China’s Innovations on the Web
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China’s Innovations on the Web



This is a presentation made for a seminar organized by EU-China exchange program. It replied three questions. 1- why look at China? 2- What online media brings to China? 3- Sources of innovations?

This is a presentation made for a seminar organized by EU-China exchange program. It replied three questions. 1- why look at China? 2- What online media brings to China? 3- Sources of innovations?



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China’s Innovations on the Web China’s Innovations on the Web Presentation Transcript

  • China’s Innovations on the Web Learning from China’s new media Yiqun Bo, Consulting & Research Manager | +8* | The China Media Landscape| EU-China | August 2009
  • 薄益群 BO Yiqun Clément
  • Cross-Market Consulting Mobile & Internet Innovation China | Japan | South Korea
  • 29 events | +100 speakers | +3,000 members | ~1,500 companies
  • Agenda 1. Why look at China? 2. What does online media bring to China? 3. Sources of innovation? 4. Some examples
  • 1. Why look at China?
  • #1 market in terms of users Source: Internet users Penetration Mobile users Penetration Plus Eight Star, 2009.4 million % million % China 300 24% 640 49% US 225 73% 260 85% Japan 100 >70% 110 >80%
  • Chinese Internet Players Enjoy Higher Margins than Global Peers Source: Operating Margin Company Operating Margin Plus Eight Star, 2009.4 Chinese American NetEase 62.1% eBay 24.3% Alibaba 39.7% Google 30.4% Tencent 45.4% Yahoo! 0.2% Sohu 38.2% Amazon 4.4% Shanda 40.4% IACI -4.3% Baidu 32.8% EA -13.3% Sina 20.2% VeriSign 7.4% Ctrip 27.7% 51job 11.2% Average 35.3% 7.0%
  • China’s media market is catching up with the west Year 2008 US China (source: Plus Eight Star, 2009.4) Ad market (bln USD) 293.3 29.5 Ad market YoY growth 3% 15.9% Online ad market (bln USD) 25.8 2.5 Online ad market YoY growth 21.7% 60.4% Online ad / Total ad market 8.8% 8.4%
  • Baidu: Box Computing User requirements Box User behavior Semantic analysis analysis Sentences describing happiness Human-computer Massive computing interaction • Decomposed into 20 semantic elements • 300 mln times computing Internet applications • Search in 10 bln WebPages (Search, Game, Online shopping, Virus scanning, etc.) • Deliver result within 1/10 second • Deal with 1 bln this kind of requests per day Open platform
  • Part 1 Conclusion 1. Why look at China? China has the world’s largest online population and is catching up with the West, sometimes even leading!
  • 2. What does online media bring to China?
  • 9% 49% GDP Internet
  • China Internet/Media: Enjoying the Highest Margins Average operating margin (2008E) Note: e = Morgan Stanley Research estimates Source: Morgan Stanley Research, 2008
  • “Mice Love Rice”
  • Backdorm Boys
  • Enjoy the Olympics online Time: 19:56 PV: 2,601,435 Replies: 2,649 Quote: “I am so excited about the drummers, the view is so grand that I cannot type.”
  • MSN rainbow signature • MSN and Toyota donated to the relief efforts that took place after the Sichuan Earthquake on May 12, 2008. • 6,216,469 MSN Messenger users participated in the campaign.
  • Internet as a channel for collecting disaster relief donations The symbol of online benediction launched by QQ, 32,754,656 QQ users participated in the campaign. homepage promoting the donation 41 mln RMB from Alipay and Tenpay within 10 days
  • Grey websites and no commercial ads for Mourning Day
  • People seeking 2.0
  • Part 2 Conclusion 2. What does online media bring to China? Internet not only creates heroes, but is largely impacting the China’s society as well!
  • 3. Sources of innovation? 5CTM of Chinese innovation
  • 1. Copy 5CTM of Chinese innovation
  • “Benchmarking” “Inspiration” “Best practice” “If I have seen farther it is only by standing on the shoulders of Giants.” (Isaac Newton)
  • A quick look at Germany … vs. vs. vs. Source: Web2Asia
  • Rest of Europe … Largest SNS in France Largest SNS in Spain Most popular website and SNS in Poland/ Most popular website and Search Engine in Czech Republic Largest SNS in Finland Largest SNS in the Netherlands Source: Web2Asia
  • 2. China 5CTM of Chinese innovation
  • China is learning from the West 2008| 179,800 students abroad 1978-2008| 1.39 million students 390,000 returned to China
  • China’s local features • Unbalance of development – 1st tier cities vs. 2nd / 3rd tiers – Urban vs. rural • Single child policy • Internet café • Entertainment-centric
  • Attention threshold = 1 billion dollars?
  • 3. Combination 5CTM of Chinese innovation
  • Will it blend?
  • Tencent (1998)
  • Registered users
  • Revenues 2008 (E)
  • Profit margin 2008 Note: Mixi, Gree and DeNA are Japanese social networks. Both Gree and DeNA are purely mobile.
  • Market Capitalization (August 2009) 27 bln
  • 4. Competition 5CTM of Chinese innovation
  • What happens when you have 20 YouTube 10 MySpace 5 4 Facebook 3 Yahoo … 4 Twitter
  • 5. Constraints 5CTM of Chinese innovation
  • Low GDP/capita Small transactions / making millions from cents
