China Internet Experiences

On: April 20, 2008
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About Pieter-Paul Walraven
Besides enjoying my MA New Media and doing research on Web 2.0 developments in China at the UvA I am working 2 days a week as a project assistant at KREM (www.KREM.nl). KREM is a web 2.0 oriented company which specializes in so called corporate social networks. Movies: Koyaanisqatsi, O Brother where art thou?, Amores Perros. When not studying: Golf!, running, traveling, China, Web 2.0. Books: Life of Pi, War and Peace, The World is Flat. Furthermore I am currently doing research on Web 2.0 in China and Chinese Web companies expanding overseas. For this MA thesis research I will travel to China on the 14th of April to interview the most prominent Chinese Web companies that have the ambition to expand internationally.

Website
http://pietchinathesis.wordpress.com/    

Restaurant/sleeping compartmentFinally, after a 24 hour delay due to an annual trade fair in Guangzhou I am on my way to Shanghai. While listening to the snoring of my opposite bunk bed neighbor, smelling the noodles of the next door restaurant compartment and watching the rice fields blended with factories pass by, I will summarize some of my experiences and findings so far.

My research started in Hong Kong where I stayed for 4 days. Back home I had arranged a meeting with some legal experts that have been consulting prominent foreign IT companies operating in China. During an extensive dim sum lunch they told me a lot about the current possibilities or rather restrictions that Chinese companies with international ambitions have. It is difficult especially for the smaller companies to expand overseas because it is rather hard to get money out of the country unless you are in a joint venture or listed in a different country. An interesting remark that one of the legal experts made, was:

“The Chinese government is only capable of making restrictions, it is simply too busy to encourage companies to go international”

The 3rd day of my stay in Hong Kong after meeting several experts and people that could possibly help me with some relevant guangxi (connections), I realized that I needed to have some business cards made. Naturally this is very easy to arrange in Hong Kong. In a back alley somewhere in Central my cards where finished within a day. The next morning it was time to head off to Shenzhen where I could proudly present myself as being an official ‘New Media Researcher’.

QQ In Shenzhen I had set up appointments with Tencent’s Richard Chang, Technology Strategist U.S.Office, Tristan Han, Sr. Product Manager International Product Center, and Thijs Terlouw, a Dutch developer working at Tencent’s innovation center. Tencent is one of China’s biggest Internet service portals. One of Tencent’s most popular products, QQ, an instant messaging platform, is used by tens of millions of Chinese Internet users. Furthermore Tencent offers community aplications, search services and game oriented products.

After a 1 hour drive from the center of Shenzhen where I was staying, I arrived at the Shenzhen High-Tech Industrial Park (SHIP) where Tencent’s head office is located. After Thijs showed me around on his department and blew me away with some of the new applications he is currently working on, it was time to start my interview with Richard and Tristan.

Tristan started by providing me with a brief overview of all international activities of Tencent till now. This was all very interesting, but the reason for my visit was to find out more about the future international developments of Tencent! After enquiring about this, Triston was surprisingly open and told me among others, that Tencent is planning on expanding its activities in Vietnam, India, Thailand, HK, Macau, South Afrika, Japan, Indonesia, the U.S., and in the near future also Eastern Europe. To avoid possible cultural differences for certain applications Tencent makes use of a distinct strategy for every single country it is planning on entering.

Because of the length of this post, but also because I don’t want to disclose too much information of my thesis results I will sum up a few of the more general findings I did during my visit.

– There seems to be a gap or indifference in the amount of people that play games in Asia and in Western countries.
– This gap is resonating through into the culture of applications: Asian applications are heavily influenced by gaming culture, such as collecting icons, dressing avatars, or earning activity points. In the West this is only starting to catch on.
– In general online entertainment is more advanced in Asian countries when compared to the West. In China this is probably due to the relatively low age of Internet users. Western Internet use tends to be more focussed on obtaining information.
– Since the US and European IM market is already mature, Tencent will use a strategy that is primarely focussed on cooperation with local companies and mainly focussed to gaming.
– Tencent will unlikely go international with its mobile services – very popular and in China – because the Chinese technology differs too much compared to other countries; “it is a unique technology” developed by the government (China Mobile).
– Richard Chang has launched internal innovation contests; employees can send all their ideas and win money. Thijs told me that in general the management is very open to new innovative ideas, creativity is encouraged.

These are only a few outcomes of the very interesing interview and tour. An interview that ended with Tristan showing me a roadmap of all Tencent’s international innitiatives, unfortunately I was not allowed to take a picture of this!

