Surprise! NRF Urges Signing of Vermont Credit Card Bill

NRF Urges Governor to Sign Vermont Credit Card Bill

WASHINGTON--(BUSINESS WIRE)--The National Retail Federation today urged Vermont Governor Jim Douglas to sign legislation passed this week that would make it easier for merchants to give a discount to customers who pay by cash, check or debit card rather than credit card.

“This is very significant that we have seen such an overwhelming vote. The entire body of the state legislature realizes how badly the credit card industry is treating local merchants and their customers”

“This is very significant that we have seen such an overwhelming vote. The entire body of the state legislature realizes how badly the credit card industry is treating local merchants and their customers,” NRF Senior Vice President Mallory Duncan said. “We trust that Governor Douglas will provide Vermont merchants and consumers with protection against the big credit card companies by endorsing the protections included in this bill.”

“Credit card swipe fees drive up the prices paid by Vermonters every day whether they use credit cards or not,” Duncan said. “This bill will put an end to the card industry’s ability to interfere with merchants who want to give a discount to customers who pay by cash, check or debit card. Visa and MasterCard telling Vermont retailers they’ll be fined for offering a discount for cheaper forms of payment is like Pepsi or Coke telling stores they can’t charge less for other soft drinks.”

In a voice vote held on Tuesday, the state Senate unanimously agreed to amendments made in the House. The bill initially passed the Senate 30-0 on March 31 and cleared the House 139-0 on April 29 and now heads to Douglas.

Duncan, who testified in favor of the bill before the House Commerce and Economic Development Committee on April 21, noted that the card industry has acknowledged that the legislation will have no negative impact on the issuance of credit cards in Vermont and will not keep either state residents or visitors from using their cards in Vermont.

If signed into law, the bill would allow Vermont retailers to set a minimum credit card purchase of up to $10 without interference from Visa and MasterCard, which currently bar minimum purchase amounts in their rules. Retailers have long wanted freedom to set minimum purchase amounts because swipe fees can exceed a merchant’s profit on small purchases, Duncan said.

Card companies would also be prohibited from dictating how merchants price items or blocking a merchant from giving a discount for cash, checks, debit cards or credit cards with lower-than-usual swipe fees. Cash and checks are not subject to swipe fees, and PIN debit cards are generally cheaper for merchants than credit cards or signature debit because they carry lower fees. Visa and MasterCard also could not force a retailer to accept cards at all store locations if the retailer only wanted to accept them at some locations.

While the legislation is strongly supported by NRF on behalf of retailers across the country, the fight for passage of the measure was headed by the Vermont Retail Association and the Vermont Grocers Association.

“Vermont retailers and grocers clearly made a strong case with state legislators,” Duncan said. “We hope this will serve as an example of what can be done in other states when merchants, consumers and lawmakers can work together to stand up to the power of the credit card industry.”

The bill is based in part on the Credit Card Interchange Fees Act, federal legislation addressing fees charged to merchants sponsored by U.S. Representative Peter Welch, D-Vt., that is awaiting action in Washington.

Officially known as interchange, swipe fees average about 2 percent of the purchase price and are charged to merchants by Visa and MasterCard banks each time one of their cards is swiped to pay for a purchase. Collections totaled $48 billion nationwide in 2008, triple the $16 billion collected when NRF began tracking the fees in 2001.

At last month’s hearing, Duncan explained how Visa and MasterCard rules effectively force merchants to pass the fees on to consumers by requiring them to be included in the advertised price of merchandise and making cash discounts difficult. As a result, a shopping bag of goods that could be sold for $99 has to be priced at about $101 on the assumption that the customer might pay by credit card, he said. Nationwide, the average household paid an estimated $427 in higher prices in 2008, up from $159 in 2001.

As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion. www.nrf.com

Contacts

National Retail Federation

J. Craig Shearman, 202-626-8134

shearmanc@nrf.com

Permalink: http://www.businesswire.com/news/home/20100506006634/en/NRF-Urges-Governor-Sign-Vermont-Credit-Card

Surprise! NRF Urges Signing of Vermont Credit Card Bill

NRF Urges Governor to Sign Vermont Credit Card Bill

WASHINGTON--(BUSINESS WIRE)--The National Retail Federation today urged Vermont Governor Jim Douglas to sign legislation passed this week that would make it easier for merchants to give a discount to customers who pay by cash, check or debit card rather than credit card.

