China internet sector started by imitating successful companies overseas, specially the U.S. ones. Many of leading internet companies in China got their original ideas and capital from the U.S. However, a direct copy of the U.S. model usually failed miserably in China. After all, the differences between the two countries are vast – from people’s living standard, their day-to-day life to the business environment.
That is why Google - the number one search engine, eBay - the leading online auctioneer, Yahoo - the number one online portal, Expedia – the largest online travel site, etc., all fail to dominate the China market. On the other hand, those started with their ideas, but adapted to the local market, thrived.
Sina and Sohu, China’s leading online portals, build their dominance by posting news online – they employed hundreds of editors painstakingly copy and paste pieces of news from all the leading newspaper and magazines in China to their sites. Very different from the Yahoo China site, which was largely a replicated of the Yahoo U.S. operation.
Ctrip, China’s leading online travel site, send people to distribute booklets, with hotel room prices and a telephone number for reservation, in airports and railway stations, after finding out it was very difficult to get people in China to book hotel rooms over the internet. Most of the reservations Ctrip got are still coming from its call centres.
Stories like those go on and on. The myths of better brand name and deeper pocket of the U.S. internet giants was also misleading. They are well known in the U.S., but not in China. Believe it or not, there are many people in China who cannot spell Google. Their headquarters are rich with cash, but their China subsidiaries are not. In contrast, first class China internet companies have no trouble attracting the required capital, either from direct investment or through listings in the stock exchanges.
This partly explained how eBay lost its dominance to Taobao, a late comer which swiftly became China’s most popular online auction site, and Google lost its throne to Baidu, also a late comer which eventually became the country’s most popular search engine.
This book seeks to help readers to understand the multiple facets of China internet sector. So, one day, they can make better decisions either as investors, competitors or participants of these companies.
China is now the world second largest internet market, after the U.S. It has more than 130 million users, but that is only about 10 percent of its population. There are certainly more to come in the next decade or so. China internet is a fertile land for entrepreneurs, both local and foreign.
There are roles for foreigners to play. Many foreigners worked in the early ventures. And they still do. A friend of mine, a Californian, is working on his startup in China. Another I knew is working on his second venture, after floating the first one on Nasdaq.
Moreover, the sector is easier to understand than others in China, where government policies still affect most business decisions. By and large, business 101 applies to this sector. The most successful businessmen in this sector are not sons or daughters of high-ranking government officials, but hungry entrepreneurs ready to risk it all. There is no denying frauds are everywhere in China, which is still an emerging market. But to a large extent, companies in this sector win by providing most desirable products or services to their customers.
In the first part of the book, I am going to give details about the leading players in the China internet sector. And in the second half, I am going to talk about certain topic crucial to understand the sector, including its darker side.
Part One
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Chapter 1: Sina, Sohu and Yahoo China – the portal war
Internet boom of the U.S. in the late 90s also marked the beginning with China Internet industry. Among the first are Sina and Sohu. One founded by Beijing local Yan Wang, another by MIT graduated Charles Zhang. Both were copying what was hottest then – Yahoo. Yahoo, at the same time, though it can branch into China, via its Taiwan subsidiary, Ki
Chapter 2: Ctrip and eLong (controlled by Expedia) – the travel sites
Investment banker Neil Shen and James L
Chapter 3: Alibaba – online marketplaces for small businesses
Chapter 4: Tencent – the MSN of China
Chapter 5: Tom Online, Kongzhong, Hurray and Linktone – the crowded wireless valued added services sector
Chapter 6: Netease, Shanda and the9 – the online game Trio
Chapter 7: 51job and ChinaHR (controlled by Monster.com) – the online recruiters
Chapter 8: Taobao and eBay – the fight for online auction market champion
Chapter 9: Baidu and Google China – the search for searching engine king
Part Two
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Chapter 10: Who are the Chinese internet users?
Chapter 11: Why the U.S. giants fell?
Chapter 12: Don’t limit yourself with just the online world. Go offline if the pasture is greener.
Chapter 13: Frauds – how three stupid acquisitions Monstermob made in China brought down the once high-flyer?
Chapter 14: Sex sells – a significant part of China internet traffic is driven by soft porn
I am a journalist and I work for the leading English language newspaper in Asia, South China Morning Post. For the past two and a half years, my focus is China Internet. I witnessed its increasing importance in the Chinese society and its gradual acceptance to investors worldwide.
More about Me
- Sherman So
- Before that, I worked on a startup with a partner and had been a business strategist of a Hong Kong tycoon who wanted to develop Internet business as an extension of his hotel and property enterprise. I hold an MBA and my undergraduate degree is computer science major. Just like many of the entrepreneurs I talked to in my job, I had had the same dream as founding my own company as Internet emerged. I took the job as journalist because I wanted to have first hand access of the development of China Internet sector, as many of the material written on the subject looked shallow if not bizarre, as if they were done by someone don’t know much but merely to satisfied an instant curiosity on the subject. Or they just looked a single factor of the whole picture.
Book draft - China Internet
I am currently working on a book about China Internet.
With both business and reporting experience, I think I can write a book that is comprehensive, informative and entertaining, reaching audience worldwide who really want to know about China Internet, entrepreneurships in one of the world fastest developing economy, as well as a good story.
Helping me to write the book is a former colleague of mine, James Allen, who has been business editor for the past twenty years – working for prestige business news agencies, such as, Wall Street Journal, Reuters, Bloomberg, etc.
view Book draft - Introduction
view Book proposal
With both business and reporting experience, I think I can write a book that is comprehensive, informative and entertaining, reaching audience worldwide who really want to know about China Internet, entrepreneurships in one of the world fastest developing economy, as well as a good story.
Helping me to write the book is a former colleague of mine, James Allen, who has been business editor for the past twenty years – working for prestige business news agencies, such as, Wall Street Journal, Reuters, Bloomberg, etc.
view Book draft - Introduction
view Book proposal
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