  • Limited advertising Alternative business models / B2B toB2C
  • Few credit cards, Low trust Alternative payment systems, escrow system, mobile, virtual currencies
  • 4. Some examples
  • Lihua| Order food over IM
  • Alimama| Ad exchange + Micro-retail
  • Babytree| Vertical for young parents
  • Qifang| P2P Micro-lending
  • Taojianghu: convergence of SNS and shopping • Beta launch: Mar 31, 2009 • SNS with regular features for all of Taobao’s buyers and sellers (about 100 mln in total) • Upgraded from community “Favorites”, “Votes” – two key points of Taojianghu service inside representing online shopping guide features • Two strong shopping guide features: Two applications with strong gaming features to • Favorites: “my accelerate popularity and stickiness favorites” and friends’ favorites. Taojianghu: SNS within • Votes: online survey system. • Gaming applications
  • Ucenter Home: “Facebook” maker An English learning SNS • Long tail in SNS • Thousands of thousands of standardized “Facebook” • It’s free! Powered by Ucenter Home URL:
  • Contact Us boyiqun +81 | Japan +82 | Korea +86 | China Telecom & Internet + Added Value * High quality
  • About +8*
  • There are more ideas outside your country than inside Tom Kelley CEO, IDEO The 10 faces of Innovation
  • About +8* | “Innovation Arbitrage” • About us – +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in Asia. – We provide local expertise & global perspective on mobile and Internet innovation from China, Japan and South Korea to add value to and accelerate the development of our clients’ businesses. • Our services – Analysis of proven best practices and business models from Asia – Other services: executive study trips, market entry strategy, M&A advisory, partners identification, negotiation support. • Founder & CEO: Benjamin Joffe – 9 years experience with mobile & Internet in Asia – Selected among “China’s Top 100 mobile industry influencers” in 2007 and 2008 – Regularly quoted in international press and keynote speaker at numerous telecom and Internet events – Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and Spanish
  • Our Clients EUROPE USA ASIA
  • Selected Projects • Adidas | E-commerce and mobile commerce market analysis and strategic recommendations for China, Japan & Korea • Bouygues Telecom | Cases studies of leading Asian Web 2.0 services and virtual worlds • Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet convergence strategies • EU-China Information Society | Research on e-commerce and virtual worlds to support the regulatory dialogue between the EU and Chinese authorities • Microsoft | Analysis of Japan’s key players and market catalysts for mobile commerce market positioning in China • DeNA | Benchmark of leading SNS in China and South Korea (DeNA operates Japan’s leading mobile social network) • China Mobile | Benchmark of Korean leading online communities • Sands Capital Management | Evaluation of investment opportunities in social networks in China • MIH / NASPERS | Analysis of leading online verticals in China (MIH is the largest shareholder in Tencent, China’s leading online community) • IMVU | Benchmark of monetization and engagement best practices in Asian virtual worlds & SNS (IMVU is a leading US-based 3D virtual world & chat)
  • Social Contribution • Mobile Monday Beijing – Founder of the Beijing chapter of Mobile Monday, the leading global network of mobile industry professionals. – 30 events inviting over 100 speakers and attended by more than 3,000 professionals from the telecom value chain. • Media – Quoted regularly by various news and research outlets such as The Economist, CNN, Ad-Age, Asia Venture Capital Journal, etc. – Monthly column on Asian innovation with the leading Chinese business magazine Asian Business Leaders and news site Interfax. • Speaking engagements – Regular keynote, speaker & moderator in IT, Media & Investment events. – Selection of speaking engagements in 2008/09 • PICNIC (Amsterdam), Lift Asia (Jeju, Korea), Infinity Ventures Summit (Sapporo, Japan), Ad-Tech (Shanghai), O’Reilly’s Graphing Social Patterns (Washington, D.C.), eComm (San Francisco), Red Herring Asia (Hong Kong), Asia Venture Capital Forum (Hong Kong), China Mobility International Summit (Beijing), Media 08 (Sydney), Wireless Developer Forum (Beijing), Open Web Asia (Seoul), XMediaLab: Virtual Worlds (Seoul), Mobile Monday Global Summit (Kuala Lumpur, Helsinki), ITU Asia (Bangkok), EU-China Virtual World Conference (Beijing), Startonomics (Beijing), UnConference (Singapore), BarCamp (Shanghai), Mobile 2.0 (Paris), La Cantine (Paris), Mobile Focus (Stockholm).
  • Published reports • Inside Tencent – #1 online community in China – #1 profitable SNS in the world – Free sample available to download in +8* website • Inside Cyworld – #1 online community in Korea – over 30% of South Korea’s population, and 90% of Korean netizens in their 20s have a personal page on the service – Free sample available to download in +8* website • Inside Alibaba (coming soon!) – #1 e-commerce empire in the world
  • Thanks!