“This is very significant that we have seen such an overwhelming vote. The entire body of the state legislature realizes how badly the credit card industry is treating local merchants and their customers”

“This is very significant that we have seen such an overwhelming vote. The entire body of the state legislature realizes how badly the credit card industry is treating local merchants and their customers,” NRF Senior Vice President Mallory Duncan said. “We trust that Governor Douglas will provide Vermont merchants and consumers with protection against the big credit card companies by endorsing the protections included in this bill.”

“Credit card swipe fees drive up the prices paid by Vermonters every day whether they use credit cards or not,” Duncan said. “This bill will put an end to the card industry’s ability to interfere with merchants who want to give a discount to customers who pay by cash, check or debit card. Visa and MasterCard telling Vermont retailers they’ll be fined for offering a discount for cheaper forms of payment is like Pepsi or Coke telling stores they can’t charge less for other soft drinks.”

In a voice vote held on Tuesday, the state Senate unanimously agreed to amendments made in the House. The bill initially passed the Senate 30-0 on March 31 and cleared the House 139-0 on April 29 and now heads to Douglas.

Duncan, who testified in favor of the bill before the House Commerce and Economic Development Committee on April 21, noted that the card industry has acknowledged that the legislation will have no negative impact on the issuance of credit cards in Vermont and will not keep either state residents or visitors from using their cards in Vermont.

If signed into law, the bill would allow Vermont retailers to set a minimum credit card purchase of up to $10 without interference from Visa and MasterCard, which currently bar minimum purchase amounts in their rules. Retailers have long wanted freedom to set minimum purchase amounts because swipe fees can exceed a merchant’s profit on small purchases, Duncan said.

Card companies would also be prohibited from dictating how merchants price items or blocking a merchant from giving a discount for cash, checks, debit cards or credit cards with lower-than-usual swipe fees. Cash and checks are not subject to swipe fees, and PIN debit cards are generally cheaper for merchants than credit cards or signature debit because they carry lower fees. Visa and MasterCard also could not force a retailer to accept cards at all store locations if the retailer only wanted to accept them at some locations.

While the legislation is strongly supported by NRF on behalf of retailers across the country, the fight for passage of the measure was headed by the Vermont Retail Association and the Vermont Grocers Association.

“Vermont retailers and grocers clearly made a strong case with state legislators,” Duncan said. “We hope this will serve as an example of what can be done in other states when merchants, consumers and lawmakers can work together to stand up to the power of the credit card industry.”

The bill is based in part on the Credit Card Interchange Fees Act, federal legislation addressing fees charged to merchants sponsored by U.S. Representative Peter Welch, D-Vt., that is awaiting action in Washington.

Officially known as interchange, swipe fees average about 2 percent of the purchase price and are charged to merchants by Visa and MasterCard banks each time one of their cards is swiped to pay for a purchase. Collections totaled $48 billion nationwide in 2008, triple the $16 billion collected when NRF began tracking the fees in 2001.

At last month’s hearing, Duncan explained how Visa and MasterCard rules effectively force merchants to pass the fees on to consumers by requiring them to be included in the advertised price of merchandise and making cash discounts difficult. As a result, a shopping bag of goods that could be sold for $99 has to be priced at about $101 on the assumption that the customer might pay by credit card, he said. Nationwide, the average household paid an estimated $427 in higher prices in 2008, up from $159 in 2001.

As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion. www.nrf.com

Contacts

National Retail Federation

J. Craig Shearman, 202-626-8134

shearmanc@nrf.com

Permalink: http://www.businesswire.com/news/home/20100506006634/en/NRF-Urges-Governor-Sign-Vermont-Credit-Card

eBay and Gmarket Founder Plan Asia Expansion Through Joint Venture

SAN JOSE, Calif. & SEOUL, South Korea--(BUSINESS WIRE)--eBay Inc. (Nasdaq: EBAY) and Young Bae Ku, the founder of Gmarket, Korea’s leading e-commerce company acquired by eBay in 2009, today announced a joint venture agreement to expand Gmarket’s existing online marketplaces in Japan and Singapore. The agreement will strengthen eBay’s presence in Japan and Singapore – where the e-commerce markets are expected to grow by 30% and 13% respectively between 2009 and 2012—and provide a foundation for longer term expansion of Gmarket into other Asian markets.

“We are excited to join with eBay, one of the world’s most recognized e-commerce brands, in combination with our management team’s proven track record of establishing successful online marketplaces”

“eBay’s partnership with Young Bae Ku combines his expertise in Asia and Gmarket’s proven Korean online marketplace model to enhance our long-term position and growth in the region,” said Lorrie Norrington, president of eBay Marketplaces. “This joint venture is a sign of our continued commitment to help grow and lead ecommerce across Asia by offering more opportunities for sellers and extraordinary buying experiences for consumers.”

