SEOmoz’s article by shor provides a nicely laid-out way to understand the potential for China’s Internet population, however, it misses the point completely for today’s entrepreneurs (future-wise, learn Chinese and 好好学习!).

As the article stated, recently the number of Chinese online has surpassed the number in the US, making China the country with the most number of people online, yet with only a 20% Internet penetration rate. The missing points that should have been more strongly stressed? Many of those prefer going online for QQ–chatting (which I have been hearing a lot in the metro and wish BART could get to work underground) and mainly on their cell phone. mainly on their cell phone or on their computer playing games.

So the real central point that’s missing? Even though you have millions of people online, they are online for chatting on their cell phone which means few people are actually there to buy online–a larger concern for companies in my opinion that wish to make money in China now. The article has no graphs showing the amount of money made online, just the number of people, which only goes to show the lack of concern many times in the SEO community to look beyond pure traffic.

In any case, if you plan on expanding to China for an online business, prepare for a long-term investment rather than a short-term gain.

Sidenote: The article probably does not fit to the right audience for the post sadly when the first comment mentions that China has a Communist government–a comment that should have been sent back 10 years when it would have at least been semi-accurate. Yes, the party is called the Chinese Communist Party, but like anything one should quickly learn in life, just because someone likes to call themselves something, does not mean it is true.

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Looks like a battle royale for the Chinese social networks will soon come to head with QQ launching its own service:

QQ soft launches a new service called QQ Xiaoyou, which is a social networking service targeted at students in universities and high schools. Actually, Xiaoyou is the Chinese Pinyin for alumni. Currently, only invited QQ users are allowed to test the service.

Obviously QQ want to make Xiaoyou another China’s Facebook, it also has the similar UI as Facebook. However, The net culture of Facebook is quite different from that of QQ. In Facebook, people tend to use their real name in offline life, and bring their offline connection online, while in QQ, almost all users take online ID not real name, use avatar not their own photos, and make online friends. Now, QQ Xiaoyou requires its users to use their real name and real photo, and will verify it strictly. Now you need to let QQ Xiaoyou approve your information within three days.

I’d be interested in seeing how they would actually verify it so strictly–there’s no real way unless you’re meeting them in person or having them fill out a form that scares people into being real on it. Otherwise, I would not call anything else very strict.

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Within two weeks of its beta launch, Baidu’s IM Hi already has one million users, but as the China Web2.0 Review notes:

The real challenge is how many percentage of registered users will remain active six month later.

The market here in the US is fairly flat even though there are services out there that allows people to connect across all of them, so it is really not an easy field to break into especially in an environment like this:

Based on the results of China IM Market Quarterly Tracker Q4 2007 by Analysys International, QQ accounts for about 78% market share among totally 390 million active IM accounts in China. MSN Live Messenger has about 19 million active users, accounting for 4.9% market shared, followed by Sina UC (4.1%), Fetion (3.7%) and Aliwangwang (3.1%). Leveraging Alibaba and Taobao’s B2B and C2C service, the No. of Aliwangwang’s active users keep increasing quickly. Its market share increased from 2.5% to 3.1% in last quarter of 2007, according to Analysys International’s tracker report.

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Here’s one of the areas where Baidu is actually behind in its own market comparative to Google (unlike my previous post on how Google is so far behind in understanding China and in localizing the Chinese market). The China SEO blog has the details on this:

Baidu has been rumored to preparing the launch it’s own IM software. As the leading search engine in China and considering the extensive online properties it owns, Baidu has the potential to establish itself very quickly as a player to count on in this very competitive market.

The most used IM service in China now is Tencent’s QQ. MSN messenger (or Live Messenger, as it is being branded now) ranked at the second spot and is used by more educated or affluent Internet users. Yahoo! messenger and Google Talk appear to be non-factors in the IM industry in China.

I have to admit my bias for any kind of IM client that allows me to interface across multiple services so I can chat with my friends without having to run multiple programs at once. That and what killed me from ever using AIM again were the absolutely annoying ads–pop-ups, video, sound, etc. That and the eventual downgrade of AIM to AIM Triton finally made me move to a client that I could customize–for free!

My point: unless Baidu focuses on those areas (of course usability plays a huge part) good luck breaking into the IM market.

Oh, and I have always enjoyed ICQ/QQ over AIM for whatever reason if it wasn’t for few people using it/my wife deleting it off my computer. :/

Post by: Demerzel’s China and SEO Blog

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EA, ahead of the pack of any other major game company, finally looks and sees how successful online gaming is over in Asia and decides to “experiment” with the concept of in-game transactions (a la QQ堂 or QQ itself) and in-game ads. Red Kemp notes:

The number of people playing video games online in China increased by 20% to 59 million[...]. Interestingly, a majority of these games are free-to-play.

I’m very surprised that these sites within Asia have still not tried to challenge the American market for online games to really dominate the US arena as most of the major players here are very far behind and afraid of trying different models.

Now, it may be said that the costs of creating the games and maintaining them there may be a lot cheaper than here in the US, but nonetheless if the games in China do not get on the ball in creating English versions, I can definitely see EA and later other major gaming companies establishing firm control in the US market for a long-time.

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我先去中国时候，一个朋友告诉我很多中国人用QQ，所以我觉得如果我想提高我写的中文水平，应该下载QQ。一年以前我不用QQ乐是因为大部分的朋友现在用MSN，但是最近跟老婆打QQ堂发现我QQ号码没有了。真讨厌！哎。。。反正我再注册新的QQ号码所以可以打QQ堂。真好玩。

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