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BLOG: Global brands face content conundrum in China

Mark Smith | Sept. 20, 2013
For global brands seeking a place to grow their consumer base, there are perhaps very few places on Earth more lucrative than China. However, the reality is considerably different.

The presence of firewalls in China appears to be having little impact on the country's Internet usage. A recent study by the United Nation projects that by 2015, the number of Chinese Internet users will surpass today's 565 million English-speaking users the world over. Based on this projection, the time now is ripe for businesses to grab onto the gamut of business opportunities that are arising within the Chinese market as a result of greater Internet usage. With China's exponentially expanding middle class showing a strong preference for foreign brands and for online engagement, marketers now have opportunities like never before to reach out to a large pool of potential customers.

The reality for marketers

However, the reality for marketers and businesses trying to penetrate the Chinese market is considerably different. While more than half a billion people use the Internet in China, slow network speed and spotty interconnectivity tax the end-user experience. This is made worse due to the presence of state-run firewalls and the outlawing of foreign-run VPNs in China, which means access to foreign brands' online content take a comparatively longer time to load for Chinese end-users. A study found it takes the average luxury brand's website more than 16 seconds to load.

Businesses that attempt to bypass latency issues at international gateway by hosting content within China encounter a different kind of problem - the process of securing a local-hosting licence from the Ministry of Industry and Information Technology in China can be lengthy, troublesome, and costly. Moreover, a local address and a contact person is required when applying for the licence, which can be problematic for some companies who do not yet have a presence in the market.

Virtual hosting providing alternative

There is little doubt that online shopping is vibrant and thriving in China. Last month, on Single's Day, China's equivalent to the US Black Friday, e-commerce sites raked in about US$4.6 billion. For global brands wanting to get into this action, virtual hosting offers an alternative solution to the problem of slow Internet speed and unreliable connectivity.

Under a virtual hosting arrangement, brands' content can be cached and distributed as needed through a wide in-country content delivery network. For example, last year, Savvis launched a virtual hosting service that allows global brands to reach the coveted Chinese consumer market by caching their content locally, while ultimately hosting their content in data centres in Hong Kong, Singapore, or Tokyo. Not only are they able to simplify the process of getting web content into China, they are also able to offer a more fruitful end-user experience as a result of a local web presence.


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