Innovation Driven China’s Internet Development


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Prezentacija "Innovation Driven China’s Internet Development" koju je Miroslav Radulović održao na konferenciji E-trgovina u aprilu 2010.

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Innovation Driven China’s Internet Development

  1. 1. Innovation Driven China’s Internet Development Nikola Zivlak Marko Ljubi čić Miroslav Radulović Lifan Yang Dr. Ming Xu Palić, April 2010.
  2. 2. Content <ul><li>Why China? </li></ul><ul><li>Present situation of China’s internet development </li></ul><ul><li>Chinese innovative companies </li></ul><ul><li>Foreign companies in China </li></ul><ul><li>Conclusions </li></ul>
  3. 3. Why China? <ul><li>“ Let China sleep, for when she wakes, she will shake the world!” </li></ul><ul><li> Napoleon Bonaparte </li></ul>
  4. 4. China <ul><li>Civilization with 5,000 years of constant history </li></ul><ul><li>With more than 1.3 billion people (more than Europe, Russian and USA together), China represents around 21% of world’s population. </li></ul><ul><li>During last 25 years, every 8 years China doubled its GDP. </li></ul>
  5. 5. “ If you are not in China, you are really not in the game!“
  6. 6. Present situation of Internet development in China <ul><li>China has the largest Internet population in the world – 384,000,000 users (more than entire population of USA) </li></ul><ul><li>Financial crisis started 2008 had little impact on Internet development in China </li></ul><ul><li>In 2009 the number of users growth rate was 51.7 % </li></ul>
  7. 7. Why number of China’s users grow so fast? <ul><li>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. </li></ul><ul><li>IT development, 3G, usage of mobile phones, decrease of Internet costs </li></ul><ul><li>People’s living standard in China has been improving continuously. </li></ul><ul><li>Due to crisis, large number of workers return home to villages and educate people about IT </li></ul>
  8. 8.
  9. 9. Chinese Internet users <ul><li>In 2009, 94.3% of Chinese users use broadband connections. </li></ul><ul><li>155 million users access via mobile phone. </li></ul><ul><li>80.2% access Internet from home. </li></ul><ul><li>Users are mainly young , especially students, coming from urban area and more developed provinces near the coast. </li></ul><ul><li>26% of Chinese users shop online </li></ul>
  10. 10.
  11. 11. Internet applications in China
  12. 12. 5C’s of Chinese Innovation <ul><li>COPY </li></ul><ul><ul><li>Starting point </li></ul></ul><ul><ul><li>Everyone tried their luck in China </li></ul></ul><ul><ul><li>COMPETITION </li></ul></ul><ul><ul><li>Companies are forced to differentiate </li></ul></ul><ul><ul><li>CONSTRAINTS </li></ul></ul><ul><ul><li>Revenue models must be adopted to low incomes and limited online advertising market. </li></ul></ul><ul><ul><li>Chinese user income is around 400 USD </li></ul></ul>
  13. 13. <ul><ul><ul><li>COMBINATION </li></ul></ul></ul><ul><ul><li>Combining ideas in new </li></ul></ul><ul><ul><li>ex. Tencent QQ </li></ul></ul><ul><ul><li>CHINA </li></ul></ul><ul><ul><li>Unique market, almost 400 million users </li></ul></ul><ul><ul><li>“ One-child policy” </li></ul></ul><ul><ul><li>Huge revenue by charging only couple of cents. </li></ul></ul>
  14. 14. Chinese innovative companies <ul><li>Tencent </li></ul><ul><ul><li>90% of its revenue comes from its virtual currency, only 10% from advertizing </li></ul></ul><ul><li>Taobao </li></ul><ul><ul><li>Doesn’t charge commissions on C2C </li></ul></ul><ul><ul><li>Alimama advertizing platform </li></ul></ul><ul><li>Baidu </li></ul><ul><ul><li>China’s biggest search engine provider </li></ul></ul><ul><ul><li>9 th most popular web page in the world </li></ul></ul><ul><ul><li>Curently offers 57 different applications </li></ul></ul>
  15. 15. Foreign companies in China <ul><li>Most of foreign companies failed in Chinese market </li></ul><ul><li>They poorly understood Chinese market and ignored warnings. </li></ul><ul><li>Tried to replicate Western business models </li></ul><ul><li> just left China in March 2010 </li></ul><ul><li>Yahoo, Online gaming… </li></ul>
  16. 16. Conclusions <ul><li>“ China innovates!” </li></ul><ul><li>Future trends in China </li></ul><ul><ul><li>establishing transaction channel for traditional retailers and manufactures to start with Internet business, </li></ul></ul><ul><ul><li>focus on local needs and situation </li></ul></ul><ul><ul><li>focus on online brand building </li></ul></ul><ul><ul><li>development of new applications for fast growing mobile phone Internet users. </li></ul></ul><ul><li>Capture the attention of China’s internet users and you are almost guaranteed in the top 20 most popular web sites </li></ul><ul><li>Could some Chinese company become “Tencent of the West”? </li></ul>
  17. 17. Thank you for your attention <ul><li>? </li></ul>
  18. 18. Contacts <ul><li>Miroslav Radulović </li></ul><ul><li>E-mail: </li></ul><ul><li>Tel. (Serbia) +381 63 530 231 </li></ul><ul><li>Nikola Zivlak </li></ul><ul><li>E-mail: </li></ul><ul><li>Tel. ( China ) +86 139 173 99749 </li></ul>