The Pew research group just released a study (PDF) today outlining the growth of internet users in China today. The study estimates there are 137 million internet users, second only to the US’ online population estimated at 165 million to 210 million. ComScore estimated the entire online population at 694 million last May.
Natrually, with a population of 1,321,851,888, they have a higher possible number of users than the US. In fact the growth in Chinese users is out pacing the growth in the US, and China is projected to overtake the U.S. in the total number of users within a few years. China’s internet population grew by 18% in 2004 and 2005, and 23% in 2006.
For the past few years China huge economy and user base has been a big target for online businesses, but has remained a tricky market to enter. These problems have largely been cultural and political, rather than technical. The language barrier allowed a Chinese Facebook clone to be snatched up. eBay was close to selling off its Chinese operations after facing cultural problems and stiff competition from the homegrown Tom.com, which coincidentally distributes Skype. That rumored sale became a partnership and relaunch this summer. Search engines, Google most notably, have had difficult ethical decisions with China’s political restrictions on information.
Broadband’s increasing growth in China is heartening for bandwidth intensive programs like Skype and IPTV. Recent numbers estimated China’s broadband population nearly on par with the US at 56.2 million (US 60.3 million) during Q1 2007. Skype reportedly had over 25 million Chinese users toward the end of last year, growing at 100,000 users a day. That’s similar to the meteoric growth iLike experienced after launching on Facebook.
Below is a map outlining internet usage worldwide. Click to expand.
Wow, I never knew the China had that many internet users. Sounds like I need to start translating sites I own and work on into Chinese. Perhaps pretty soon there will be more Chinese internet users than US internet users?
First comment! Woo! Anyway, it’s no surprise. China has so many people, and like the rest of the civilized world, they like to use the Internet.
-Chris
http://www.nerdcouncil.com
anyone currently living in China care to help me get in that market?
seriously!
Welcome to everyone coming aboard– it’s more customers, more ideas, more creation for everyone.
Now I just need to get my Rosetta Stone Mandarin software going.
I spent about a month in China in 2004, and then 2-3 months earlier this year. The presence of Web in daily life has visibly increased since 2004.
Over at Simpy – http://simpy.com/ – the “zh” locale (mainland China) is ahead of “de”, “fr”, “pt”,
“es”, “ja”, “ru”. I imagine it helps that Simpy is available in Simplified Chinese.
Too bad Internet access is heavily moderated and controlled in China. There’s a national firewall set up in place to limit what their citizens can and can not have access to.
There’s also a heavy reliance on homegrown technology sites rather than external sites. Have a great idea for a website? Expect it to be backwards engineered and copied in China within days and expect THAT to be more popular than your service will ever be. Have a really profitable idea for a website? Expect some wheels to be greased and access to YOUR site be blocked off within China.
Doing business in China is more than just cut-throat. Foreign businesses are treated like best friends till they figure out exactly how your product works and have no more use for you.
I lived in China for most of this decade and worked closely with numerous web companies. Keep in mind that this has been a long time coming and is not really big news. When it will be big news is when all of those internet users own a credit card. Advertising is constantly growing, but the sophistication is not there yet (heck, it’s not even there in TV yet). Where all of these eyeballs really shine is in online gaming – there China is the undisputed king of the world.
expect to find that all they want to do is westernize. see the big M and the food market. All you have to do is the illusion
Everything gets copied in China, even cars. If my website gets blocked, I’m going to take it as a sign of my own success and be proud (and try to ignore all the cloned Chinese versions that make more money).
I interviewed some of the top bloggers and podcasters in Asia, they told me their favorite website. This was in Singapore, but they talked about Chinese sites as well. Filmed in Singapore
http://www.web-...eo-to-find-out/
I am not surprised by the surge in Internet use in China. Firstly the population is massive and also the economy is booming and very soon the highest number of users will be from China. I now get more hits from China on my sites and China is always in the top 5 on my sites even though they are in English without any Chinese version.
Great press release re-write Nick! Real insights there. *cough*
One billion population. hmmmm….
What will happen if you put Google Adsense in China?
not only facebook, nowadays you would find many clones of digg, twitter, myspace, whatever it comes to popular in US then it would appear in China very soon. But do keep in mind, many internet users in China, just like in the rest of the world, they don’t have to bother what on earth Web 2.0 is, a simple forum would be more than enough already.
This is not a surprise at all. It was a matter of time before the rest of the world adopts the information highway. All eyes on Asia.