Upon the launch of the new joint venture, Mr. Ku will be chief executive officer for the new entity and will drive the vision for Gmarket’s future growth and expansion in the Asian market. As the founder of Gmarket, Mr. Ku led and oversaw the rapid growth of the online marketplace as it became Korea’s leading e-commerce company and expanded into other Asian markets. The formation of a joint venture will allow Mr. Ku and the new entity to take advantage of Gmarket’s existing presence in Japan and Singapore and its highly scalable platform for rapid product innovation.

“We are excited to join with eBay, one of the world’s most recognized e-commerce brands, in combination with our management team’s proven track record of establishing successful online marketplaces,” said Mr. Ku. “The joint venture will allow us to provide an enhanced e-commerce experience tailored for the Japanese and Singaporean markets, and to capitalize on our companies’ experience in the Asian e-commerce industry.”

eBay will have a 49% stake in the joint venture, and an entity owned by Mr. Ku will have a 51% stake. eBay will contribute assets from Gmarket’s existing Japanese and Singaporean businesses to the joint venture, and eBay and Mr. Ku will make financial contributions of approximately US$10 million each to the joint venture. eBay will also license Gmarket’s technology and brand on behalf of the joint venture, while Mr. Ku will provide local management expertise.

In June 2009, eBay Inc. acquired Gmarket for a total cash purchase price of approximately $1.2 billion. Gmarket is Korea’s leading online marketplace, and is a key component of eBay’s Marketplaces segment. The acquisition strengthened eBay’s e-commerce business in Korea and provided a platform for the company’s expansion throughout Asia. In the first quarter of 2010, eBay’s combined Korean businesses exceeded expectations and the ongoing integration of eBay’s existing Korean business, Auction Co. (formerly Internet Auction Co.), and Gmarket is proceeding well. The new joint venture will not impact eBay’s businesses in Korea.

About eBay Inc.

Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY) connects millions of buyers and sellers globally on a daily basis through eBay, the world's largest online marketplace, and PayPal, which enables individuals and businesses to securely, easily and quickly send and receive online payments. We also reach millions through specialized marketplaces such as StubHub, the world's largest ticket marketplace, and eBay classifieds sites, which together have a presence in more than 1,000 cities around the world. For more information about the company and our global portfolio of online brands, visit www.ebayinc.com.

Contacts

Press Hotline

press@ebay.com

or

eBay Inc.

John Pluhowski, 408-376-7059

jpluhowski@ebay.com

or

Gmarket

Moo-Seong Kim, +82-2-6004-9010

mskim@gmarket.com

Permalink: http://www.businesswire.com/news/home/20100506007289/en/eBay-Gmarket-Founder-Plan-Asia-Expansion-Joint

eBay and Gmarket Founder Plan Asia Expansion Through Joint Venture

SAN JOSE, Calif. & SEOUL, South Korea--(BUSINESS WIRE)--eBay Inc. (Nasdaq: EBAY) and Young Bae Ku, the founder of Gmarket, Korea’s leading e-commerce company acquired by eBay in 2009, today announced a joint venture agreement to expand Gmarket’s existing online marketplaces in Japan and Singapore. The agreement will strengthen eBay’s presence in Japan and Singapore – where the e-commerce markets are expected to grow by 30% and 13% respectively between 2009 and 2012—and provide a foundation for longer term expansion of Gmarket into other Asian markets.

“We are excited to join with eBay, one of the world’s most recognized e-commerce brands, in combination with our management team’s proven track record of establishing successful online marketplaces”

“eBay’s partnership with Young Bae Ku combines his expertise in Asia and Gmarket’s proven Korean online marketplace model to enhance our long-term position and growth in the region,” said Lorrie Norrington, president of eBay Marketplaces. “This joint venture is a sign of our continued commitment to help grow and lead ecommerce across Asia by offering more opportunities for sellers and extraordinary buying experiences for consumers.”

Upon the launch of the new joint venture, Mr. Ku will be chief executive officer for the new entity and will drive the vision for Gmarket’s future growth and expansion in the Asian market. As the founder of Gmarket, Mr. Ku led and oversaw the rapid growth of the online marketplace as it became Korea’s leading e-commerce company and expanded into other Asian markets. The formation of a joint venture will allow Mr. Ku and the new entity to take advantage of Gmarket’s existing presence in Japan and Singapore and its highly scalable platform for rapid product innovation.

