• Asian Women Internet Savvy
• Asians Embrace the Internet
• China, world's second-largest Internet market
• Size Matters in Asia's Cyber Race
• Telecom market in China
• Spending Power in China

User growth lies in Asia: Yahoo CEO
It aims for threefold improvement in its operating margins

Internet giant Yahoo has set its sights on achieving a threefold improvement in its operating margins over the next three years and Asia looks set to take on a much bigger role in meeting the new target.

'In the last 12 months, non-US Internet use grew 11 per cent.  US Internet use grew only 3 per cent. Our growth as far as unique users is definitely outside the US and definitively in this part of the world (Asia),' said Yahoo CEO Carol Bartz.

According to data compiled by research firm Nielsen Online and the International Telecommunications Union, only 19.4 per cent of Asia's population or some 738 million users are now online.

The figure places the continent in second-last place before Africa in terms of Internet penetration, languishing behind North America (74.2 per cent) and Oceania (60.4 per cent).

However, with more users coming online in developing countries such as Indonesia and Vietnam, the number of regional Internet users is projected to grow as much as 16 per cent annually until 2012.

'Those (16 per cent annual growth) are big numbers and frankly, I think it could be bigger than that,' Ms Bartz said at a lunch talk organised by the American Chamber of Commerce here on Tuesday.

The former chief of design software firm Autodesk was appointed Yahoo's chief executive in January this year to orchestrate the company's revival.

The company was once a dotcom darling but its shares have been languishing since the failed hostile takeover by Microsoft last year. Yahoo also ceded the Internet search crown to Google and was dealt a further blow as the global downturn crimped online advertising spending.

Since taking on the position, Ms Bartz has swiftly moved to revamp Yahoo's operations through job cuts and stripping out unprofitable offerings. In the search segment, for example, Yahoo teamed up with Microsoft in July this year to take on frontrunner Google.

Under the 10-year pact, Yahoo will use Microsoft's Bing search engine to power the search function on all its websites.

Beyond slashing the company's cost base, Ms Bartz is also attempting to grow Yahoo's ad revenue by offering marketers more targeted ways to spend their advertising dollar.

'Offline advertising in this region - print, TV, newspapers and billboards is about US$73 billion. So little of that has come online,' she said. 'The ability over the future, as Internet growth occurs, to bring more advertising online in this region is enormous.

'It's not we that we don't like advertising, it's bad advertising (we don't like). It's about how we can bring relevant advertising to relevant people.'

By growing its top line and controlling costs, Ms Bartz hopes to triple the firm's operating margins from 6 per cent currently to as much as 20 per cent over the next two to three years.

'Six per cent operating margin is terrible. Terrible.' - 2009 November 12  BUSINESS TIMES

Bargain hunters in Asia Pacific are using the Internet to seek out best buys from online merchants and auction websites, according to the Visa e-Commerce Consumer Monitor.

The survey found that the most important reason for respondents to shop online is to be able to compare prices and save money (42 percent), followed by searching for bargains or discounted items (24 percent) and saving time (23 percent). The ability to compare prices and save money was the top reason cited for shopping on the Internet for respondents from Korea (54 percent), Australia (52 percent) and Japan (41 percent).

Bob Joubert, Visa country manager for the Philippines, said: “Budget conscious consumers in Asia Pacific know that some of the best buys are on the Internet. As online merchants across the world offer attractive promotions during lean economic times, there is no better time for consumers to land cheaper buys from the Internet. From knick knacks to branded goods, online shopping is not only a smart way to save money, but is also a convenient way to browse a retailer’s full range of products whether at home or abroad.”

Across the region, more than three in five respondents said they have participated in online auctions - 79 percent said they participated in an online auction on a local website and 69 percent have participated in an online auction on an overseas website.

