China leads the Internet market, even if controversially
Posted by Riccardo Campaci @ April 29th, 2008 in Marketing Analysis
The online Chinese market is now the number one Internet market. According to the Chinese research firm BDA China, Internet usage in China reached 220 million last February, whilst U.S. surfers were “just” 216 million.
The most impressive data is the difference in percentage between the two countries, in the U.S. Internet users make-up 71% of the entire population, and to calculate the value of China’s Internet percentage, just invert the two digits: 17%. This means that China’s market has a huge potential due to a business that is in continuous expansion: with a mere 17% of the population connected, China is the widest market in terms of total amount of surfers.
However, China’s growing market also has some interesting consequences for non-Chinese companies. First of all, the Chinese market could be a gold mine not only for Chinese companies, but even for U.S. and/or European companies. Regarding Google, in the first quarter of 2008, 51% of the Mountain View-based company’s revenue originated outside the U.S. This shows how the international market is becoming more important despite America’s economic recession, but even for a wider marketing model, focused not only on the U.S.
Secondly, from this point of view, it is important to understand a different market. The Chinese market is definitely a different market: let’s think about search engine market in China, one of the few markets in the world where Google is not number one as a search engine provider. Instead, Google is trying to grow in China in order to surpass Baidu, the current search engine leader within its territory. In order to be successful, one has to understand this new market and be able to shape up a business model that fits and is compliant to the Chinese economy.
This includes political matters as well; matters which deeply involve anti-democratic governmental exertions. Google, as well as, every single company that wants to invest in the Chinese market, will have to deal with the two notably dissimilar sides of the coin: on one side, there is the need to grow in a very promising marketplace; on the other, there is the need to walk away from a market that could potentially promote violation of the human rights.
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