China Internet Market Analysis

Vicent from New Yorked sent me a set of questionair about Internet in China. I have answered the questions. I am sharing the questions and answers to help you get some idea of the current status of the market in China. Questions published under Vicent’s permission.

1) Of all of the Chinese Internet portals (Sina, Netease, Sohu) which is the most popular and which is best? Is there anything about one that is better than another?

IMHO, Sina is the best. Check my article on Sina, Sohu or Netease. I didn’t visit Sohu or Netease in the last three month but I visit Sina everyday.

2) Is WiFi the future of the Internet in China? Meaning would having large WiFi hotspots all over the country make it easier/less expensive for people to high quality high speed access to the Internet? Are there any problems with WiFi right now?

I beleive so. There are many Wireless (WiFi) Hot Spots in Shanghai. Many buildings has been equiped with Wifi. One year ago, I will ask the servers in a hotel: Do you provide broadband access to Internet? Now, I tend to ask, can I use my wireless laptop here?

The problem is the uncertainty the new WLAN standard GB15629.11-2003. GB standards for Guo Biao or national standard. It is similar to the international Wi-Fi (802.11) standard, but uses a different security protocol. While the Wi-Fi standard uses the Wired Equivalent Privacy (WEP) security protocol, the new Chinese standard uses a Wireless Authentication and Privacy Infrastructure (WAPI). It may be or may not be a big problem. Only time can tell.

3) How popular is the auction site eachnet.com? Is there room in the market for the auction joint venture between Sina and Yahoo!

Unlike Ebay, many goods found on eachnet are brand new. Eachnet has become a market place anyone can sell goods when they have the channel to get it, and is not limited to second hand goods. It has became a good place to eliminate the shop rental fee and the staffing cost. So many people begin to do business at eachnet.com. I have a close friend who quited his good job and start to sell goods on Eachnet.com. He can make a good living from it.

Regarding eCommerce, there are two big names in my mind: Alibaba.com which provide business owners to find buyers or sellers and eachnet.com, who helps people without a business entity to sell goods. Is there any chance for new comers? Maybe.

4) Why is SMS so popular? Meaning: if everyone has mobile phones, why do they need to send messages from a computer?why not just send them from one mobile phone to another?

SMS is popular for its reasonable price. 0.1 RMB is nothing compared to 0.4 RMB per minute if you call someone – remember, the 0.4 RMB is charged from both caller and receiver. That is 0.8 RMB for phone call while 0.1 RMB for a SMS. (Some cards charges 0.6 RMB per minutes).

I cannot see many relationship between SMS and a computer. SMS is SMS. Many people go to a computer and send SMS to friends via Sina, because it breaks down the barrier to input on a mobile device. You know, to input Chinese on a mobile device is ugly. Too slow for most people.

Go to http://sms.sina.com.cn. You will see the whole new world of SMS, which is pretty beyond the plain text (or short message) SMS. It provides rings, pictures and pre-composed SMS messages.

5) How expensive is the Internet to an average person? Meaning, do you feel the need to be careful about how many SMS you send or how much time you spend on the internet at internet cafes?

Internet is not expensive for me. (Keep in mind that I have pretty good job and a lot of things were not that expensive for me). I GUESS it is not expensive for many people. Internet Cafe charges 2 RMB (0.24 USD) per hour for Internet access. Do you think it expensive? Although the environment is poor with too many people smooking. Good Internet cafe charges 5 RMB or higher. Internet at home is still relatively expensive.

6) Is the cost of a personal computer in China very expensive? Can the average person afford one?

Personal computer’s price are still not lower enough for people as TV to them. Computer costs 4000 – 6000 RMB, which is about 2 or three months’ salary. Here is how I see the market: people with university education or higher tend to have a computer at home. People with a child older than 10 tend to buy a computer. Others may not want to spend $$$ on computers.

7) Is there anything else I should know about the Chinese internet market? Meaning what do you think will both cause the most growth and what do you think will prevent the most growth?

Well. Hardest question. You have covered a lot. Good questionair.

Questions? Post it here.

13 thoughts on “China Internet Market Analysis

  1. WilliamW

    Jianshuo, have you come across any articles analysing the profit margins of the portals’ SMS-related businesses (eg, how much do they make on every message sent or ringtone downloaded)?

    A little hard question? :o)

  2. tane

    This is an interesting and valuable article. I learned the reality of Chinese Internet life and the people. Thanks.

  3. CL

    Very informative, thank you. I’m researching into the explosion of wireless content providers in China. Does anyone know of smaller companies that are not as visible as Sina, Sohu or Netease. Or where I can obtain a list of these companies ? Much appreciated.

    Charli Lau

  4. ning

    Hi,

    I am Chinese living abroad. When I visit Chinese websites, I very often have the feeling that my browser doesn’t run as fast as it does when I visit westen website. Do you have any explainations about it? I think that it is because the Chinese authority has imposed some kind of census on the Net.

    Best regards,

    Ning

  5. Jian Shuo Wang

    It may be because the network connection between China and the other part of the world is slower. There are only very few connection between this large network in China and those in other countries.

  6. kr1m1n4l

    hi,

    I would like to buy Pc in bulk from china(for ,say 15000 British pounds) ,for resale,do you know ,or can you provide me ,with company names or companys with whom I can discuss,and deal with ???

  7. ette lee

    Dear Sir,

    Goodday.I am Ette-Lee,a duly registered government contractor

    here in Nigeria.

    I,along with five (5) other contractors have been awarded a

    contract to supply the highest configuration of laptop computers

    to each of the local government headquarter in the designated

    states of the six geo-political zones of Nigeria.

    I write to inquire if you have available laptop computers in

    large quantities and your ability to supply on demand.

    Funds have been set aside for this purpose.Do send me your

    qoutation,shipment method and mode of payment.

    Expecting to hear from you at the earliest,as this contract

    is time dependent.

    Ette-Lee

  8. al

    I intend to purchase a laptop computer with Microsoft XP in the USA for use in China, will it Work out of the box and readdy to configure , or does it need additional set up of software ?

    Thanks, AL

  9. Devang patel

    hi,

    I would like to buy modular furniture in bulk from china(for ,say 15000 British pounds) ,for resale,do you know ,or can you provide me ,with company names or companys with whom I can discuss,and deal with

    regards

    Devang patel

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