China is
next in my series on top international Web apps. If you haven't been following, the other
countries I've profiled so far have been Germany, Holland, Poland, Korea, United Kingdom, Russia and Spain. As this
series has gone on, the comments have become as important as the posts - perhaps moreso.
I'm hoping this post about China's Web application market is no exception, because China
is (obviously) a huge country and one blog post can't hope to cover it all. So I
encourage people from China who may read this, or people who are familiar with the
Chinese Web, to contribute your thoughts in the comments here - and add web apps to the
list.
I have to thank several people for the information in this post: In particular Tangos Chan, who runs the excellent China Web 2.0 Review blog, and Benjamin Joffe - CEO of Asian Internet consultancy Plus Eight Star Ltd and co-founder of Mobile Monday Beijing. Also thanks to Chang W. Kim, who introduced me to Tangos and Benjamin! Sam Flemming of Chinese research company CIC Data and Micah Sittig from Shanghai also contacted me with their thoughts.
Let's start with an overview of Chinese web apps. Benjamin Joffe said "there is basically at least one Chinese equivalent for every single US web2.0 service that is more than 2 months old." Here are some other characteristics of the China web scene, suggested by Tangos Chan and with further comments from Benjamin...
Big companies still dominate the market
Tangos says that so far there are no outstanding small startups that have successfully gained the attention of ordinary internet users. For example, in the blog hosting market Blogcn, Bokee and Blogbus were among the first movers. But after big companies Sina, Sohu and Baidu entered the scene, they won market share quickly [see short profiles of these companies below]
Benjamin adds that no Chinese startup that stays a startup for long - "basically they grow to over 100 staff and get their first million $ round of financing fairly quickly, or disappear."
Chinese startups often copy the Silicon Valley model
Tangos: "Sometimes, just a copycat even without any change."
Benjamin: "True enough in a first step, but as usually more than one company does this, it eventually results in tough competition to differentiate and gather/lock in users as quickly as possible. Some are making use of China's unique characteristics in terms of mobile penetration, labor cost, cheap logistics and lack of credit cards."
M&A is rare in the China market - or is it?
Tangos says M&A is rare in the China market, which makes it more difficult for China's startups to raise funding and find an exit.
Benjamin has different information from an M&A consultancy firm: "there has been over $500M worth of M&A in 2005, which is huge for a country with a GDP/capita well below 1/10th of the Western developed world. But he says that "most of the M&A occur in the wireless space" and there are "several hundreds, if not thousands" of companies competing in this wireless space.
Tangos agrees that China's mobile sector has more innovation than the Web sector, because of the high penetration rate of mobile handsets and highly developed short message, ringtone and ringback tone services. He said that in the general Web sector the big companies - Sina, Sohu, Baidu, Netease, etc. - seldom acquire startups, unlike what usually happens in Silicon Valley. In China the bigcos "just build new services by themselves."
So looks like both Tangos and Benjamin are right - M&A is relatively rare in general web apps, but common in the wireless space.
Regulation is a potential risk for Chinese startups
Tangos: "for instance, SARFT (State Administration of Radio, Film and Television) recently announced plans to regulate the online video market."
Benjamin: "I would also mention the regulations in the mobile space (as many Internet portals derive revenues from mobile phones). Sanctions and new rules for getting subscribers all impact the content providers' businesses. You can have a look at the change in their stock price around mid-July to see the impact of China Mobile new regulations."
Foreign companies find it difficult to compete
Tangos says that language barriers, difference in culture and government policies and regulations make it difficult for foreign companies to compete in China's market.
Benjamin totally agrees - he says "it is almost a national sport to show how foreign those companies are." He mentions a viral video by Baidu making fun of a foreigner, representing Google (explanation here). Benjamin also thinks US Internet giants are suffering from many shortcomings in China:
"...lack of understanding of local netizens' tastes, weakness in Chinese language software treatment, slow reactions. The only one doing fairly good in China is Google. Yahoo and Amazon bought their way in, and web 2.0 US companies are all concept-copied and adapted by local players."
Baidu is the leading Chinese language search engine. It's
the 4th ranked website in the world in
Alexa's rankings - putting it only behind Yahoo, MSN and Google on a global scale.
