et al., 2002; Rebecca and Leysia, 2002), it is observed that IM is becoming a very outstanding commercial opportunities also attract man investors interests to enter this market aggressively. Take Tencent QQ for example, as the biggest IM services provider in China, its market share is as high as 65%, about 85.5 million users in 2005 (Analysys, 2005 Analysys Inc., Periodical Report 2005, Nov. 2005, www.analysys.com.cn.). Although Tencent QQ offers basic IM function for free, it also provides many paid services such as avatars, online dating and message forwarding from IM to mobile phones. In the second quarter of 2005 (2Q05), for the first time ever, Tencent generated over 50% of its revenue from Internet value added services (IVAS) and produced 41% of its revenue from mobile value added services (MVAS) including the subscription service for IM forwarding to mobile phones. This shows the potential of paid-services with a special focus on Mobile IM and Personal Expression as the key to monetization in China.Even though, more and more Taiwan businesses are moving over to China, there is however, very little discussion about China E-Commerce and IM industry. This study intends to extend an understanding of E-Commerce and IM industry in China and identify the possible determinants that lead to individuals behavioral intention to adopt IM. Thus, the objective of this study is twofold: to understand to E-Commerce market in China with an emphasis in the IM; and to examine the human motivations underlying individual behavioral intention to use and pay for IM services in China.In the next section we will provide a brief overview the China E-Commerce landscape and the IM industry today. In section 3, we will review current related theories. Conceptual background of the study and hypotheses will be discussed in Section 4. The last section will explain the expected outcome of this study.2. China E-Commerce and IM industryIn this section, a brief overview of the China E-Commerce landscape and IM industry will be provided to help us understand this enormous market.2.1 E-Commerce in ChinaThe E-Commerce in China began with the introduction of the China Goods Order System (CGOS) which was set up by the China National Commodity Exchange Center (CCEC) in 1997. In 1998, there was the Capital E-Commerce project and in 1999, the biggest E-Commerce portal www.8848.com began its operation. Since then, the penetration of Internet computer reached 45.6 million which has increased 25.6% and Internet users grew to 103 million and accounted for 18.4% increase from 2004 (China Internet Network Information Center, CNNIC). This is about 7.7% of total population in China. However, the Internet penetration rate is still relatively low (15% currently) compared to other Asian countries. This shows an opportunity for high onlin