China's e-commerce business blasts off.

BEIJING, CHINA -- In the last quarter of 2006 China's business-to-business e-commerce services and customer-to-customer on-line auction businesses skyrocketed. Business transactions generated through these Web based portals accounted for 8.899 billion yuan, or about US$1.13 billion. The C2C portion of this business represents the lions share at 8.27 billion yuan (US$1.05 billion).

The market is estimated to increase significantly in 2007, as more internet users come on line. One study pegs the total market value at US$6.5 billion at the end of 2007. Based on the fourth quarter results in 2006, this forecast looks to be right on track.

The Chinese government is involved in many of the domestic B2B transactions and has increased their level of involvement. This participation is facilitated through industry organizations or more directly by state-run enterprises.

There were roughly 68 million online C2C users in 2006. The Web portal with the largest share of the revenues was Taobao, with 60% of the revenues. E-Bay had 29%. In the B2B market, Alibaba's Taobao, a local portal, had 68% share of revenue, while Global Sources, with the next largest share, had only 12%.