Heading the list, respondents from Hong Kong (91 percent) are the most likely to have participated in an online auction on a local website, followed by Australia (87 percent) and Korea (77 percent). Overseas online auction websites are most popular with respondents from Hong Kong (83 percent), Australia (72 percent) and India (71 percent).  - 2009 September 21   PHILIPPINE STAR

Chinese Cozy Up to E-Commerce
A new breed of younger, more affluent consumers will drive e-commerce on the mainland

Many analysts argue that Chinese consumers are conservative spenders and not willing to buy on credit or engage in e-commerce. The numbers initially seem to support such arguments as China's household savings rate sits at 40% vs. less than 1% in the U.S. Credit-card penetration is low, with fewer than 50 million cards in circulation for an emerging middle class of 250 million.

While China's Internet users will hit more than 140 million by the middle of 2007 and will overtake the U.S. as the largest group within the next few years, critics believe that e-commerce will never take off here because, as a matter of culture, Chinese do not like it. But do these numbers and conclusions incorporate the seismic shifts in consumer habits in China that have been taking place in the last decade? The answer is a resounding no.

These skeptics fail to look at the changing demographics of China's consumers. Sales are now being led by a younger generation that is willing to buy on credit and shop online. In surveys and interviews that the China Market Research Group conducted with Chinese youth between the ages of 18 and 28 in Shanghai, Beijing, and Guangzhou, more than 80% said they were willing to buy items online and over 70% said they would use a credit card if they could.

Baby-Boomer Optimism

The results indicate that old stereotypes of Chinese consumers stuffing yuan under their mattresses can no longer be attributed to the increasingly well-off middle-class Chinese youth segment. This bodes well for multinational companies that hope to tap into China's fever for Web 2.0 and e-commerce.

It is true that older generations of Chinese do save a lot—many have lost their pensions and are worried about paying skyrocketing medical costs. Most economists look at these age groups and argue that China's economy will have problems in the future if the government cannot jump-start consumer spending.

However, many of these economists have been far too simplistic in their analysis of the future of China's household savings rates in the coming decades. Consumption patterns are very different for Chinese born after 1978—China's baby boomers. They have experienced 30 years of economic growth and political stability similar to those born during the post-World War II years in the U.S.

Wearing the Wealth

Our surveys show that Chinese between the ages of 18 and 28 save very little or actually buy on credit because they are so optimistic about China's economy and their own earnings potential. Their salaries are regularly increasing 25% a year as the competition for even junior talent is fierce and they job-hop like mercenaries.

These young professionals want to show their status in the workplace and spend nearly all of their salary on items such as Nokia mobile phones, Zara clothing, and Estée Lauder cosmetics. In focus groups we conducted in Beijing, we found that more than 70% of young women making between $500 and $2,000 a month expected to travel to Hong Kong and/or Thailand in the next three years.

Instead of running up bills on a MasterCard or American Express the way consumers in the U.S. do, Chinese youth finance their lives of leisure by borrowing from their parents and grandparents. Having experienced the bitterness of the Communist-Nationalist Civil War and the Cultural Revolution, older Chinese are determined to see their children (almost always their only child) happy and want to live vicariously through them, and therefore shower them with money.

Credit-Card Culture

Chinese youth overwhelmingly want credit cards. To date there are fewer than 50 million credit cards in China compared with more than 1.1 billion debit cards. However, 2006 saw the addition of 15.6 million credit cards and 200 million debit cards, so more and more Chinese are adopting credit cards.

This is a big jump from 2004 when only 10 million cards were in circulation. The trend will continue as the Chinese banks up their services to compete with the onslaught of foreign banks such as Citigroup and HSBC that are bulking up their offerings in China due to liberalized regulations.

The No. 1 reason so few people have credit cards, according to our findings, is not that they do not want one but that it is simply too difficult for the average Chinese person to get approved for one. They have to spend far too long dealing with an inefficient system of credit checks and subpar service, where consumers regularly have to wait in two-hour-long queues to see a teller, unless they have VIP cards.

Keep It at Home

Another problem is that even if you do get your hands on a credit card, domestic cards still lack viable credit limits because of weak risk-management departments. We interviewed one wealthy Chinese man who charges more than $1 million a year on his international American Express card but cannot get a Chinese credit card with a credit limit of more than $20,000. And even that comparatively high limit was only possible because he knows the chairman of the bank personally and has built up trust through transactions involving his company.

