1. IntroductionElectronic commerce (e-commerce) is the process of buying and selling goods and services electronically in computerized business transactions using the Internet, networks and other digital technologies. It also includes activities that support market transactions, such as advertising, marketing, customer service, delivery and payment (Laudon, et al, 2000). In recent years, the explosion of e-commerce has had a profound impact on business around the world. Internet marketing has a global reach because it eliminates obstacles created by geography, time zones, and location (Quelch, et al., 1996). Low barriers to entry have made the global market an easier playing field for companies that can bypass physical networks of intermediaries and bring goods and services directly to customers everywhere. 1.1 Electronic commerce in China According to the China Internet Network Information Center (CNNIC) official report, China has 26.5 million Internet users as of mid-2001 since connecting to the Internet in 1994. Furthermore, in the past two years there have appeared dot-com and e-commerce websites. It was recently reported that China ranked seventh among non-US countries in registering the maximum number of dot-com companies in the year ending February 2000 (Bandyopadhyay, 2001). China today has more than 600 online shopping sites, accounting for 60% of the total number of e-commerce sites. Most of these online stores serve consumers in large cities, such as Beijing, Shanghai, and Guangzhou. A report released at the 5th China International E-Commerce Summit predicts that the size of China's B2C online shopping market will be $190 million in 2001 and the transaction amount will increase to $3.2 billion. in 2004 (People's Daily Online, 2001). huge growth trend, there are many problems that threaten the rapid development of e-commerce. For example: insecure online payments, uncertain delivery times, inadequate after-sales service, poor product quality assurance, limited range of products offered, low speed and high cost of online access, lack of public regulation to protect the buyer, etc. These bottlenecks may limit the growth of China's B2C transactions (Ernst, D., et al, 2000). Internet marketers need to overcome these barriers and launch new e-commerce business models. 1.1 The Japanese 7dream model There is a consumer-driven e-commerce revolution underway in Japan. Seven-Eleven Japan Co.Ltd, the country's largest convenience store chain with 8,200 outlets, created an e-commerce business model called 7dream.com, with seven other Japanese companies, including NEC Corp., Nomura Research Institute , Sony Corp., Sony Marketing (Japan) Inc. ., Mitsui & Co., Ltd., Japan Travel Bureau, Inc. and Kinotrope, Inc. The consortium launched the website in July 2000 to handle a wide range of operations, including distribution, sales and services, with product delivery and payment made at any time Seven-Eleven convenience stores nationwide. Additionally, Seven-Eleven installed multimedia terminals in stores to allow consumers to order products (Seven-Eleven Japan, 2000). Figure 1 shows the 7dream e-commerce model. The basic concept behind 7dream