Gang Lu: The Dragon’s Web & Asian Internet

Gang Lu’s presentation at Barcamp Shanghai 2009, was an ambitious overview of the state of the internet for both China and greater Asia (including Japan and Korea), great for anyone who isn’t familiar with the scale and differences inherent in these markets in contrast to Western markets.

The big story last year for the internet? Facebook. But do most Chinese youth know Facebook? No. The big internet story this year? Twitter. Is microblogging (not necessarily Twitter) hot in China? Gang Lu seems to think so.

What else is there to know about China’s internet, and Asia’s internet overall? Let’s see…

The Dragon’s Web:

• 316 million internet users
• ~2.9 million Chinese web sites
• Internet penetration is around 25%
• 107 million bloggers by 2009-6-14 670 million mobile subscribers
• ~117 million surfing internet on mobile devices.

Fact One – Copycats

The C2C (Copy-2-China) Model:

• Youtube = Youku, Tudou, Ku6, 56, etc.
• Facebook = Xiaonei, Hainei, Xiaoyou, Tongxue, Kaixing001, etc.
• Twitter = Fanfou, Jiwai, Zuosa, Digu, etc.
• Linkedin = Wealink, Tianji, Linklist

Unlike copycats in other countries, Chinese copycats can not only survive, the can also dominate the local market.

Fact Two – Reformation

Social networking – kaixin001.com skyrocketed to 30 million registered user from the middle of last year focusing on white collar users with social gaming; 51.com implemented virtual coin and payment API into its open playform;

Microblogging (Twitter) – digu.com is turning twitter-like service from a tool to entertainment.

Fact Three – Innovation

Social networks can be distributed – Comsenz developed UCHome, a mini-Facebook-like SNS that can be downloaded for free.

Combination of traditional business and web 2.0:

• Dianpin.com is the place to search for restaurants.
• Alipay.com allows you to pay after you receive the goods.
• Liba.com provides a full package for your living (housing, wedding, etc.).

Internet culture

QQ (by end of 2008):

• 891.9 million registered user accounts
• 376.6 million active user accounts
• 31.4 million registered subscriptions for fee-based internet value-added services
• 14.7 million registered subscriptions for fee-based mobile and telecommunications value-added services

Tencent, owner of QQ has revenues of 7.15 billion RMB (1.05 billion USD), and a gross profit of 4.98 billion RMB (732 million USD).

BBS discussion forums:

• 3000+ million registered BBS users
• ~80% of Chinese websites are running their own BBS
• Total daily pageviews over 1600 million
• 10 million posts published every day.

Sina, the biggest Chinese news portal acquired Focus Media, the leading outdoor media operator.

When West Internet Culture Meets Dragon

Many foreign internet companies fail in the Chinese web market, including MySpace, eBay, AOL, etc. Google is doing okay but only takes 30% market shar. It is too late for Facebook.

However, many foreigners are now setting up their startups in China, e.g. Qifang won Technology Pioneer award from WEF; ChinesePod was TOP10 podcast site by TIME, CMUNE creates a new web-based 3D engine; Neocha is one of the leading SNS focus on artists and indie muscicians.

US/EU Web and Asia Web

In US/EU web, becoming an international company is relatively easier, and language is not a huge barrier (ex. Le Web 3).

In Asia web, China has a huge market, Japan has a very advanced mobile market, and Korea is leading in online gaming. It is difficult to find a web company or service that is cross-country. Gang Lu finds it interesting that the local Asian industry has seldom or never talked to its neighbords despite the similarities in culture.

What is really happening in Asia?

A Starcraft competition in Korea.

Korea:

• Has very good infrastructure.
• Naver still dominating the market.
• Online gaming is conquering the world (e.g. Nexon).
• Cyworld is operating outside Korea.
• Story Blender won Techcrunch 40.
• Wisia.us has very good implementation and cool design! (Note: Interesting, Gang Lu told everyone to check this out, and upon navigating to the site, it had a notice of its English non-Korean service being terminated!)

Japan:

• Mobile market far ahead of the rest of the world.
• Mixi, GREE, Felica Networks.
• Always the entry market for western services (e.g. YouTube, Facebook, Twitter, etc.), as in that Western service tend to enter Japan before other Asian markets.
• There are some clones but with more innovation (e.g. Nicovideo.jp).

Hong Kong:

• Not many startups but they focus on global market (because the home market is naturally small)
• Some companies have their office set up in GZ/BJ/SH.

Taiwan:

• You can always find that some influential and successful person is from Taiwan, such as the cofounder of YouTube.

India:

• Not really in Web 2.0 yet, but they don’t have the language ebarrier and are already very active in Western markets (e.g. slideshare.net).
• Startups are getting hot (e.g. burrp, picsquare, etc.)

Singapore:

• Small market but its government is very supportive.
• Center of Southeast Asia.

Israel:

• Many startups are actually founded by Israeli entrepreneurs.

Vietnam:

• The battle place when those big names decide to go abroad;

Gang Lu, The Dragon’s Web & Asian Internet

Gang Lu is a co-founder of OpenWeb.Asia Workgroup, a co-organizer of WopenWebAsia Conference, and the founder and Chief Editor of Mobinode. He has previously done a whole lot of other things I can’t even begin to bother listing, but basically make Gang awesome. More CNR Barcamp Shanghai 2009 coverage here.