China: Land of opportunity?

According to the latest data from the World Bank, China has almost half a billion internet users; that is twice as many users in the United States. But that is not all, while in the U.S. roughly 75% of the population already has access to Internet, in China it comes down to about 35% of the population. Therefore, what we see today is only the tip of the iceberg.

These figures must be mouthwatering for any businessman craving for a piece of that massive online market. Nevertheless, I came across some facts that really put things into perspective:

Last year, Google, the world’s most profitable search engine (thus far) shut down its Chinese website due to censorship related issues, leaving the local Baidu without any close competitors. Still hoping to stay in the game, Google decided to continue operations in China with one of its side businesses; Maps. In May 2010, China’s State Bureau of Surveying and Mapping set a one year deadline for companies operating online map services to comply with certain bureaucratic requirements in order to obtain a license to continue business. A few months later, the government agency launched “Map World”, a competing online mapping service.

In other factoids, Chinese entrepreneurs are already well on their way to creating dotcom giants in fields that have been proven to yield high profits in western countries, such as e-commerce and video broadcasting.

Youku, the Chinese version of YouTube, has reported a 100% increase in revenues per year for the last two years, and is worth over 3 billion dollars.

Dangdang, the equivalent of Amazon, controls half of the Chinese online market for books and media. The price of its stocks doubled on the same day of its initial public offering on the New York Stock Exchange last December.

So maybe these areas of the Chinese online business don´t look so promising anymore for western dotcoms, but I am sure there are still plenty of opportunities out there.