Before saying goodbye Tristan showed off one final application: QQ Pet and during loading he tells me

“I haven’t started QQ Pet because in our meeting it will die!”

Nationalistic QQ PetTalking about increasing the engagement level…… Feeding a QQ Pet will cost special QQ coins that can be obtained through special QQ cards. You can buy these cards almost everywhere including post offices, kiosks, software stores, Internet cafes, supermarkets, convenience stores, and so on. Read more about it here.

In general I was truly blown away by the level of innovation, the emphasis on employee created innovation, but also the determination of Tencent’s employees. Also the company culture an atmosphere came across as relax, with stuffed QQ animals and ping pong tables everywhere. After the tour and interview I had lunch with Thijs and his girlfriend (who also works for Tencent). We talked about the companies culture and how Thijs likes working in Shenzhen for a much lower wage than most developers in the Netherlands.

Shenzhen High-Tech Industrial ParkAt 14:00 I had set up a meeting with a government official in charge of international relations of SHIP. After the lunch I headed off to the Virtual University that was located just 15 minutes down the road. I will not discuss this meeting too extensively. All I can say is that it felt as if I was an important international investor; a huge boardroom was prepared with luxurious sofa sized chairs and plenty of drinks and snacks.

After being overloaded with a bag filled with 2 kilos of background information (unfortunately most of it in Chinese), and the usual exchange of business cards (two hands!) I was able to briefly interview, Li Xiaodong, SHIP’s international spokesperson, only an hour before a big Korean delegation was expected in an even bigger boardroom next door.

We mainly talked about the international future of the park, encouraging innovation domestically and some other relevant topics. When the Koreans started pouring in it was time for me to leave. I had to catch a train to Guangzhou where I had set up a dinner meeting with an American entrepreneur that consults foreign companies on SEO (for Baidu) and Internet marketing in China.

Un till now my research trip has been very satisfying and I have already gained a deep insight in the situation. I am looking forward to visit more Chinese web companies in Shanghai and Beijing to find out how they are taking on the future!

I would like to conclude this post with a typical remark that Li made:

“in technology we have to follow for now, but we will dominate”

Unfortunately for some very mysterious reason I am not able to access my thesis blog in China. But not to worry, I have been invited by Gang Lu to write about my experiences on his MObinoDE blog, expect some posts there soon!

<update> Please read more about my Tencent visit at MobinoDE! – Pieter-Paul (added: 22/04/08) </update>

8 Responses to “China Internet Experiences”
  • April 21, 2008 at 8:23 am

    Currently, most of the free or commercial blog sites are blocked at China. So is wordpress.com – you could have known.

    To circumvent all the restrictions, ask one of your friends or family to install psiphon. It is probably also blocked, but that does not matter. Ask somebody to install it back in Europe and they’ll provide you with a url and a login. Now you can surf the web encrypted from China through your friend’s psiphon proxy, and access your own blog.

  • April 21, 2008 at 8:58 am

    I know that it is blocked, I was being sarcastic!
    But you are right, I should have realized it earlier; before entering mainland China!

  • April 23, 2008 at 2:41 pm

    – In general online entertainment is more advanced in Asian countries when compared to the West. In China this is probably due to the relatively low age of Internet users. Western Internet use tends to be more focussed on obtaining information.

    this finding is quite surprising for me, as a person living in Hong Kong.

  • April 24, 2008 at 7:50 am

    @ Damon: by advanced I did not particularly mean technologically advanced. In china more than 66% of the games are 2D/2.5D, which is not very surprising since the hardware that is used by the bulk of Chinese is not as advanced as in most western countries. So for instance graphics and 3D are less developed here, because there is no real need for this (yet).

    The businessmodel of the whole gaming industry here is more advanced when compared to the west; the very succesfull free-to-play model was first introduced here, it is becoming more popular in the west where the rather old fashioned of-the-shelf and subscribtion is still the most common businessmodel.

    Also the Chinese compaies that develop free MMORPG’s are more advanced in creating a community which, among others, increases the lifecycle of a game and the stickiness of its users.

  • April 27, 2008 at 4:30 pm

    Hoi Piet, leuk verslag! Kleine correctie: de dingen die ik op mijn werkplek liet zien waren producten van Tencent waar ik niet aan mee heb gewerkt. Waar ik nu aan werk is helaas nog geheim (nog een maandje ofzo ;))

    Veel succes nog in Shanghai en Beijing!

  • May 19, 2008 at 4:42 pm

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