“We are excited to join with eBay, one of the world’s most recognized e-commerce brands, in combination with our management team’s proven track record of establishing successful online marketplaces,” said Mr. Ku. “The joint venture will allow us to provide an enhanced e-commerce experience tailored for the Japanese and Singaporean markets, and to capitalize on our companies’ experience in the Asian e-commerce industry.”

eBay will have a 49% stake in the joint venture, and an entity owned by Mr. Ku will have a 51% stake. eBay will contribute assets from Gmarket’s existing Japanese and Singaporean businesses to the joint venture, and eBay and Mr. Ku will make financial contributions of approximately US$10 million each to the joint venture. eBay will also license Gmarket’s technology and brand on behalf of the joint venture, while Mr. Ku will provide local management expertise.

In June 2009, eBay Inc. acquired Gmarket for a total cash purchase price of approximately $1.2 billion. Gmarket is Korea’s leading online marketplace, and is a key component of eBay’s Marketplaces segment. The acquisition strengthened eBay’s e-commerce business in Korea and provided a platform for the company’s expansion throughout Asia. In the first quarter of 2010, eBay’s combined Korean businesses exceeded expectations and the ongoing integration of eBay’s existing Korean business, Auction Co. (formerly Internet Auction Co.), and Gmarket is proceeding well. The new joint venture will not impact eBay’s businesses in Korea.

About eBay Inc.

Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY) connects millions of buyers and sellers globally on a daily basis through eBay, the world's largest online marketplace, and PayPal, which enables individuals and businesses to securely, easily and quickly send and receive online payments. We also reach millions through specialized marketplaces such as StubHub, the world's largest ticket marketplace, and eBay classifieds sites, which together have a presence in more than 1,000 cities around the world. For more information about the company and our global portfolio of online brands, visit www.ebayinc.com.

Contacts

Press Hotline

press@ebay.com

or

eBay Inc.

John Pluhowski, 408-376-7059

jpluhowski@ebay.com

or

Gmarket

Moo-Seong Kim, +82-2-6004-9010

mskim@gmarket.com

Permalink: http://www.businesswire.com/news/home/20100506007289/en/eBay-Gmarket-Founder-Plan-Asia-Expansion-Joint

Explosive Growth in Internet Use Is Fundamentally Changing China's Economy and Society, Says New Report by The Boston Consulting Group

 Firm Projects E-Commerce Activity Will Grow to More Than $100 Billion in Three Years

BOSTON, MA--(Marketwire - May 6, 2010) -  Internet users in China spend about 1 billion hours online each day, more than double the daily total in the United States -- and that number will grow to well over 2 billion hours a day by 2015, according to a new report by The Boston Consulting Group (BCG). This report, titled China's Digital Generations 2.0: Digital Media and Commerce Go Mainstream, offers a comprehensive study of online behavior in China based on quantitative data as well as interviews with nearly 2,000 people from 12 cities in 11 of China's 22 provinces. It also illustrates these trends through in-depth profiles of individual consumers, allowing them to tell the story of China's dynamic and complex market.

The report also reveals the explosive growth taking place in China's e-commerce arena. In 2009, business-to-consumer and consumer-to-consumer transactions in China clocked in at a total of $37 billion, and BCG forecasts that they will surpass $100 billion in just three years. Many of the new industry giants of China's online marketplace -- Alibaba.com, Tencent, and Ctrip.com, among others -- are homegrown players that have fended off tough competition from established multinationals.

Of course, China is an enormous country -- but the explosive growth of the digital market isn't due so much to demographics as to a behavioral shift: digital media and commerce have moved into the mainstream of Chinese Internet users' lives. Specifically, these digital consumers are spending more time online to meet a more complex set of needs than ever before. For example, far more Chinese people use the Internet to communicate and seek entertainment than in other emerging markets. More than 80 percent of Chinese digital consumers use instant messaging, read news online, and stream or download music and video content via the Internet, and around half play games online. And Chinese consumers have "leapfrogged" over e-mail -- only 53 percent of Chinese Internet users actively use e-mail, less than in any other major market. The average time online for Chinese Internet users increased from 2.4 hours per day in 2006 to 2.7 hours per day in 2009, compared with only 2.3 hours per day in the United States.

"We're seeing a set of behaviors that didn't exist a few years ago. And as a level of intense consumer activity shifts online, this is the beginning of a huge boom," said David Michael, a senior partner in BCG's Beijing office and lead author of the report. "The commercial relevance here is that a massive transformation in Chinese consumer habits is under way, and any company wanting to reach these consumers must first understand them."