Chinese banks are also pushing to issue more credit cards to stave off flocks of Chinese shifting their money to foreign lenders. The state-owned China Daily newspaper conducted an online poll that showed 57% of Chinese wanted to switch their savings to foreign banks once they are able to in March. Chinese banks are continuing to reform and see credit cards as an important component of their futures if they want to compete on an international level.

The Industrial and Commercial Bank of China and Bank of China have each issued 10 million credit cards to date and market leader China Merchants is pushing hard to develop credit cards for use in online transactions. China Merchants has done more than any other Chinese bank to come up with co-branded credit cards for use by Chinese consumers—especially younger consumers. To date, China Merchants has forged relationships with Young Card, Bertelsmann, Rayli, Hello Kitty, MSN mini, Ctrip , Air China, and China Southern to name a few.

Virtual Money

The rise of virtual currency used in online gaming environments in China shows that Chinese youth love e-commerce—if taking part is convenient. Because of the lack of credit cards in circulation, for many Chinese consumers the first introduction to e-commerce comes through the use of virtual currency. Several hundred million dollars' worth of virtual currency was purchased last year, and the size of the virtual currency market is growing 30% annually.

The numbers have become so large that the Chinese government has issued warnings about the effect virtual currency can have on China's financial stability by causing money supply problems, inflation, and avenues for money laundering.

Millions of Chinese youth are spending hours each week playing online games, writing blogs, chatting through instant-messaging services such as QQ, and streaming music from portals such as Baidu.com . To facilitate online transactions and retain active users, many of these Internet sites have minted virtual currency that can be exchanged for goods and services.

Chinese netizens like virtual currency because acquiring some does not require a credit card or even a bank account. Tencent, the provider of the leading QQ instant-messaging service and leading online game host, is China's virtual-currency leader. Its customers can purchase Q-coins using cash, through mobile-phone cards offered in tandem with China Mobile, or up until recently, by winning the coins in online gaming competitions.

eBay vs. Taobao

The coins, which are purchased at a rate of one Q-coin to one yuan, are valuable to online consumers as they can be used to purchase ringtones, use antivirus software, send e-cards, and in some cases buy tangible goods. When one combines the Q-coins with similar offerings from Netease.com, Baidu, and Sina, the virtual-currency market becomes a power that can influence China's financial markets.

Although eBay did not do well in China, e-commerce is booming. Many Chinese are going to online auction sites and stores in search of broader product selection or better deals than they can find around town, and every year more and more Chinese are flocking to online auction sites such as Alibaba's Taobao or online sellers such as dangdang.com and Amazon subsidiary Joyo.com to buy products and services.

The aggregate of all online transactions in China is impressive. Last year, the total value of all online transactions, both business and consumer, soared to $127.5 billion, up from $85 billion in 2005. The consumer side represented a fairly small portion of this amount, but with an estimated 50 million Chinese engaged in e-commerce, growth is extremely promising.

Credit Grows Commerce

As more credit cards are adopted, then e-commerce will continue to grow. The demand is there, as shown by the eager adoption of virtual currency. China's banks have to catch up to the demand by issuing more credit cards. Multinational companies that can integrate e-commerce processes to tap into China's emerging middle class will do well.   -  BUSINESS WEEK     2007

Wide Swath of China Is Surfing the Internet

Internet use is spreading farther than expected in China, reaching smaller, less-developed cities, and would likely be even more popular if not for government controls, according to two surveys.

The surveys, conducted by the government-backed Chinese Academy of Social Sciences, are the most extensive on Internet usage in China to date. Researchers interviewed 4,100 people in 12 cities, from the major urban centers on the prosperous coast to interior towns where economic growth has lagged. The surveys show that Internet penetration is on average highest in the metropolises of Shanghai, Beijing and Guangzhou -- where one-third of all residents use the Internet -- but small cities of around 100,000 in population ranked a surprising second, with 27% of residents going online. That percentage surpasses the 24% rate in four leading industrial provincial capitals, according to the surveys.

