With half a billion Internet users in China representing 40 percent of the population, it offers a growing opportunity for businesses selling goods and services online on order to reach this target market. Disposable incomes are rising and business opportunities are increasing, so it makes sense that cloud application providers, eCommerce brands, and financial service providers want to reach China. But, if not done correctly, the investment could be wasted.
One of the biggest challenges is the ‘Great Firewall’. The Chinese government implemented the firewall as a form of Internet censorship and to protect its citizens. Web property owners and brands need to respect the firewall and understand the restrictions and guidelines – as well as monitor and localise their content not just from a language perspective, but also to tailor to the firewall.
Both when crossing the ‘Great Firewall’ and once inside China, there is a high risk of websites being blocked. “Adult” content and gambling are strictly forbidden, along with deep political views. So for instance, clothing, jewellery, and fragrance brands must ensure that photography on their websites is tasteful and that models do not bare more skin than deemed necessary.
It’s also worth noting that online shoppers in China are more likely to seek the opinions of others, so blogs, forums, and ratings are important, although they must be continuously moderated for inappropriate and political comments.
On the positive side, China’s Ministry of Internet Technology and Ministry of Commerce are finding ways to support and promote foreign investment in eCommerce. However, although China encourages eCommerce investment, navigating website regulations in China can be daunting. An extensive list of requirements includes verifying what licenses to procure and where to display them on your website as well as determining acceptable and unacceptable content.
Most organisations pay third party consultants and lawyers to help navigate the requirements and ensure compliance. However, without continuous compliance oversight, websites could still be blocked as new content is added and unblocking it is extremely difficult.
Hosting outside of China is also problematic. A typical website hosted in the US or EMEA takes 20 to 40 seconds to load in China. No website users will stick around for that kind of web performance. Even if you host a data centre in Hong Kong and maybe one in Singapore or Tokyo, you still have to go through the ‘Great Firewall’, adding 10 to 15 seconds. The Network Bench chart shows loading a web object from a data centre located in Hong Kong (red) vs. one inside the ‘Great Firewall’ (green) – Hong Kong is 50 percent slower.
Connections between different areas in China also pose a problem. Not all end users are in the major cities of Beijing and Shanghai. Millions of potential customers reside in tier 2 and tier 3 markets. China’s Internet infrastructure has limited peering points, fragmented network topology, and poor connectivity. Consequently, setting up data centres in major cities is just not enough. Performance will not meet your or your end-users’ expectations.
Building your own data centres throughout China would take years and have a high price tag in consulting fees and lawyers. Colocating in China, will not help you reach all of China with consistent performance and, may still require you to hire a consultant to help with regulations, licensing, and content.
Retail brands that only want to dip their toe in China, can use online “malls” including Taobao and TMall, but this will not establish your brand and build a market in China.
Another option is to work with a content delivery network provider that has points of presence in mainland China and local expertise to help with licensing, advice on content, and keep websites from getting blocked by content governing bodies.
The network can also monitor regulatory changes, from both business and technology perspectives.
Jeff Kim is President & COO of CDNetworks Americas/EMEA
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While respecting the laws of different countries is fair to ask, there is an element of hypocrisy and contradiction concerning China's Internet restrictions.
Various organisations including the WTO, companies and many countries have complained that China offers an uneven playing field when it comes to doing business, and particularly online business.
Why should any business kowtow to China's ridiculous restrictions. The censorship is less about protecting the population from pornography, easily found even behind the Firewall, than about censoring free debate and politics.
Since social networks can be used for discussion, China blocks them. This censorship has the added advantage of effectively cutting out the competition allowing the likes of Baidu, Sina Weibo, Tencent, Tianya, RenRen and Jiepang kill off any chance of Google, Twitter, Facebook or Foursquare gaining ground.
Such restrictions, it could be argued are against the spirit of the World Trade Organisation rules even if not directly breaking them.
For large companies, who can employ people to set up and run pages on Chinese social networks, restrictions may not be a major issue. But for small companies and individuals trying to break in to the Chinese market, it is a minefield, not only in terms of language but of cost.
In the west there are many free and easy facilities to post online. Such platforms do not exist in China. Why should a small business using Blogger or Google Sites have to pay to set up another site inside China just because of the country's ruler's paranoia?
There are no real alternative to the excellent tools like Google Drive which enables businesses to share documents between groups or individuals. This is also blocked, more likely due to petty attitudes concerning Google rather than any attempt to stop sharing of things deemed sensitive.
While it is unlikely to happen, ALL foreign companies should force China's hand and make things difficult by only using these restricted services. Forget Skype and only use Google Hangouts, only chat on Google Talk and share documents via Google Drive or DropBox. Presentations might be shared on YouTube or Vimeo, while pictures could be shared on Picasa, Google+ or Facebook. Similarly, business updates could be posted only using Twitter, Facebook or Google+. Should this happen China might find its self in a digital wasteland, and find itself unable to do business effectively. Then and only then will the Firewall be gradually lowered.
Encouraging western enterprises to kowtow and play by China's silly online games will not improve things for either side in the long term.
Can you imagine the uproar if the west blocked all Chinese websites or slowed them to a crawl? China should play ball by the same rules as everyone else.