Saeed
http://www.seomydomain.com
It would not surprise me too. Asia’s Internet users are growing…
Hey Nick
I think a better statistic to talk about is Average Disposable income per internet user, or Per Capita Income per User rather than just a numbers/numbers exercise of total users in one country and another. In the US, per capita income for Internet Users is about $45,000, versus just $2,000 in China (but growing quicker than the US rate). The US Internet User base has around $8 Trillion in spending power versus China which has only about $220 Billion. Even if every person in China is a web user in 5 years (very, very unlikely) and Per Capita income doubles in 5 years (again, unlikely) – the total spending power will still only be less than 50% of the US user base (even assuming the US does not grow in 5 years). This is why companies like Baidu, while having some 85% market share in search, does revenues that are a rounding error on Google’s balance sheet. It doesn’t make sense for US companies (especially media companies like TechCrunch) to invest in huge expenditures in China (relaunching sites in local Chinese flavor) at this point because the low returns (aka advertising dollars) do not justify expenses
I’ve tried everything else. Hobbies, Techcrunch, etc….
Nothing excites me. I’ve been watch news all day.
I see no heroes that can make us laugh.
I see no famous icons who is next steve jobs or bill gates.
I see nothing intersting on TV.
I see no oxygen left.
I see high price gas, homes, electric bill and milk
That is exactly right, Raj. It is a huge amount of users with limited expenditure. However this numbers can bring great value from many aspects, starting from the development of exchange community (due to lack of funds) to the growing of importance of long tail economy.
The world will be wired soon…
Actually it wasn’t Tom.com that crushed eBay/Eachnet, it was Alibaba’s Taobao.com.
Re: copying, had a friend who made a great analogy. The way movies are moving towards simultaneous global release because of pirating, web start-ups (with very low capex and technological barriers to entry/copying) have to do the same.
Re: the Great Firewall of China. It’s not the blocking which is a pain. Most motivated users know how to go around it really easily. It’s the drag on site speed that is frustrating. For a nerd like me, probably tops the other reasons to not eventually move from Shanghai where I’m now (others being: politics, pollution and poisonous food).
i think entrepreneurs should look at india instead. same size of population. of course, the economic growth is not as big as china’s but there are much less cultural differences than with china.
either way, this post is right on track. with china, india, japan, indonesia, Asia will be the center of all growth and opportunities. we need just to wait for 2008 (olympic games) and the world will be amazed at how they advanced so quickly
I’m a Chinese,working in a Venture Capital.China Internet Market has grown rapidly recent years.There are two reasons: one is the economic,the other is the wideband access.Anyone who is interested in China can contact me：liumaishenjian@hotmail.com
The number is great, but the freedom is little !
Since the Chinese government set up a electric Great-Wall to block
their citizens to access Internet freely, the communist government
force CISCO, Google, Yahoo… to filter information for Chinese.
In the official term called “clean”, that is any thing the communist
government don’t want their people to know, were all blocked.
Say, Chinese citizen cannot access wikipedia.org freely is because
the wikipedia offer many informations that the communist don’t want
Chinese citizen to know.
Hey Erez
I totally agree – the network affects are huge and can be very profitable (Netease and some of the other online gaming companies in China are doing quite well, as well as Alibaba in trade) even when their rev/profit is compared on a Global scale.
The point I am trying to make is that contrary to the Declaration of Independance, Users are NOT created equal, and the quality of user must be taken into account when attempting an apples to apples comparison as done in this piece. Either way, there is a butt load of money to be made in emerging markets like China, but the most lucrative market will most likely always be the US regardless of how high user numbers get in these other regions.
This is for a big part old news.
The number of 137 million is based on the CNNIC report from the beginning of this year. A new report will be available fairly soon (the reports are published twice a year) and the number will be definitely higher.
And as Calvin (comment 21) rightly says, it wasn’t Tom that killed Ebay but Taobao.com.
Tom is fairly small player and it still has to be seen whether the planned relaunch (word is that this will happen this month) will have any impact.
Why chinese government don’t want chinese to know the facts?
Because communism don’t allow people dicate global supremacy, commit war, war crimes, crimes, assassination, political corruption, extremism, terrorism, and create democracy. They want to keep the country rich and peaceful. This is why they built futuristic cities.
http://en.wikip...ectorgarcia.jpg
Pretty neat…
@6 “Doing business in China is more than just cut-throat. Foreign businesses are treated like best friends till they figure out exactly how your product works and have no more use for you.”
..vs how business is conducted in the U.S. ala Microsoft, Oracle, Media & Transportation barons of the past. It’s business–China just has much larger numbers and lower costs to capitalize on ideas.
@17 “US Internet User base has around $8 Trillion in spending power versus China which has only about $220 Billion.”
..i seriously doubt the US Internt user bas has $8T in spending power. even if we did, only a fraction of those users are actually pulling out the credit card..there is no question that the Chinese economy and consumer spending is going to eclipse the US and Europe combined, the issue is whether there will be *sufficient resources* to accommodate western standard of living for just ‘half a billion’ people let alone 1.5 billion.
