FOR IMMEDIATE
RELEASE
PALO
ALTO, January
25, 2007 -
Another alarm
bell rang for
information and
communications
technology (ICT)
companies last
week when the
Chinese
government
released
statistics
showing the
number of
Internet users
in China would
surpass the
number of users
in the United
States within
two years.
However, with
half of the
Chinese users
accessing the
Internet via
shared-use PCs
in Internet
cafes, ICT
companies
targeting that
market should
tailor products
for this usage
model.
According to
government
statistics,
China's online
population grew
by 23.4 percent
last year to 137
million people.
At the current
rate of growth,
Chinese Internet
users will
outnumber the
210 million
users in the
United States by
2009.
Vital Wave
Consulting, a
specialized
management
consultancy that
analyzes the
needs and
opportunities
for technology
in
developing-country
markets, advises
ICT managers to
take a deeper
look at this and
other
announcements
portraying China
as a market
comparable in
size to
developed
countries.
Brooke
Partridge, the
company’s
founder and
principal
consultant says,
“Without doubt,
China is a
considerable
current and
future
market
opportunity for
many technology
companies, but
business
managers have to
evaluate market
data in the
context of their
own business
model.”
Not all
Internet Users
Are Potential
Customers
Partridge points
out that in
China there is
an enormous gap
between Internet
users and
computer
ownership.
While
the Chinese
government
reports 140
million Internet
users, there are
currently only
half as many
connected PCs.
The fact that
50% or more of
Chinese Internet
users access the
Web through
shared access
points like
Internet cafes
and school labs
has significant
implications for ICT companies
looking to China
as the next big
market.
Companies that
provide software
products and
services, such
as Microsoft and
Symantec, should
be more
concerned with
PC ownership,
which is growing
quickly in
China, but is
currently only a
third of the US
total.
E-commerce
businesses like
E-Bay, Amazon.com and
Dell must also
understand that
only a certain
percentage
of
Chinese Internet
users will have
much disposable
income or access
to financial
mechanisms like
credit cards for
online
purchases.
Google may be in
one of the best
positions to
take advantage
of a shared-use
environment.
In
addition to the
ad-based
revenues from
its search
engine, the
company’s
nascent online
productivity
software suite
may be more
attractive to
shared-use
consumers than
Microsoft’s
Office. Online
software and
storage would
relieve
consumers from
the burden of
carrying (and
possibly losing)
a storage
device, while
settings would
be consistent
from machine to
machine,
Internet cafe to
school lab or
workplace.
According to
Partridge, a
real nugget in
the Chinese
Internet user
data was the
sharp increase
in people
accessing the
web from their
cellular phones.
Unlike PCs,
mobile devices
with Internet
functionality
are
generally
not shared. And
the phone
account itself
has the
potential to act
as a credit
mechanism for
m-commerce
purchases.
Evidence of
strong growth in
mobile Internet
access is good
news for
carriers,
mobile
content
providers, and
other members of
the
telecommunications
and web-based
value chain.
Graphic
Sources: International
Telecommunications
Union, Internet
World Stats, the
Computer
Industry Almanac
and China
Internet Network
Information
Center (CINIC)
Definition: Hosted PC refers
to a computer
through which at
least one person
can access the
Internet.
About
Vital Wave
Consulting
Vital Wave
Consulting is a
specialized
management
consultancy that
analyzes the
needs and
opportunities
for technology
in
developing-country
markets. The
company provides
forecasting,
market
intelligence and
business
planning
services to
organizations
focused on
generating
revenues in
these
geographies.
Clients include
multinational
corporations in
the information
technology and
telecommunications
industries.
Links
Contact
Cheri Voisine
Vital Wave
Consulting
cheri.voisine@vitalwaveconsulting.com
(415) 722-5493 |