According to Wikipedia, the Chinese word
"Baidu" translates to "hundreds of 'degree-level'" in English. It has an index of over
740 million web pages, 80 million images and 10 million multimedia files. Baidu.com had
its initial public offering (IPO) on 5 August 2005. It also offers blogs and other
services similar to the US Internet giants.
Sina is is the largest Chinese-language web portal
(news, entertainment, email, search, etc), so similar in a way to Yahoo. Alexa ranks Sina
as the 7th biggest web property in the world, just behind MySpace. It's said to have 94.8
million registered users and more than 10 million active users engaged in their fee-based
services, with an estimated 3 billion page views every day [source: Wikipedia].
Sohu is a "mass portal and leading online media
destination" [source: Wikipedia]. It's
ranked 12 globally by Wikipedia.
Benjamin told me that Sina, Sohu and Baidu are all listed on US Nasdaq and each is valued at over $500M. And those are just 3 of the more familiar names to english-speaking Web people. China is such a big player now on the Web that they have 4 companies in Alexa's top 10 web properties in the world (Baidu, qq.com, sina.com, 163.com). The US has 5 in the top 10 and Japan 1.
There is already a 'web 2.0 logo' display of China web apps, at internetdigital.org (in list format here). So for this post Tangos has come up with his personal list of favorites. Feel free to add yours in the comments, along with reasons why. Here's Tangos' list:
I'm sure there are other interesting english language blogs about China Web that I've missed, so please mention them in the comments.
Thanks again Tangos and Benjamin for the fascinating information. China is obviously a very important part of the Web and its influence will only get bigger over the coming years, particularly in mobile one suspects.
Listed below are links to blogs that reference this entry: Top Web Apps in China.
TrackBack URL for this entry: http://www.readwriteweb.com/cgi-bin/mt/mt-tb.cgi/2723
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Some "FaceBook" style 2.0 sites: http://xiaonei.com, http//5q.com, http://zhanzuo.com
Posted by: Realazy | August 24, 2006 6:32 AMRichard, for what I read in all your posts, most countries tend to copy the successful web sites from California (I don't think it is even a US phenomenon, but more a San Francisco area one ...).
But my question would be ... is it San Francisco copying anybody ? Or is it really there "where it happens" ?
Thanks :D
Posted by: hombrelobo | August 24, 2006 6:39 AMRichard, I run Maxthon the IE based browser and meet with a lot of Chinese internet companies. I ocationally cover them in www.netaneljacobsson.com as well as in the www.maxthon.com/blog .
Posted by: Netanel Jacobsson | August 24, 2006 7:01 AMFor those who can read Chinese, I think Mywowo.com can help you to find more Chinese web2.0.
Posted by: Tangos | August 24, 2006 7:23 AMIf anyone talks about the Chinese Internet industry in general, the name Tencent should come to mind as it is one of the biggest players there. Tencent owns the QQ instant messaging network and popular portal site qq.com.
Posted by: Richard | August 24, 2006 9:23 AMCheck out http://www.anobii.com - made in Hong Kong, China.
Posted by: Belle | August 24, 2006 10:03 AMtudousi.com
Posted by: Amom | August 24, 2006 9:17 PMlocal restaurant review and China dishes and recipes search.
Aiddi is a chinese web-top. One feature you won't see elsewhere is that you can cut&paste columns in any web page. This makes microcontent integration not be limited in rss.
Posted by: aiddi | August 24, 2006 10:01 PMi like
http://www.iephotoshop.com/
http://www.feedsky.com/
Posted by: n.stone | August 24, 2006 10:57 PMthat is good. thanks for the sharing
Posted by: peter | August 25, 2006 12:13 AMI have an interest in web services from Asia, mainly Korea, China and Japan and I'm doing my best to track all the Web 2.0 services coming out of Hong Kong on my personal site, linky here.
By the way, great article on Korea and China. Looking forward to read your Japan's section. Any idea when that will be? :).
Posted by: Angus | August 25, 2006 1:04 AMDouban absolutely is the most successful web app in China.also kijiji.com.I think the most interesting web app is Project Babel,a bbs app which has many interesting feature.It's site is v2ex.com.
Posted by: BlueF | August 25, 2006 1:14 AMhttp://www.v2ex.com/
i think tencent should be mentioned as a Top China Web Apps.
Posted by: windstore | August 25, 2006 2:10 AMTencent is far, far from being Web 2.0, and it's not a Web app developer. Besides, QQ is slowly being replaced by MSN (or maybe I'm just growing up).