The majority of China's digital consumption comes from those aged 35 and under, who make up 73 percent of China's total online population and account for more than 80 percent of China's online hours. Many of these users are sophisticated -- well educated and with white-collar jobs. For instance, young professionals, who represent 6 percent of all Chinese Internet users, have a remarkable 99 percent penetration. They are also the heaviest users, averaging four hours a day online. Yet while urban users may be the early adopters, growth is increasingly coming from China's vast rural areas. "Understanding the motivations and behaviors of these segments will be critical for businesses to tap into the potential that this trend offers," explains Michael.

One of the specific trends explored in the report is the embrace of e-commerce among Chinese digital consumers. Some 8 percent of the Chinese population shopped online in 2009, compared with just 3 percent in 2006. "We're at a tipping point in China in which consumers are crossing the threshold of trust and convenience -- and each incremental transaction further entrenches the e-commerce impulse," said Michael. "As disposable incomes increase, the potential for growth will rise dramatically." But even for those consumers who are skittish about online-payment systems or seller fraud, e-commerce platforms are increasingly becoming a clearinghouse for product information. E-commerce adoption is estimated to jump to 19 percent of the population by 2012.

The report highlights the fundamental structural characteristics of the Chinese e-commerce market. Chief among them are the prevalence of consumer-to-consumer transactions, many of which take place at Taobao, an online auction site that is part of Alibaba Group. Consumers in China still prefer cash transactions, with only 20 percent using online payment systems. "The potential impact of these structural characteristics on conventional retailers should not be understated," says Michael. "Many conventional retailers are starting to discover the plethora of Taobao sellers looking to compete with lower price points, or reaching out to different geographic regions, such as lower-tier cities and rural areas, that conventional retailers have difficulty serving today."

The report also examines the booming popularity of social-networking sites in China, and the opportunities in online advertising. Throughout 2008, social-networking sites in China rapidly gained hold among university students and young professionals, and by 2009 Chinese Internet users of all backgrounds and age groups were active in their use. Meanwhile, as consumption of online news and other portal-based information has continued to climb, so too has the growth potential of China's online-advertising market. Online advertising is taking share from magazines, newspapers, and TV, and will hit a projected 20 percent of total advertising in 2012, up from 8 percent in 2008.

The dominant digital players in the Chinese market are a crucial part of the story. Since BCG last conducted research on the Chinese digital market, in late 2007, the most successful local companies have roundly outperformed multinationals in every category of the Internet industry in China, driven by a deep understanding of Chinese consumers and by innovative approaches to meeting their needs. While interviews with consumers illustrate one dimension of China's digital-consumption ecosystem, the rise of these digital giants also helps explain how monetizing Chinese consumer behavior can work, and the report offers case studies of how they have established their market presences.

According to Yvonne Zhou, a principal in BCG's Beijing office and coauthor of the report, "Many consumer-oriented MNCs in China are operating under outdated assumptions about Chinese consumers' media and shopping behaviors, and are not adapting their go-to-market strategies to reflect digital consumption patterns." Any company committed to engaging Chinese consumers will need to grasp the trends and implications of the country's Internet-usage patterns, which China's Digital Generations 2.0 discusses in detail. Understanding the underlying needs and tastes of the different segments of China's digital consumers is vital to crafting an effective approach to communicating with them. Companies that fail to do so are at grave risk of losing touch with one of the world's most important growth markets.

To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 69 offices in 40 countries. For more information, please visit www.bcg.com.

Explosive Growth in Internet Use Is Fundamentally Changing China's Economy and Society, Says New Report by The Boston Consulting Group

 Firm Projects E-Commerce Activity Will Grow to More Than $100 Billion in Three Years

BOSTON, MA--(Marketwire - May 6, 2010) -  Internet users in China spend about 1 billion hours online each day, more than double the daily total in the United States -- and that number will grow to well over 2 billion hours a day by 2015, according to a new report by The Boston Consulting Group (BCG). This report, titled China's Digital Generations 2.0: Digital Media and Commerce Go Mainstream, offers a comprehensive study of online behavior in China based on quantitative data as well as interviews with nearly 2,000 people from 12 cities in 11 of China's 22 provinces. It also illustrates these trends through in-depth profiles of individual consumers, allowing them to tell the story of China's dynamic and complex market.

The report also reveals the explosive growth taking place in China's e-commerce arena. In 2009, business-to-consumer and consumer-to-consumer transactions in China clocked in at a total of $37 billion, and BCG forecasts that they will surpass $100 billion in just three years. Many of the new industry giants of China's online marketplace -- Alibaba.com, Tencent, and Ctrip.com, among others -- are homegrown players that have fended off tough competition from established multinationals.