Underpinning the growth in small cities is an array of factors, including government policies and free-market competition to provide Internet services, says one of the surveys, on small cities. In Yima, a city in hilly, rural Henan province, for example, a mining company vied with the local subsidiary of China's telecom authority to offer Internet services starting in the late 1990s. The result was low-cost Internet connections and a surge in Internet cafes -- 60 of them by early 2002 -- for a city of 120,000 where incomes average $500 a year and many residents can't afford a home computer

The findings, say the researchers who conducted the study, suggest that the Internet's impact is greater than previously thought, with implications for the future of the economy and the communist government. Far from being a tool of the educated and well-off in big cities, the Internet is cutting across income and geographical lines in China, creating a populace that is better informed and more demanding of the government, the researchers say. "The Internet's emergence has filled a void," Hu Xianhong of Peking University wrote in the survey on small cities.

Overall, the surveys found that 56% of the 68 million Internet users in China are male, and 58.2% are between the ages of 17 and 24. Nearly 40%, who are either students or unemployed, have no monthly income, which has a damping effect on electronic commerce. Only one in five Internet users has made a purchase online, and most are for small items such as books or movie tickets. However, nearly 12% of online orders were for the purchase of computers.

The surveys also include good news for China's three Nasdaq-listed portals -- Netease.com Inc., Sina Corp. and Sohu.com Inc. -- which are the most frequently used services for accessing Web sites. And Chinese users spend most of their Internet time browsing Web pages and reading news.

This emerging online community, according to the surveys, shares ideas that could pose a challenge to a government often bent on control. More than 85% recognize a role for the government in managing and controlling the Internet, and most are concerned about pornographic and violent content. But fewer than 13%, the survey says, believe that the government should police political content, and overwhelmingly people see the Internet as a medium allowing greater freedom of speech and criticism of government policies.

"Most people strongly believe that the Internet will affect Chinese politics," says the study on Internet usage, authored by Guo Liang, considered a leading authority on the Internet's social impact in China.

Authorities, however, have sought to rein in this impulse, targeting for arrest those who disseminate dissenting opinions online. Last week, a civil servant in Hubei province, Du Daobin, was formally arrested on subversion charges for posting essays critical of the government and for organizing a petition protesting the detention of another Internet activist.

The surveys suggest that Internet usage would likely be even more widespread without government controls. In the small cities and provincial capitals, less-affluent populations rely on Internet cafes, the surveys say, and a crackdown last year has led to closings, reducing the number of outlets. In Yima city, the government canceled all licenses and limited the number of new ones it issued to 38 establishments, though some outlets operate illegally. The government, the survey says, has decided that Internet cafes should be limited to one for every 10,000 residents.  - By Charles Hutzler   Staff RReporter at Asian Wall Street Journal  18 Nov 2003

Hong Kong high users of Net

Hong Kong  Kong people are among the highest users of Internet radio and audio-visual content, thanks to a high penetration of broadband access.

In the latest ratings by ACNielsen and NetRatings, the SAR was second only to Brazil in Internet radio usage of 12 countries studied, and fourth highest in viewing audio-visual content.

``In most countries in this report, a 56K modem is the most popular tool to access the Internet. However, in Hong Kong, an astonishing 58 per cent of those who responded and have Internet access use either a cable modem or high-speed telephone connection,'' ACNielsen eRatings director Peter Steyn said.

``You have a better Internet experience with broadband, so there's higher usage for things like Internet radio and visual content.''

The survey, of 1,500 Internet users in each country, found email to be the dominant online activity, with an average of 85 per cent of those surveyed having used it.

The survey said email's popularity was because it was a cost-effective way to communicate across long distances and did not require high-speed connections.

The use of instant messaging, such as ICQ, was relatively low in Hong Kong, which was seventh on the list with 26 per cent of people having used the application in the past six months.

``Instant messaging is a great way to communicate person-to-person. It's especially popular in large countries where long distance rates are high. Perhaps that's why it isn't widely used in Hong Kong. Usually it's just easier to pick up the phone to call someone,'' Steyn said.

