There have been many recent developments in China’s on-again, off-again relationship with the Internet.
Beijing is one of the most active governments when it comes to countering what it perceives as foreign interference and threats to its national sovereignty, and that means in the virtual world as well.
Beijing has recently stepped up measures to prevent web content contrary to its laws from reaching its people. Reports from foreign companies indicate many are running into problems dealing with the country’s firewall and the blocking of VPNs (virtual private networks) that allow users to access foreign sites.
Yet at the same time, foreign commercial interest in China’s online space has never been higher. Much of it was driven by the high-profile IPO of Chinese e-commerce giant Alibaba in New York, which at $25 billion was the biggest IPO in history, according to Bloomberg.
This presents a daunting challenge for businesses trying to survive in China’s cyber marketplace. And it is a lucrative market — Forrester Research reports e-commerce in China will reach $1 trillion annually by 2019.
Joseph Cooke is more familiar with this dichotomy than most. Cooke, director and founding partner of Web Presence in China, deals with it on a daily basis as a leading consultant to businesses hoping to access e-commerce space.
Last Thursday, in a discussion hosted by the Canada China Business Council in Vancouver, Cooke noted — despite the chaos experienced by companies trying to access China’s cyberspace from abroad — the environment itself has drastically improved, ranging from the availability of qualified tech designers to the ever-improving bandwidth
That’s why Canadians who want a piece of Chinese e-commerce need to do one thing above all else — create and host a site domestically in China, behind the firewall.
“It’s a mind-bender for IT folks sometimes, having to give up control and set up a new website in China,” Cooke said. “People worry about privacy issues, the bandwidth, all those things. But you have to realize that the firewall has a speed of 1.5 MBps (megabits per second) … that means a website from abroad will take 30 seconds or more to load, even if it’s not blocked. As a consumer sitting in front of the computer, you wouldn’t be very happy with a page that loads up in 25-30 seconds.”
Cooke started his company in Beijing several years ago (and now boasts offices in Hong Kong and Australia, in addition to Vancouver), and he said he has seen first-hand the evolution of the market. Recent years have seen incredible growth (one tech client, Crucial.cn, saw sales of certain products spike more than four-fold in a single year).
Even so, Cooke said the majority of his clients are American not Canadian. He attributes that to the mentality of businesses approaching the Chinese market (U.S. companies speak in terms of “owning” the Chinese market, he said, while Canadian businesses tend to be cautious in testing the waters). “Most of the recent volatility has been with VPNs and cloud providers, the guys outside of the market itself,” Cooke said. “For those who make their websites 100 per cent for the Chinese market, including basing it in China, there are ample opportunities to do business … and the market is so underserved. I can’t stress that enough.”