@25 “…there is a butt load of money to be made in emerging markets like China, but the most lucrative market will most likely always be the US regardless of how high user numbers get in these other regions”
This is true only if there is an endless supply of easy credit and continued rise in real estate values which enables consumers to borrow/spend even more. We’re already seeing signs that this is not sustainable.
A lot of people, not just the comments on this board, seem to want to demonize China or diminish their successes citing issues with government control, limited Internet access, etc,etc..
What people forget is that this is a country of almost *1.5 BILLION PEOPLE* Would our form of government be capable of administering such a large population when we cant even control the increasing rates of violent crime, homelessness, spiraling healthcare costs of only 250m people in the U.S?
As more Chinese get access to the Internet, it will be only a matter of time before the access barriers start to fall. The government can’t ‘dam’ the ever increasing flow of information forever…
The internet users has increased very much not only in China but also in other countries of Asia
i am a chinese now live in beijing and once worked at yahoo. it’s true that the internet is growing at a fabulous speed, no matter the user base or bandwidth. however, what impresses me is that content on web is serious imbalanced. you find the web content focuses much more on entertainment than commerce. just like the previous thread mentioned, online game prevails in china. people here take internet more as media or killing time entertain than work or business tool. take a look of the china internet user base: 52.4% is under 24, 48.2% is under high school (according to the report of CNNIC). also take a look of the profitable doccoms in china: qq.com, netease, shanda, most revenue comes from teenagers. in contast, baidu.com the top search engine in china gets “poor” revenue from small and medium business via its search ad program.
if anyone would like to discuss the internet issues in china with me, drop me a mail. i am glad to share what i know about china. justrun#gmail.com
China seems great; and for huge business it is necessary…
– I like what the internet can do locally; and at a mid level (state or region)
– I would like to have a 30 site, portfolio filled with local and mid level companies, instead of (1) site global.
Not really that surprised with these numbers. China is definitely gaining momentum in everything — why not internet usage, too.
the thing is what can you do to maintain your copyrights without the piracy. If you can find a product that can not be copied at a better performance and a cheaper price you have made it. So to attract the users in china you have to get in the china production market. Be able to find the common spending value for any chineese person(some thing similar in value or equal to 99 cents for US population) and made the product available for the huge number of internet users. Manufacture , introduce, market, and then sell it before the copies are available cheaper and better. Or you can target the small class of VERY RICH chineese. Any government has the rich class regardless of the direction it takes. So do target tat small portion of the chineese population and forget the masses. A balance act NO one can master .
Everything is copied in China. We provide SEO for Chinese companies and one of the top problem we face is to see our work (website content optimization) copied and put on an older site by a competitor, just changing company name and contact information, and in some cases get higher than us and pushing clients sites to the supplemental index especially if the site is new. There is simply no business ethics here.
Patrick
The name is SEO in China
Everything is copied everywhere – perhaps you just noticed it more in China because there are more people there?
Seriously though, there is a lack of creative spark here; people are happy to copy each other under a mentality that assumes that if somebody else is doing it, it must be right. Sounds like a direct implementation of human nature!
Chines sites still have a long, long way to go, though, in terms of usability – have you seen http://www.hao123.com or http://www.qq.com ? Both are nightmares!
Wow, China seems taking big strides in Internet.
Two years before I had a chance to visit Chendu to speak in a conference.
I was amazed to see the tremendous development being promoted by Chinese government and its people. Chinese are serious in every aspect.
Rajesh Shakya
http://www.rajeshshakya.com
Helping technopreneurs to excel and lead their life!
Entering the Asian market doesn’t necessarily mean a massive investment.
I say Asia and not just China, because people have fixated on China (especially in this Olympic year) with their huge population. But South Korea and Japan are highly wired markets with much higher amounts of disposable income per capita. They also have a predilection for (genuine) Western brands, something China is adopting as fast as it can.
The reality is that businesses can’t afford to shrink from the unknowns of the Asian market. Anybody who has a sizable business and ambition to grow needs to think about how to make Asia a part of their revenue pie. Whether that means online presence only, physical stores or strategic partners depends on their resources and industry.
Naturally not everyone can throw money into an office, recruit talented native staff. Trying to jump quickly once the market matures is sure to cost more than taking early, continuous steps. First pass localization coupled with consultants who know the businesses culture and your specific industry are critical.
http://www.btrax.com specializes in helping companies and startups entering or rebooting in the Japanese and Chinese markets.
The reality is that businesses can’t afford to shrink from the unknowns of the Asian market. Anybody who has a sizable business and ambition to grow needs to think about how to make Asia a part of their revenue pie. Whether that means online presence only, physical stores or strategic partners depends on their resources and industry.
Looking for invest in china online
Time will come China will be the biggest Internet marketing country in the world.Thats what this analytics suggest me