The report studied people aged 16 or older who had used the Internet in the past six months. Hong Kong was the only Asian territory in the survey.     - By Sherman Chau      HK STANDARD     11 May 2002  

SemiAnnual Survey Report On Internet Development In China (2000.1)  

Statistics on Internet development in China, including the total number of hosts and users, user geographic distribution, traffic pattern, and domain name registration etc, are very significant and valuable in helping government agencies and commercial enterprises in making their policy and business decisions. In 1997, the State Council's Informatization Office and the China Internet Network Information Center (CNNIC) Working Committee determined that the CNNIC, in cooperation with the four major networks units in China, would carry out surveys on Internet development in China. 

CNNIC published its four previous reports ("Survey Report on Internet Development In China") in November 1997, July 1998, January 1999 and July 1999. These survey reports were well accepted by the general public both in China and in other countries. They were widely cited as the leading authority on China's Internet statistics. Users, government organizations, enterprises and news media request the CNNIC to regularly do it and publish the results. To satisfy the needs of the public, CNNIC decides to do the survey as a semiannual activity. The surveys will be conducted and published in January and July of each year.  

The current survey covered many aspects of China's Internet, including total user number, total host number, number and distribution of domain names, international bandwidth for each of the  networks, and total number of WWW sites. The user information are statistically derived from the data collected through online survey. Internet and Web usage statistics, as well as users' opinions on current hot issues, have also been obtained through the online.  

Like the previous reports from the CNNIC, the survey has closely followed the methodologies adopted in other countries. Data is collected through submitting online questionnaires on popular Web sites and conducting software-driven online seeking. CNNIC conducted its online survey in   December 15-31, 1999. Survey questionnaires were placed on the home pages of famous Web sites in China. The survey is strongly supported by almost all the well-known Chinese ISPs and ICPs. The online survey received 363,538 responses. Among these responses, 202,432 were valid and used to calculate the final results. The number of valid respondents has increased tremendously, compared to the previous four surveys. The increase has greatly enhanced the accuracy of survey results.

1.Computer Hosts in China: 3,500,000. Among them, 410,000 are connected through leased lines and 3,090,000 are through dial-up connections.  

2.Internet Users in China: 8,900,000. Among them, 1,090,000 are through leased line connections, 6,660,000 are dial-up users and 1,150,000 use both. Besides the computer, users that use other equipment (for example mobile telephone, PDA and top-set) are 200,000.  

3.Domain Names Registered In The Top-Level Domain "CN":   

*AADN = Administration Area Domain Name   

The distribution of domain names by second-level of domain names. 

The distribution of domain names by geographic locations (provinces)  

4. Number of Websites in China: 15153 (approximate) 

5. Total Bandwidth of Leased International Connections: 351M. Countries directly interconnected to China's Internet include the United States, Canada, Australia, Britain, Germany, France, Japan, South Korea, etc. The detailed distribution among Interconnecting Networks is as follows.   

6. Results of Online Questionnaire: 

I. General Demographics

(1) Gender: Male, 79%; Female, 21% 

(2) Age:   

(3) Marital Status: un-married, 64%; married, 36% 

(4) Geographic Distribution (Province):   

(5) Education Attainment:   

(6) Occupation/Industry:   

(7) Monthly Income Per Capita:   

II. Use and Access 

(1) Access Location:   

(2) Who pays for Access:   

Among the Total Amounts of fee for Access Monthly:  

Work/School: 1,086,830,000(approximate)
Personal Fund: 1,025,810,000(approximate) 

(3) Money That Users Hope to Pay for Access Monthly: 

(4) Hours of Internet Use Per Week :17 hours 

(5) First Daily Login Time:

(6) Time Period of Most Likely Keeping Online (Results of Multiple Choices)

(7) Amounts of E-mail Accounts: 35,600,000  
Among Them, Free Mail Accounts: 26,700,000

By China Council for the Promotion of International Trade    2000-2001

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