innovation driven china’s internet development
DESCRIPTION
Prezentacija "Innovation Driven China’s Internet Development" koju je Miroslav Radulović održao na konferenciji E-trgovina u aprilu 2010.TRANSCRIPT
Innovation Driven China’s Internet Development
Nikola Zivlak
Marko Ljubičić
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
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Why China?
“Let China sleep, for when she wakes, she will shake the world!”
Napoleon Bonaparte
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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.
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“If you are not in China, you are really not in the game!“
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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 %
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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 7
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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
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Internet applications in China
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5C’s of Chinese Innovation
1. COPY – Starting point– Everyone tried their luck in China
2.COMPETITION– Companies are forced to differentiate
3.CONSTRAINTS– Revenue models must be adopted to low
incomes and limited online advertising market.
– Chinese user income is around 400 USD 12
4. COMBINATION– Combining ideas in new – ex. Tencent QQ
5.CHINA– Unique market, almost 400 million users– “One-child policy”– Huge revenue by charging only couple of
cents.
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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
– 9th most popular web page in the world
– Curently offers 57 different applications14
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…
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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”? 16
Thank you for your attention
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Contacts
Miroslav Radulović
E-mail: [email protected]
Tel. (Serbia) +381 63 530 231
Nikola Zivlak
E-mail: [email protected]
Tel. (China) +86 139 173 99749
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