Innovation Driven China’s Internet Development

Innovation Driven China’s Internet Development Nikola Zivlak Marko Ljubi čić Miroslav Radulović Lifan Yang Dr. Ming Xu Palić, April 2010.

Content
Why China?
Present situation of China’s internet development
Chinese innovative companies
Foreign companies in China
Conclusions

Why China?
“ Let China sleep, for when she wakes, she will shake the world!”
Napoleon Bonaparte

China
Civilization with 5,000 years of constant history
With more than 1.3 billion people (more than Europe, Russian and USA together), China represents around 21% of world’s population.
During last 25 years, every 8 years China doubled its GDP.

“ If you are not in China, you are really not in the game!“

Present situation of Internet development in China
China has the largest Internet population in the world – 384,000,000 users (more than entire population of USA)
Financial crisis started 2008 had little impact on Internet development in China
In 2009 the number of users growth rate was 51.7 %

Why number of China’s users grow so fast?
Chinese government introduced National Strategy for Information Development from 2006 to 2020 and “Eleventh Five-Year Plan” for Informatization of National Economy and Social Development and invest in IT infrastructure.
IT development, 3G, usage of mobile phones, decrease of Internet costs
People’s living standard in China has been improving continuously.
Due to crisis, large number of workers return home to villages and educate people about IT

Chinese Internet users
In 2009, 94.3% of Chinese users use broadband connections.
155 million users access via mobile phone.
80.2% access Internet from home.
Users are mainly young , especially students, coming from urban area and more developed provinces near the coast.
26% of Chinese users shop online

Internet applications in China

5C’s of Chinese Innovation
COPY
Starting point
Everyone tried their luck in China
COMPETITION
Companies are forced to differentiate
CONSTRAINTS
Revenue models must be adopted to low incomes and limited online advertising market.
Chinese user income is around 400 USD

COMBINATION
Combining ideas in new
ex. Tencent QQ
CHINA
Unique market, almost 400 million users
“ One-child policy”
Huge revenue by charging only couple of cents.

Chinese innovative companies
Tencent
90% of its revenue comes from its virtual currency, only 10% from advertizing
Taobao
Doesn’t charge commissions on C2C
Alimama advertizing platform
Baidu
China’s biggest search engine provider
9 th most popular web page in the world
Curently offers 57 different applications

Foreign companies in China
Most of foreign companies failed in Chinese market
They poorly understood Chinese market and ignored warnings.
Tried to replicate Western business models
Google.cn just left China in March 2010
Yahoo, Online gaming…

Conclusions
“ China innovates!”
Future trends in China
establishing transaction channel for traditional retailers and manufactures to start with Internet business,
focus on local needs and situation
focus on online brand building
development of new applications for fast growing mobile phone Internet users.
Capture the attention of China’s internet users and you are almost guaranteed in the top 20 most popular web sites
Could some Chinese company become “Tencent of the West”?

Thank you for your attention
?

Contacts
Miroslav Radulović
E-mail: miroslav.radulovic@gmail.com
Tel. (Serbia) +381 63 530 231
Nikola Zivlak
E-mail: zivlak@gmail.com
Tel. ( China ) +86 139 173 99749

Innovation Driven China’s Internet Development

by ITDogadjaji.com on Apr 23, 2010

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