China 's internet revolution

 

Trimmed by IPsoon Global Agency
Nov 19, 2007

 

 

China is a booming internet society but how are its many constituent parts embracing the medium? Dan Ilett found a mix of priorities and a few surprises.

 

 

They say a wise man learns from others' mistakes. In China's case that appears to be true.

 

 

As development rumbles on at incredible speed (eight percent GDP growth last year), China's people are harnessing the power of the internet to trade, talk and learn.

 

 

Beijing hotel manager Jason Shan says: "I use the computer for talking to friends and meeting new people. I sometimes download songs and pictures and upload them to my mobile phone. I also play some games and my wife keeps some documents for her study. People at our level use computers for this sort of thing but we're not technicians."

¡°It's labour intensive but labour is cheap here.¡±

There is nothing special about people using computers to do any of these things, except when you consider that huge communities on the internet are forming and changing the way people live and learn in China.

 

 

According to research by Ipsos Insight, the mean number of hours spent online in China ( 17.9 in one month) surpasses all other countries.

 

 

Porter Erisman, VP for Chinese trading website Alibaba says: "The internet is at the core of community. If you look at online communities in the West... in China it's like that but on steroids. The culture is incredibly social and people always want to be connected to friends and family.

 

 

"People absorb new technologies so quickly. In China a few years ago not only did you not have Auto Trader magazine, you didn't have autos [but now China has both]. So everything in China leaps to the next level very quickly."

 

There are currently 110 million internet users in China - a figure estimated to rise to 184 million by 2010 according to data from eMarketer.

 

 

Chat rooms, bulletin board systems (BBS) and blogs have become extremely popular in Chinese culture. So much so that people base their buying decisions largely on recommendations - just as in other countries. But in China some would argue that traditional media is not as trustworthy as advice from a neighbour.

 

 

TR Harrington, MD of Shanghai-based Darwin Marketing, says: "The BBS forums have a tremendous influence. If you look at media in China, the government controls it, so it's not always what the people believe. They feel like they get the best opinions from their fellow men from the bulletin boards."

 

 

Community posts are becoming so popular that advertisers such as Harrington have teams of people posting information on them.

 

 

He adds: "It's labour intensive but labour is cheap here. If someone can provide value then I'm willing to listen. It makes sense not to push a product but to try and contribute something."

 

 

Sage Brennan, MD of analyst house Pacific Epoch, believes it is waves of young people who are creating these online communities.

 

 

He says: "BBS really reflects what young people are interested in. Chinese people are looking around at what things to buy, what to consume. I'm sure that a lot of the recent growth in China's consumer economy is being driven by this new communication. The buying focus is still ultimately made by recommendations from friends and family."

 

 

Computer games are fuelling a society that almost lives in a virtual world. According to Chinese government figures, around four million PCs are bought every year in China as the popularity of computer games fuels the demand for internet caf¨¦s.

 

 

Alibaba's Erisman says: "I went on a two-month bike ride in rural China and in every town I couldn't get a seat in the internet caf¨¦. The villages are just beginning to get them.

 

 

"But if you're a young woman with some disposable income, you could be up at 1:00AM chatting online comparing products. Just as guys are crazy about online games, women are crazy about buying things online."

 

 

China is riding a wave of consumerism, part of which is undoubtedly fuelled by the internet. One website helping people to trade online is called Taobao - a China-specific consumer marketplace owned by Alibaba, which competes with eBay.

 

 

Erisman says: "It's all about friends getting together and shopping. China went from no consumer ecommerce to being crazy about it in about two years. We launched [Taobao] three years ago. The market wasn't there then so we had to build it.

 

 

"eBay came here first. They had a four-year head start. The problem was that they never created a local product. Our team built something totally unique for China and surpassed eBay very quickly."

 

 

One word that seems synonymous with the internet in China in the Western media is censors hip. Yahoo! China, which is also operated by Alibaba, is one US media company that has come under heavy criticism for agreeing to co-operate with government rules on what it can publish.

 

 

Erisman says: "I don't spend any time worrying about censorship. I would only work in a job where I was making a positive impact. There's no question that internet companies foreign and local have had an overwhelmingly positive impact on the lives of most Chinese.

 

 

"Our model on censorship is no different to foreign media in China. Then you have to ask whether we can do more good than harm by following the laws. Of course the answer is yes.

 

 

"People have blogs in China they can chat and say just about anything they want. The international critics are focused on the one per cent of things you can't do. But when you look at the 99 per cent of things you can do it's not even an ethical dilemma. You can pursue profit and do the right thing at the same time. They're not mutually exclusive."

 

 

IPsoon Global Agency comments:

The internet will let more Chinese attach to the world. eMarketer is becoming a huge market.