Innovation Driven China’s Internet Development Nikola Zivlak Marko Ljubičić Miroslav Radulović Lifan Yang Dr. Ming Xu Palić, April 2010.
May 08, 2015
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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