Posted by: Micah | August 25, 2006 2:28 AMnot bad, but not good
Posted by: goodjerry | August 25, 2006 5:09 AMdouban.com is the best web2.0 website in china. dianping.com is most successful.
zhidao of Baidu is a creative web2.0 app in china.
Tencent is biggest internet company in China , because there too many people using QQ.
Posted by: cyberTao | August 26, 2006 5:34 AMDon't forget China Recruit.net - China's largest job search engine - http://china.recruit.net
Posted by: maneck | August 27, 2006 6:47 PMi don't agree.
Posted by: inforpic | August 27, 2006 10:40 PMDont forget www.iciba.com
China's top online dictionary. Tops 500 in Alexa.
Posted by: Chern | August 28, 2006 1:28 AMhttp://maplog.cn , a map+blog space
Posted by: Kevin | August 28, 2006 4:55 AMI recommend my self. http://www.8sheng.com
a Chinese social event website, inspired by the idea of upcoming.org
Posted by: Â?ëÁîüÁΩë | August 28, 2006 6:51 AMYupoo, a flickr clone,
should be mentioned
http://www.yupoo.com/
Posted by: Kevin | August 29, 2006 6:19 AMHi,
Wht don't you do a review of the Indian web scenario. It has 40 million users and is growing only second to China. Theres a site Webyantra (www.webyantra.net) that profiles Indian web2.0 sites. Maybe they could help you with it.
pras
Posted by: Prashant Upadhaya | August 30, 2006 5:11 AMI live in China, and am in the process of starting a rep office for a US company. The language is probably the biggest hurdle for foreign companys. I have study for a year and still speak horrible Chinese.
Bill
Posted by: Bill Lindeman | August 30, 2006 8:17 AMhow about http://www.flashmov.com
Posted by: Samuel | August 30, 2006 7:27 PMMofile TV http://tv.mofile.com/ is a much better video sharing service.
hey. could u guys do a top web 2.0 apps in Iraq?
cheers
Posted by: Jansen | September 1, 2006 7:44 PMHello, Mr. Richard. I have gotten good advice from your blog for so long time. Thanks for your good work.
I am working in Chinese blogosphere, social networking service firm. http://www.ufeel.com may be considered in Chinese WEB2.0 spectrum. There are many clone of US WEB2.0, however, there are player seeking different values. :)
Chinese blog players such as bokee, blogcn, sina blog have their strength, however, somewhat far from WEB2.0 philosophy. Sina blog focuses on star marketting, so there may be weak presence of individual user blogs. In these players, there seems to be little community and weak interaction in the atmosphere of blogosphere. The quality of UCC is not so impressive.
Ufeel seeks different community by focusing UCC, interaction. Regards.
Posted by: Eric | September 10, 2006 12:48 AMHi, just a quick comment, I talked to the creator of iephotoshop, a pretty smart guy...hehe...and I think he's started working on the Firefox-photoshop...
IE still dominates Chinese Browser market, still having 99% of market share,..if the statistics I saw a few weeks ago was accurate.
Posted by: terry xu | September 11, 2006 1:22 PMhi
where the editor?
need your help
after three days hard work
my website
http://www.IEPhotoshop.com
is allow firefox online make picture
is not " IE ONLY"
please help me modify this doc.
thank you very much !
Posted by: stone | September 12, 2006 7:39 PMHi stone, I've updated the post now. Thanks for letting us know.
Posted by: Richard MacManus | September 12, 2006 7:49 PMchina is a really interesting topic to look up, here is a website to try out. www.greatwall.com
Posted by: jj | February 2, 2007 11:25 AMIt goes on to say that big companies dominate China's internet market, rather quickly squeezing out the smaller ones.
Posted by: david law | March 19, 2007 1:25 AMthink tencent should be mentioned as a Top China Web Apps.
Posted by: Â?§Ëë£Ë°£50ÁöÑÊó∂Â∞ö | March 19, 2007 11:06 AMI would like to mention LifesterBlog.
Posted by: Ed | May 3, 2007 3:51 PMA new blog 2.0 + social networking site focusing china and hong kong.
i must say the comments have become as important as the posts - perhaps moreso. I'm hoping this post about China's Web application market is no exception, because China is (obviously) a huge country and one blog post can't hope to cover it all.
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