Of course, China is an enormous country -- but the explosive growth of the digital market isn't due so much to demographics as to a behavioral shift: digital media and commerce have moved into the mainstream of Chinese Internet users' lives. Specifically, these digital consumers are spending more time online to meet a more complex set of needs than ever before. For example, far more Chinese people use the Internet to communicate and seek entertainment than in other emerging markets. More than 80 percent of Chinese digital consumers use instant messaging, read news online, and stream or download music and video content via the Internet, and around half play games online. And Chinese consumers have "leapfrogged" over e-mail -- only 53 percent of Chinese Internet users actively use e-mail, less than in any other major market. The average time online for Chinese Internet users increased from 2.4 hours per day in 2006 to 2.7 hours per day in 2009, compared with only 2.3 hours per day in the United States.

"We're seeing a set of behaviors that didn't exist a few years ago. And as a level of intense consumer activity shifts online, this is the beginning of a huge boom," said David Michael, a senior partner in BCG's Beijing office and lead author of the report. "The commercial relevance here is that a massive transformation in Chinese consumer habits is under way, and any company wanting to reach these consumers must first understand them."

The majority of China's digital consumption comes from those aged 35 and under, who make up 73 percent of China's total online population and account for more than 80 percent of China's online hours. Many of these users are sophisticated -- well educated and with white-collar jobs. For instance, young professionals, who represent 6 percent of all Chinese Internet users, have a remarkable 99 percent penetration. They are also the heaviest users, averaging four hours a day online. Yet while urban users may be the early adopters, growth is increasingly coming from China's vast rural areas. "Understanding the motivations and behaviors of these segments will be critical for businesses to tap into the potential that this trend offers," explains Michael.

One of the specific trends explored in the report is the embrace of e-commerce among Chinese digital consumers. Some 8 percent of the Chinese population shopped online in 2009, compared with just 3 percent in 2006. "We're at a tipping point in China in which consumers are crossing the threshold of trust and convenience -- and each incremental transaction further entrenches the e-commerce impulse," said Michael. "As disposable incomes increase, the potential for growth will rise dramatically." But even for those consumers who are skittish about online-payment systems or seller fraud, e-commerce platforms are increasingly becoming a clearinghouse for product information. E-commerce adoption is estimated to jump to 19 percent of the population by 2012.

The report highlights the fundamental structural characteristics of the Chinese e-commerce market. Chief among them are the prevalence of consumer-to-consumer transactions, many of which take place at Taobao, an online auction site that is part of Alibaba Group. Consumers in China still prefer cash transactions, with only 20 percent using online payment systems. "The potential impact of these structural characteristics on conventional retailers should not be understated," says Michael. "Many conventional retailers are starting to discover the plethora of Taobao sellers looking to compete with lower price points, or reaching out to different geographic regions, such as lower-tier cities and rural areas, that conventional retailers have difficulty serving today."

The report also examines the booming popularity of social-networking sites in China, and the opportunities in online advertising. Throughout 2008, social-networking sites in China rapidly gained hold among university students and young professionals, and by 2009 Chinese Internet users of all backgrounds and age groups were active in their use. Meanwhile, as consumption of online news and other portal-based information has continued to climb, so too has the growth potential of China's online-advertising market. Online advertising is taking share from magazines, newspapers, and TV, and will hit a projected 20 percent of total advertising in 2012, up from 8 percent in 2008.

The dominant digital players in the Chinese market are a crucial part of the story. Since BCG last conducted research on the Chinese digital market, in late 2007, the most successful local companies have roundly outperformed multinationals in every category of the Internet industry in China, driven by a deep understanding of Chinese consumers and by innovative approaches to meeting their needs. While interviews with consumers illustrate one dimension of China's digital-consumption ecosystem, the rise of these digital giants also helps explain how monetizing Chinese consumer behavior can work, and the report offers case studies of how they have established their market presences.

According to Yvonne Zhou, a principal in BCG's Beijing office and coauthor of the report, "Many consumer-oriented MNCs in China are operating under outdated assumptions about Chinese consumers' media and shopping behaviors, and are not adapting their go-to-market strategies to reflect digital consumption patterns." Any company committed to engaging Chinese consumers will need to grasp the trends and implications of the country's Internet-usage patterns, which China's Digital Generations 2.0 discusses in detail. Understanding the underlying needs and tastes of the different segments of China's digital consumers is vital to crafting an effective approach to communicating with them. Companies that fail to do so are at grave risk of losing touch with one of the world's most important growth markets.

To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 69 offices in 40 countries. For more information, please visit www.bcg.com.

