péntek, 24.06.11

China likes home-grown media players, particularly in the digital space

Don't come to China and expect to deal with the same media owners that you do in Europe or the US. In fact, the history of western digital brands in China is littered with casualties.

by Alex Tan, Managing Partner, MediaCom China

China blog

Don't come to China and expect to deal with the same media owners that you do in Europe or the US. In fact, the history of western digital brands in China is littered with casualties. Yahoo! entered the market in 1999 but had developed only a 0.5% share in the market a decade later. Ebay arrived in 2001 but sold out in 2006 after amassing a very slight 5% share, while Google successfully entered the market in 2005 and built a 35% share but has since, very publicly, relocated to Hong Kong. Facebook, YouTube and Twitter are blocked.

Of all the big western brands only MSN could be said to have built a relatively healthy position thanks to its popular Messenger platform, but it still remains a distant second in the Chinese instant messaging market.

In China, therefore, you will have to build relationships with a new set of digital (as well as traditional) media owners.

In search, that means Baidu - which had 64% market share and 38.5% year-on-year growth in 2009.  Sina is the top portal in the sector generating RMB 4.9bn ($0.75bn) in 2009, and it also dominates the blogging and micro-blogging markets, while Tencent and Shengda dominate the online gaming market.

Growth rates are even more stunning in social media, online video and online shopping sectors. Social media is growing at 90% year on year and the top two players are Kaixin and Renren. Online shopping is dominated by Taobao (a MediaCom client), with more than 80% of the consumer-to-consumer market.

Again, this is sector is growing rapidly with 94% growth and a total value of RMB 248bn ($37.7bn).  

Online video is growing at more than 95% per annum and is dominated by Youku and Tudou, which together have 80% market share. But it's not just the media owners that are different in China's digital space - behaviour, content and points of access all have their own characteristics.

Internet café usage is much higher (especially in lower tier cities where home PC penetration is low), music is mostly unlicensed, while video consumption is less about user-generated content and more about TV dramas and entertainment that can be instantly downloaded. Peer-to-peer usage is also highly popular (mainly to watch online video).

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