I let Chris Sherman convince me that if I had to choose one overseas show this year, it should be SES China in Xiamen. Part of me is thanking Chris, and part of me is cursing the hell out of him. To be fair, he warned me that this is a cultural shock of significant magnitude. He was right.
I’ll leave the personal observations for my blog. One of the reasons I came was that I knew this was the most important online market in the world, and I had to dip my toe in for myself. For that, I do have to thank Chris. A few weeks ago I was in Florida for the Search Insider Summit, and made a note of some advice Esther Dyson passed in the keynote presentation to the ersatz “Bill Gates” (played by David Vise): “Make sure your kids learn Mandarin.” Xie Xie (thank you), Esther. You’re absolutely right.
Big, But Just Beginning
Let me give you some sense of the magnitude of this market. Right now, the Chinese Internet market is the second largest in the world, only a whisker behind the U.S.: 150 million users to the U.S.'154 million. But the U.S has 68% penetration. That 150 million represents only about 10% of the Chinese market. At full saturation, the Chinese market will be almost seven times as large as that of the U.S.
But don’t make the mistake of projecting the U.S. experience onto the emerging Chinese market. Chinese culture is vastly different from ours, and their online community reflects this difference. For one thing, much of the Chinese online experience will likely happen through mobile devices, since the mobile market is much more mature here. While the number of Internet subscribers is 150 million, the number of cell phone subscribers is significantly higher, nearly 500 million (as of October, 2006) and is growing at the rate of 5.5 million subscribers per month. For another, the Sino mind just clicks at a different speed than ours.
Hot and Noisy Online
One of my favorite phrases I’ve learned while here was renao, which loosely translates into “hot and noisy.” It was explained to me by Deborah Fallows from the PEW Internet Group, an U.S. ex-pat living in Shanghai for two years with her husband, author and journalist Jim Fallows. It sums up so much of what I’ve seen here. The Chinese like to be bombarded by visual stimuli. They operate at a frenetic pace, juggling several things at once, each loudly demanding attention. Some look at this as a lack of maturity in the Asian market. Western eyes see Chinese Web sites as garish, and we think this is because the designers aren’t very sophisticated yet. Perhaps it’s just designers catering to their audience, who like it “hot and noisy.”
The other difference is how Western cultures treat information, compared to the Chinese. In the West, information is in no short supply, and for the most part, we inherently trust the source of that information. We believe most things we read online to be true. Our biggest challenge is to wade through the mountain of information available to us and to eliminate the irrelevant. The Chinese treasure information yet have a healthy skepticism as to its veracity. While Western Web users are ruthless in their filtering of information, particularly on a search page, the Chinese are more apt to gather and consider, taking time to digest and choose. They often have multiple windows open at the same time, both as a way to keep busy with the slower load times typical in China, and also because they like their desktop “hot and noisy.”
Keeping an Eye on the Market
One of the reasons I was here was to share preliminary findings from an eye-tracking study we did with Chinese users on the two main Chinese search properties, Baidu and Google.cn. This difference in user behavior became very apparent in the study. In North America, the average interaction with a search results page, from launch to first click, is generally less than 10 seconds. In the Chinese study, we saw averages of 30 seconds on Google and up to a minute on Baidu. While North American scan activity is condensed in the Golden Triangle, in China, it's spread around the page.
It’s fascinating to watch an individual session. The eye zips around the page, picking up information in an apparently haphazard manner. Baidu has been taken to task for the opaque nature of its listings, where you can pay for placement. The results are also much more prone to affiliate spam (on both engines, but particularly Baidu) than we see in North America. But the Chinese don’t mind. Baidu has captured 62% of the search market here, compared to 20% for Google. After all, lack of trust in information is nothing new to the Chinese. Why should it be any different on a search engine?
Everyone I’ve talked to here agrees. This is a market ready to explode. Innovation is happening organically and at an incredibly rapid pace. The development cycle to turn out new functionality on Chinese sites is 30% to 50% as long as their North-American-based rivals. As somebody told me, “In China, you point, shoot and then aim. Deliberation will kill you here.”
This is a lesson Google is learning the hard way. Chris noted that the level of sophistication has increased immensely from the last trade show here, in 2006. The Chinese Internet market is like a Beijing taxi: there may be no logic to its route, but it’s sure getting to wherever it’s going in a hurry!