China – the “Other Internet”

In light of our Monday night discussion I was very intrigued to run across an article on AdAge.com that talked about the explosion of Internet use in China, the size of the unexplored potential market and why digital, social and marketing media companies should include Chinese internet users in their long-term strategic plans.

To obtain an overall picture of the size of the Chinese market,below are the numbers provided by the S Y Lau, senior exec VP-president of online-media business at Tencent:

  • More than 513 million Internet users
  • More than 355 million mobile Internet users (nearly 200 million of which are mobile-only Internet users)
  • Projected 2012 Internet advertising revenue in 2012 of $8 billion+ USD”

“Every day, more than 164,031 Chinese go online for the first time and 17 million new smartphones are activated”. Just as mobile Internet use grows across the globe, it’s skyrocketing within China. The nation already has as many mobile-only Internet users as there are total Internet users in the U.S. You can see how these numbers are relevant to other countries around the world below.

However, the Chinese Internet represents a world unto itself. The language barrier exists not only for non-speakers but also for software developers who no longer can use Latin alphabet and have to deal with double-byte encoding of Chinese characters, which erects an additional entry barrier.Also, as we covered in class, there are government policies that specifically block a raft of both international and domestic sites in mainland China.But according to John Quelch, professor of international management and dean at the China Europe International Business School, “There are restrictions on sensitive issues… The government didn’t attempt to shut down the posting or forwarding features, just comments.” From class discussion, I could see how this is a sensitive topic and might vary depending on the issue.

Also worth mentioning, Chinese users “love” virtual products. Mr, Lau says“Personal image is vital here…[People] spend billions of yuan on virtual goods to maintain their online image.”This represents an attractive market for many digital content providers.

Lastly, with over half of billion internet users alone in China, companies are actively integrating their social media tools to promote their image and brand awareness. This proved to be both beneficial and risky business as customers respond to positive comments just as fast as to negative ones. So this strategy might be harmful to companies’ reputation. For example:“When one blogger posted a bad review of a Siemens refrigerator, the negative message was re-tweeted 170 million times in China”

Even thou purely digital brands have fared less well (Google, Facebook, Twitter and eBay) I can imagine that marketing incentive will definitely increase to captivate Chinese online audiences. The question remains as to how to overcome the language and governmental barriers and effectively promote companies’ brand image?

http://adage.com/article/digitalnext/china-afford-ignore-internet/234459/

http://adage.com/article/special-report-digital-conference/web-transforming-personal-connections-china/234195/

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One thought on “China – the “Other Internet”

  1. This is a very interesting perspective about the Chinese internet market. The most striking point is the explosive way information, both good and bad, is shared among internet users in China. As pointed out, this can be seen as huge marketing potential or a caution flag for companies determining advertising and marketing strategies aimed at the Chinese people. I think the main point of the article is that the Chinese market cannot and should not be ignored, despite the barriers to entry and governmental restriction policies. The market is too large and too hungry for technology to be left out of the mix.

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