Internet Business in China

Doing business in China? Good idea! The largest market in the world, cheap and huge labor resource, the appreciating RMB, the kind government for foreign investors and promised high yields ... However, it does not sound as good as in internet business.

Google, the best online search engine and the best web company, acts in China not as excellent as Baidu. Yahoo defeated by SINA and SOHU sold its yahoo.com.cn to Alibaba, which is greatly threating ebay with its taobao.com without taking another Chinese C2C website dangdang.com into consideration.

What problems?The China government's rigorous internet policies upon foreign companies?Yes, but very limited. The most important factor, I think, is that Chinese have their own ways on internet surfing, quite different from that of the people in the US. In fact, the similar problems lie also in other businesses, just not so obviously.

For Google, I think it all right except for its boring Chinese name gu-ge; and it is true that, google has been greatly feazed by the GFW. Yahoo deserved its lose in China as it was not willing to study from sina.com and sohu.com. Chinese do not like to read news and stories on the web-pages from yahoo, which has a very "simple" homepage almost without scrolling the slider bar. Chinese hate to click for more than 3 times to read what they want; they dislike too much indexes and directories. They are fond of shortcuts; even these shortcut links are filled in all over the homepage. Also, ebay destined to fail when it entered China the first day. Two reasons: 1) Chinese do not believe in credit cards as this country pay more attention to reality rather than credit. 2) Chinese like bargaining when buying anything. For the first, ebay could not build up an online payment system according to Chinese customers as quickly as taobao.com. On the other hand, taobao solved the second problem completely by launching its own integrated IM software customized for online purchasing; thus the customers and the seller can enjoy the pleasure on bargaining, even more pleasant than in real market.

Now the US internet service providers might have learned a lot from their Chinese competitors. But understanding what Chinese customers want is really not so easy; you must really understand Chinese commerce under the background of Chinese culture, watch and study the customers' behavior very carefully.

In fact, the same problem lies not only in the internet business, but most of the other industries. It might just not so obviously. For example, Dell can provide much better notebooks than many Chinese manufactures, but Dell's selling acts not as well as its competitors'. Chinese people just do not like Dell's direct selling service. The problem seems to mainly lie in internet only because the internet business in fact mainly focuses on channel service.