First mover marketers may enjoy an advantage over others as this country's online usage grows.
With a population of 1.3 billion, China is the biggest country in the world. The Chinese Consulate in San Francisco estimates that China's Internet population grew 28 percent over the past year to 87 million, while use of broadband in that country is soaring.
Also according to the Consulate, the number of PCs sold in China last year reached 22 million (2nd after U.S.), the number of cell phones sold in 2003 reached 150 million (1st in the world), and there were 1.7 billion instant messages sent.
What's more, China's online shopping market was worth 4.2 billion yuan (US$507.5 million) last year according to market research firm, Shanghai iResearch, and is expected to double this year.
It is no surprise that global Internet giants -- including eBay Inc., Yahoo Inc. and Amazon.com Inc. -- have all taken the China plunge in the last year, paying a combined US$375 million to acquire domestic start-ups in China, according to the China Business Weekly.
"With the Chinese market's explosive emergence as both a buyer and seller of products and services worldwide, U.S. companies should now begin to create a presence on the Chinese language Internet," says Jack Bernstein, president of InterLingua.com, a multi-cultural marketing and translation services company.
China is a major global economic force and will grow dramatically in the foreseeable future. Not only does the number of Internet users in China increase by 800,000 a week, but in July PricewaterhouseCoopers projected that China’s media sector would achieve a 25 percent growth in revenue through 2008 due to an increase in online advertising.
Even with statistics like these, marketers must note one interesting challenge for selling to China’s consumers online. China has a very cash-oriented economy -- very few people have credit cards -- which makes transactions with customers outside a particular locality difficult. According to the China Business Weekly, the nation's credit card holders now number 2 million, a fraction of its 1.3 billion people.
However, there are many initiatives taking place to penetrate into this market. For example, online travel agent Ctrip.com recently announced the launch of a travel credit card with China Merchants Bank Co Ltd. Additionally, companies such as EBay's Paypal online payment unit has hired consultants to figure out how to tap into the Chinese market.
According to Michael O'Reilly, InterLingua's CTO: "It's not too early for U.S. firms to market to Chinese companies and consumers via the Internet. As we've all seen from the emergence of the English language Internet, first-movers have a significant advantage over those that follow."
For marketers wishing to penetrate this market, the following elements should be considered:
1. Web site localization -- this could mean simple translation of Web sites into Chinese, or re-designing them completely in order to be culturally and aesthetically correct.
2. Search Engine Optimization (SEO) -- as with English language search engines, such as Google, users can increase their chances of being among the top hits on Chinese language search engines by altering their content.
3. Online auctions -- Not only has eBay entered the Chinese market, but there are other Internet auction sites that U.S. firms may want to use.
4. Online advertising -- China's Web sites carry advertising (including Google-like adwords) just like English language Web sites.
5. Online Public Relations -- Chinese print and electronic publications receive press releases via email.
Elizabeth M. Lloyd is the director of corporate marketing for Netblue, Inc., an online direct marketing company based in Silicon Valley. Previously, Lloyd was the director of marketing for opt-in email provider, NetCreations, in New York City. Prior to NetCreations, Lloyd was responsible for the PR department of ValueClick, Inc.