Brochure Available for Mobile Banking Summit

Don't forget to take advantage of special early offers The discounted hotel rate offer ends this Friday, 5/7 Save $200 off the standard registration rate* - expires 5/14
	"...consumers' ever-increasing use of their ever-more-sophisticated mobile devices put institutions in the enviable position of rolling out technology just as consumers are ready to embrace it, as opposed to inventing tools and trying to motivate adoption." - from The Mobile Tipping Point - Bank Technology News | May 2010 Join us to hear in-depth panel discussions and presentations on the progress, challenges and opportunities within mobile financial services at the Fourth Annual Mobile Banking & Emerging Applications Summit on June 6-8, 2010 at the M Resort Casino & Spa in Las Vegas. RECOMMENDED WORKSHOP Getting Your Mobile Banking and Payments Platform Off the Ground This workshop offers an overview of the types of resources you'll need to get your mobile program off the ground, and gain an understanding of the mobile commerce ecosystem. [additional $145 fee applicable]   Brochure now available!Download your copy for extra savings  Don't get left behind! Register online now. Don't forget, your special savings offer is inside your brochure.Download your copy now! 2 EASY WAYS TO REGISTER Register Online Call our customer specialist Joe Frega at 212-803-8348 SPONSORSHIP OPPORTUNITIES For sponsorship and exhibit opportunities, please call Maura Parrish at 212-803-6563.

*

Brochure Available for Mobile Banking Summit

Don't forget to take advantage of special early offers The discounted hotel rate offer ends this Friday, 5/7 Save $200 off the standard registration rate* - expires 5/14
	"...consumers' ever-increasing use of their ever-more-sophisticated mobile devices put institutions in the enviable position of rolling out technology just as consumers are ready to embrace it, as opposed to inventing tools and trying to motivate adoption." - from The Mobile Tipping Point - Bank Technology News | May 2010 Join us to hear in-depth panel discussions and presentations on the progress, challenges and opportunities within mobile financial services at the Fourth Annual Mobile Banking & Emerging Applications Summit on June 6-8, 2010 at the M Resort Casino & Spa in Las Vegas. RECOMMENDED WORKSHOP Getting Your Mobile Banking and Payments Platform Off the Ground This workshop offers an overview of the types of resources you'll need to get your mobile program off the ground, and gain an understanding of the mobile commerce ecosystem. [additional $145 fee applicable]   Brochure now available!Download your copy for extra savings  Don't get left behind! Register online now. Don't forget, your special savings offer is inside your brochure.Download your copy now! 2 EASY WAYS TO REGISTER Register Online Call our customer specialist Joe Frega at 212-803-8348 SPONSORSHIP OPPORTUNITIES For sponsorship and exhibit opportunities, please call Maura Parrish at 212-803-6563.

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MasterCard Reaches Debit Milestone

MasterCard reached a new milestone. For the first time ever, the company said, U.S. debit card customers spent as much with their MasterCard debit cards -- $118 billion -- in the last fiscal quarter as they did with their credit cards. 



Read More at ABC News 

Behind the Rise of Debit Cards

From ATMs to Bob Dole, Why Debit Cards Are More Than a Recession Trend

MasterCard Reaches Debit Milestone

MasterCard reached a new milestone. For the first time ever, the company said, U.S. debit card customers spent as much with their MasterCard debit cards -- $118 billion -- in the last fiscal quarter as they did with their credit cards. 



Read More at ABC News 

Behind the Rise of Debit Cards

From ATMs to Bob Dole, Why Debit Cards Are More Than a Recession Trend

TransFirst Teams with American Finance Solutions to Offer MCA's

Hauppauge, N.Y., May 5, 2010 -- Small business owners are having crisis in accessing capital that has not been seen since the 1930s. American Finance Solutions (AFS), a leading provider of Merchant Cash Advances (MCA), and TransFirst, one of the nation’s top transaction processing solutions, are teaming up to provide small- and medium-sized business access to the working capital they need. Through a joint referral relationship, TransFirst expands its product portfolio to include American Finance Solutions' Merchant Cash Advance product, helping clients' access capital quickly, despite tightening credit markets.



"TransFirst works with partners that demonstrate a track record of success," said Steve Rizzuto, President of Independent Sales Services for TransFirst. "We are happy to add American Finance Solutions to our suite of innovative, customer-based solutions. They have a unique funding product that provides our small business clients with capital in less than 48 hours. TransFirst will enable split funding for AFS’ product line of merchant cash advances and welcome their clients to our outstanding processing services”.



