Powerful Hong Kong businesses HongKong and Shanghai Banking Corp. Ltd, Hang Seng Bank, Cheung Kong Ltd., and Hutchison Whampoa Ltd. have formed a joint venture to bring more businesses online.
The new venture, which is backed by combined resources of $385 million (US$), is called iBusinessCorporation.com and will focus on both business-to-business (B2B) and business-to-consumer (B2C) services. There have been few specifics offered, but a statement did suggest that “market reach” is “the crux of the matter.”
Cheung Kong Ltd. and Hutchison Whampoa Ltd. are the majority participants with a combined stake of 75 percent in the venture. The partners may make additional investments in the future.
Goals of the New Venture
iBusiness Corporation hopes to streamline existing operations and provide transaction services online, and is likely to create portals as well as individual businesses. Probable areas of concentration will be wholesaling and retailing, as well as real estate, insurance and procurement.
A request for proposals from other companies and individuals has been issued.
Existing online ventures owned by the new partners will only be included if they are business-oriented. For example, Hutchison Whampoa’s tom.com portal will be excluded due to its status as an “infotainment” site.
Hong Kong’s E-Commerce Determination
The announcement from iBusiness Corporation closely follows a statement made earlier this month by Hong Kong’s Director of Information Technology, Lau Kam-Hung, indicating Hong Kong’s fierce determination to be a major player in online commerce.
Lau projected $2.4 billion in e-commerce transactions by 2003, based on industry estimates for the total amount of trade in goods and services carried out over the Internet in Hong Kong.
If this projection materializes, it will be a huge jump from 1998’s $60 million in e-commerce transactions.
Internet Use in China On the Rise
The new venture from iBusiness is timely, particularly in light of statistics released last week by the China Internet Network Information Center (CINIC), China’s official Internet research group.
In its Semiannual Survey Report on Internet Development in China, the group revealed that the number of Internet users in China has increased four-fold since 1998, from 2.1 million to 8.9 million. Additionally, the report said that nearly 10 percent of users have made purchases or payments on the Internet.
The report stated that the number of Web sites on the Chinese mainland increased from just under 10,000 to 15,153.