An advertisement for UCWeb on the side of a bus in Nanjing. According to a report issued by the China Internet Network Information Center in January, the number of Chinese mobile Internet users climbed to 303 million in 2010. [Photo / China Daily]

Improvements needed to help expand emerging online industry

BEIJING - China's mobile Internet business is promising, but its underdeveloped payment system makes it hard for online retailers to make money, according to Zhang Xiaowei, who runs an e-commerce mobile Internet website in China.

Zhang's website is called mmb.cn and it is like a mobile phone version of Taobao.com, which sells various kinds of products, including clothes, shoes and electronic gadgets, to Chinese cell phone users.

Founded in 2006, it now has daily transactions worth a total of almost 1 million yuan ($154,248). However, 95 percent of them have to be cash on delivery, Zhang said.

"Though our business is booming, we cannot conveniently collect money through people's mobile phones," Zhang said.

Chinese people are reluctant to pay on mobile Internet because of security concerns and the complicated procedures needed to complete a deal, he said.

Related readings:  Mobile payment market hurt by weak demand  China unveils guidelines for online payment service  Yahoo, Alibaba reach deal over Alipay  Google to unveil mobile payments Thursday

More than 1.9 million e-commerce operators in China have faced the same problem as Zhang, said Yu Yongfu, chief executive officer of UCWeb, the world's biggest mobile device browser provider by subscribers.

"Money is the lifeblood of mobile Internet retailers - they need it to grow bigger. However, the mobile payment system in China fails in its function of performing blood transfusions," Yu said.

According to a report issued by the China Internet Network Information Center in January, there were 457 million Internet users in the country at the end of 2010, rising by 73.3 million from 2009.

The number of Chinese mobile Internet users climbed to 303 million in 2010. The number of mobile payment users is expected to reach 221 million this year, up 60.9 percent from 2010.

The market volume for 2011 is estimated be 5.24 billion yuan, according to the Beijing-based research firm Analysys International.

The rosy prospects have attracted Internet giants, telecom operators and financial organizations to the industry.