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The Siren Song of China

27 February, 2009

The Venetian Hotel in Macau (where this is coming from) is a huge hotel, thousands of rooms, marble everywhere, massive casino, theatre, canal, at least five restaurants – miles and miles of corridors. It is also pretty soulless, exists to serve the gambling community that comes here and is tucked on a strip of land which is clearly so industrial – a walk (in the murk) is unappealing. But Macau is, of course, a special territory of China (own passport control, own currency, own rules). And at this conference, there is a mix between being able to really talk about what is happening in China (as long as you don’t give too much away) and the clear (salivating) desire of western companies to find ways to get in there to make money.

An excellent overview presentation from Charles Gillespie of (World Sports Network – a betting and gaming company who has license in China) is worth repeating some of the figures. So, here is a snapshot of the digital world in China.

To start with, you need to be an Internet Certified Practitioner (ICP). To get ICP, you have to have a Chinese partner (well you can provide without being an ICP, but there are some issues and you can be closed down). To do major internet business of any kind – you need to be a better ICP (ie, your Chinese partner is the major shareholder). Interesting how countries seek to secure their entrepreneurs by making foreigners partner with them – I wonder if this works as a model?

Some stats as from the end of 2008:

  • Internet users: 298m
  • Increase: up 41.9% since 2007 (Note: this includes mobile phones!!)
  • Internet penetration: 22. 6% (slightly above world average of 21.9%)
  • Penetration in major cities: well over 60%
  • Broadband users: 270m
  • Mobile users: 117.6m
  • Hours online per week: average of 16.6

There has been a change in the age range also. In the 2007 survey, the fastest growing (and largest group) was 20-29. However, in the 2008 survey, the fastest growing group was 10-19, with a dramatic increase also in the 40-49 age bracket. So, like lots of countries – the older are getting tech savvy at a similar rate to the younger.

In terms of what they do with digital, these are the percentages that use content or download:

  • Music        83.7% (down 3.3% on last year. A slight drop in piracy?)
  • News        78.5% (down 6.2%)
  • Inst. Message    75.3% (up 8.1%)
  • Movies        67.6% (up 13.5% – the new target for piracy?)
  • Games        62.8% (down 5.5%)

Top sites are Baidu (nor surprising); QQ (described as ‘the Yahoo of China’, with sports, news, blogs and social elements. There are more QQ accounts than online citizens, so we know that people have multiple accounts);; Google and (the ‘eBay of China).

Advertising: CPT (monthly tenancy advertising) is most common; CPM is rare, but happens; CPC/CPA – almost never.

There was some discussion about the ‘Great (fire)Wall of China’, to which Charles pointed out that the internet savvy always found a way around this, especially in the cities, and the this was more of a problem for a less educated, less internet savvy (mainly rural) online audience. Mind you, he put about 8m in the first group and 290m in the second – so I’d say censorship and internet control was still a major issue for the majority!

I’ll finish on one final point I took away which was reiterated a few times. In walking around Macau while I was there, I really felt the truth of this:

    Don’t treat China as though it is a different culture, it’s a different civilization.