"American Finance Solutions is proud to be partnered with a leader in the payment processing industry such as TransFirst," said Scott Griest, CEO of American Finance Solutions. "This was a win-win-win for TransFirst, their customers and American Finance Solutions. We are happy to serve them, providing value-added benefits, and look forward to continued success in 2010 and beyond."



About American Finance Solutions (www.AmericanFinanceSolutions.com )



American Finance Solutions in Anaheim, CA is a top provider of Merchant Cash Advances to small- and mid-sized businesses. Since 2006, American Finance Solutions has made over 10,000 fundings, providing business owners in all 50 states with working capital. Business owners use American Finance Solutions capital to renovate, purchase new equipment and supplies, fund advertising, manage unexpected expenses and seasonal downturns. For more information about American Finance Solution’s innovative working capital solution, call toll-free 1-800-760-5516 or visit www.AmericanFinanceSolutions.com .



About TransFirst (www.TransFirst.com )



A leading provider of secure transaction processing services and payment enabling technologies, TransFirst offers innovative products and services designed with financial institution, independent sales organization, healthcare, eCommerce, government and merchant customers’ unique needs in mind. By collaborating with our customers and utilizing strong industry knowledge, we help them grow their businesses. Founded in 1995, TransFirst continues to attain significant market share and world-class expertise in growing and profitable industry segments. Built on a platform of personal service, customer commitment and flexible pricing, TransFirst is headquartered in Hauppauge, New York, and has operations facilities in Aurora, Colo., Louisville, Colo., Omaha, Neb., Kansas City, Kan., and executive headquarters in Dallas, Texas. Company-wide, TransFirst currently processes approximately $30 billion in annual sales volume for more than 175,000 merchants and more than 1,000 financial institutions. For additional information, please call 1-800-745-2659 or visit www.TransFirst.com .



Source: Company press release.

TransFirst Teams with American Finance Solutions to Offer MCA's

Hauppauge, N.Y., May 5, 2010 -- Small business owners are having crisis in accessing capital that has not been seen since the 1930s. American Finance Solutions (AFS), a leading provider of Merchant Cash Advances (MCA), and TransFirst, one of the nation’s top transaction processing solutions, are teaming up to provide small- and medium-sized business access to the working capital they need. Through a joint referral relationship, TransFirst expands its product portfolio to include American Finance Solutions' Merchant Cash Advance product, helping clients' access capital quickly, despite tightening credit markets.



"TransFirst works with partners that demonstrate a track record of success," said Steve Rizzuto, President of Independent Sales Services for TransFirst. "We are happy to add American Finance Solutions to our suite of innovative, customer-based solutions. They have a unique funding product that provides our small business clients with capital in less than 48 hours. TransFirst will enable split funding for AFS’ product line of merchant cash advances and welcome their clients to our outstanding processing services”.



"American Finance Solutions is proud to be partnered with a leader in the payment processing industry such as TransFirst," said Scott Griest, CEO of American Finance Solutions. "This was a win-win-win for TransFirst, their customers and American Finance Solutions. We are happy to serve them, providing value-added benefits, and look forward to continued success in 2010 and beyond."



About American Finance Solutions (www.AmericanFinanceSolutions.com )



American Finance Solutions in Anaheim, CA is a top provider of Merchant Cash Advances to small- and mid-sized businesses. Since 2006, American Finance Solutions has made over 10,000 fundings, providing business owners in all 50 states with working capital. Business owners use American Finance Solutions capital to renovate, purchase new equipment and supplies, fund advertising, manage unexpected expenses and seasonal downturns. For more information about American Finance Solution’s innovative working capital solution, call toll-free 1-800-760-5516 or visit www.AmericanFinanceSolutions.com .



About TransFirst (www.TransFirst.com )



A leading provider of secure transaction processing services and payment enabling technologies, TransFirst offers innovative products and services designed with financial institution, independent sales organization, healthcare, eCommerce, government and merchant customers’ unique needs in mind. By collaborating with our customers and utilizing strong industry knowledge, we help them grow their businesses. Founded in 1995, TransFirst continues to attain significant market share and world-class expertise in growing and profitable industry segments. Built on a platform of personal service, customer commitment and flexible pricing, TransFirst is headquartered in Hauppauge, New York, and has operations facilities in Aurora, Colo., Louisville, Colo., Omaha, Neb., Kansas City, Kan., and executive headquarters in Dallas, Texas. Company-wide, TransFirst currently processes approximately $30 billion in annual sales volume for more than 175,000 merchants and more than 1,000 financial institutions. For additional information, please call 1-800-745-2659 or visit www.TransFirst.com .



Source: Company press release.