Tom Spender

Is the Chinese internet more sophisticated than the rest of the web?

A couple of months ago, I emailed a few questions to Bill Dodson – author of the book China inside out, published March this year – about differences in the way Chinese and Americans use the internet for a piece on the Chinese online advertising industry.

His view was that while China is generally integrating more with the rest of the world, the Chinese internet is actually diverging from the internet in the rest of the world owing to the language difference and blocking carried out by the Chinese government for political and commercial reasons.

Round about the same time, an Amcham survey found that while both domestic Chinese and multinational firms assumed that MNCs were making better use of the internet for e-commerce, in fact – to everyone’s surprise – the opposite was true.

“Both Western MNCs and Chinese companies think MNCs are better at responding to IT and taking advantage of the trend,” said JoAnne Bessler, partner at Booz & Company, which conducted the survey along with AmCham. “However, in reality Chinese companies have much higher adoption of e-commerce.”

Will the increasing divergence of the Chinese online experience help to maintain the imagined gulf between Zhongguoren and Waiguoren in the minds of ordinary Chinese people, even as their horizons broaden?

If so, I would imagine this to be a desirable outcome for the Chinese government, which uses nationalism to argue for its legitimacy and aims to adopt foreign technology without being contaminated, for better or worse, by foreign ideas.

Anyway, here are Bill Dodson’s thoughts.

1 – In your view, do Chinese people use the internet in a different way from people in the West and if so, how? In what areas is activity on the Chinese internet going beyond that which already exists in other parts of the world?

Chinese netizens spend more of their time playing games and reading soft news than do Americans. Chinese also spend more time than Americans socializing online, especially through QQ, which they sign on to first. Americans access their email first, then check the news. Hard news coverage is important to Westerners. Increasingly, more Americans spend time in Facebook, even sending their email through Facebook. In that sense, Chinese have been ahead of Americans for years in the social media space with QQ. Chinese have been streaming media (Hollywood movies, especially) for years; Americans caught on to streaming only within the last two years, which has wreaked havoc on DVD sales (which was never a concern to China’s underground DVD industry). Chinese tend to be more socially connected than Americans and Europeans, so social networking sites will see incremental innovations that suit Chinese tastes.

2 – Do you see more integration happening between the Chinese internet and the non-Chinese internet? Why/not? What could that mean for the online advertising industry both in the West/other regions and in China?

I see a divergence between the Chinese internet and the internet in the rest of the world. Much of that has to do with controls and filters the central government has placed on content passing through the internet from the Chinese net to the rest. Reduced access speeds due to filtering and monitoring the internet as well as barred access to what seems at time random sources of information are plainly a deterrent for Chinese internet developers who want to learn about the innovations occurring in other countries. Chinese programmers will also increasingly fall behind major innovations in cyberspace because it will be difficult for them to piece together the complete, social and network context in which innovations in the outside world service customers and profit companies. Also, much of programming education and innovation occurs in English as an international language; isolation within the Chinese space will make it difficult for all but the most determined programmers to keep abreast of technology developments.

The wall China is building around its internet – linguistically, politically, technologically and commercially – will mean that the gulf in the advertising industry between China and the rest will remain wide – and perhaps even widen. Of course, China will be able to advertise to overseas Chinese who would like to keep abreast of social developments on the Mainland, or buy China-only products; however, advertising for Chinese companies will remain for the most part in the Chinese domain.

China can afford to insulate its application and use of the internet to its domestic market. After all, China’s population represents nearly 20% of humanity. That is a very large market, indeed. American firms in the past, during the industrial revolution and after World War II, were able to grow into some of the largest in the world just by doing business within the United States. Chinese internet firms have the same potential, because they arguably have the largest captive audience in the world. In other words, Chinese localization of the internet will benefit more interests commercially than opening its internet out to the world.

3 – What specific challenges exist in China for anyone trying to make a business work on the Chinese internet?

The presentation of information on Chinese websites is radically different from the more staid displays found on Western sites. Chinese websites reflect the condition and dynamics of Chinese society itself: crowded and kinetic. It is very difficult for Westerners – and for overseas Chinese – to understand this difference between the two worlds, and to adapt not just once to the way things are done in the Chinese space, but over and over again. Chinese internet application developers are not only learning about what works and what does not in the Chinese space; but Chinese society at large is also trying to figure out how the internet fits into society and its future. Recall, China only entered the industrial revolution 30 years ago, with computers becoming ubiquitous only in the last five years. The West has had decades to learn what its tastes are and to adapt the technology to its needs.