China's internet embrace presents challenges and opportunities

A recent article by Shanghai-based Yuval Atsmon in the McKinsey Quarterly highlights the burgeoning embrace of all things internet in China, and amplifies the need to understand the market better if you are hoping to take advantage of this growth now that Google has decided to exit this market.

CINIC, (The China Internet Network Information Center - the country’s official domain registry and research organisation), reported in January that by the end of 2009 the number of Internet users in China had touched 384 million, more than the entire population of the United States.

Of more interest to Australian business in the mobile content and applications market is that 233 million Chinese accessed the Net on handheld devices since the 3 major State-owned mobile carriers introduced 3G services last year.

People in China use the Internet more for entertainment, playing online games, messaging, downloading music and movies, and shopping. The Chinese place great stock in the opinions of online product reviewers. One in five consumers between the ages of 18 and 44 won’t purchase a product or service without first researching it on the Internet. 

They shop online at auction Web sites such as Taobao, paying for products and services with prepaid Taobao cards that the post offices sell for a small commission. And of course, if you can't read Mandarin, there's always someone out there to help you.

Unsurprisingly, both Chinese and foreign consumer-facing companies are pouring money into Internet marketing. Online advertising has been growing at between 20 and 30 percent a year—twice the print media’s growth rate—and the market was around US$3 billion (20 billion renminbi) in size last year.

Companies that create microsites or stage online events usually find that consumers in China respond enthusiastically by posting comments, pictures, and videos. For instance, Nokia staged an online concert in partnership with Youku, a Chinese version of YouTube, to conduct a quiz that gave visitors a chance to win 1 million renminbi. In both cases, millions of users accessed the content over Nokia handhelds.

Many companies track online conversations in China constantly, asking themselves: What are bloggers saying about our company and products? Are we generating positive buzz online? Foreign companies invite influential Chinese bloggers to visit offices and plants overseas, while other companies take part in conversations on bulletin boards to dispel rumors and address concerns even as they gather consumer insights.

Whatever your business is, if your looking for growth in the Asia (China) market, now is the time to start to research the market, (consumers, competitors, internal capabilities), to better prepare yourselves for a successful entry into the market.

Of course if you want a hand with this, drop me a line...