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2. E-business
   2.1 What is E-business?
It is common to use the terms e-business and e-commerce as synonyms. However, there are differences between the two: e-business is broader than e-commerce. E-commerce is the exchange, procurement, and distribution of products, services, and/or payments between two or more economic entities via computers or other electronic means (Pitre, 2000). This definition is consistent with the first definition of e-commerce given by Kalakota and Whinston (1997). However, it excludes intra-organizational applications that do not interface with external entities. In contrast, e-business includes the strategies, tactics, practices, activities, and methodologies that companies apply to use information technologies to improve their business practices (Abu-Musa, 2004; Pinero, 2001).
E-business can be loosely defined as a business process that uses the Internet or other electronic medium as a channel to complete business transactions. As classified by Geoffrion and Krishnan (2001), e-business consists of three areas: (1) customer-oriented activity and (2) business-oriented activity supported by (3) the e-business technology infrastructure.
The (1) customer-oriented activity consists of the activities with customers involved such as business-to-customer (B2C), customer-to-customer (C2C), government-to-customer (G2C), etc.; the (2) business-oriented activity comprises business-to-business (B2B), business-to-government (B2G), etc.  It is concluded that the scope of e-business spread across three categories: business, customers and government. See Table 2.1 to view categories and segments.

The above table illustrates the broad segments of e-business. This paper focuses on the B2C segment and excludes other segments, which is defined as the use of a variety of Internet applications that enable companies to sell goods and services directly to the end-customer on the Internet.
For (3) the e-business technology infrastructure, it is defined as the total investment in information and communications technologies (ICT) in the company, which includes hardware, software, telecommunications, electronically stored data, devices to collect and represent that data, and the people who provide IT services. Both information technology capability provided by internal groups (‘insourced’) and those outsourced to suppliers such as IBM Global Services and HP Enterprise Services (former EDS) are included as well. It is often claimed that information and communication technologies (ICT) will be for the economy what steam and machine power were to the industrial revolution (Van Hoek, 2001a:21).
   2.2 Current Status of E-business in China
According to CNNIC (China Internet Network Information Center), by December 31, 2009, the number of Chinese Internet users and the Penetration rate of the Internet had reached 384 million and 29% respectively. The number of Internet users increased by 40 million compared with late 2008, up 28.9%, and the increase in the number of Chinese Internet users remains robust. 

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