We had no clue why, we had gotten a lot of traffic during the day from search engines and sites like hao123.com, but it was quite steady until our competitors copied our site. And then we realized what happened: they not only copied the design, but also our site measurement code that was embedded in the site. Thanks for giving us some insightful information on your traffic compared to ours, dear competitors!

Read the whole post here.

Tier1 cities:

• In the Tier1 cities like Shanghai, Peking, Guangzhou and Tianjin live only 6% of the Chinese population. They represent 13% of the gross domestic product.
• These cities are a strong competitions in terms of (foreign) investments and some markets are already close to saturation.

Tier 2 cities:

• In the 300(!!) Tier2 cities live 53% of the urban population. They represent 64% of the gross domestic product.
• Definition of a Tier2 city: Cities with up to 6 million inhabitants and a per-capita GDP of 34,000 RMB in average.
• These Tier2 cities offer a constantly increasing consumer market with a yearly income of 3,000 to 6,000 USD per household.
• Seen as a group, the Tier2 cities grow by 15% per year. 60% of them are located close to the coastal provinces in the eastern part of China.

Offline and online sales:

• Supply chains are far than efficient for foreign companies in China. Only 10% of the turnover is sold directly via retailers, whereas 42% of the turnover reach the consumer through three or more interconnected dealers in the supply chain. The result if a lack of insight into the behaviour of Chinese consumers.
• Only very few companies have direct access to consumers and sell their products online. Examples are Anheuser-Busch or Amway.

Some own thoughts / conclusions:

• 59% of Chinese people live in cities (Tier 1 + 2) representing 77% of the gross domestic product. Reversely, 41% live in rural areas (= roughly 560 million people), they stand for 23% of the GDP .
• The Tier2 cities are of growing importance. More and more companies try to open up this huge potential. From my experience, foreign companies have their headquarters in the Tier1 cities to set up business and gain first experience. But the potential to make money lies in the Tier2 and Tier3 cities. And this is not only true for cost reduction in manufacturing but increasingly for sales and market share growth.
• Parallely, the Internet penetration increases and this will sooner or later also bring online marketing and e-commerce along.
• Interesting will be how search engine market shares will develop. Right now, Baidu has a market share of almost 100% in rural areas. In the Tier1 cities it’s market share is reduced to about 40%, Google holds some 40% as well (I wrote an article before how market shares and demographic development interact in China). Anyway, this is a question about years, I suppose. But also makes clear that search engine market shares in China are not fixed yet. A lot of space to move is still available.
• What a potential for direct sales channels and e-commerce! Anyway, still some problems to solve like nationwide use and acceptance of credit cards for online payment, reliable and quick logistics and delivery services, etc. But with young Chinese generations heavily using the Internet already now, participating in social networking and web 2.0 tools, this is a good basis for the development of e-commerce activities. Not to mention the distances in China…

China Dating Domains
Domains for the 15 largest Tier1 and Tier2 cities: Beijing, Hongkong, Shanghai, Guangzhou, Nanjing, Chongqing, Chendu, Wuhan, etc.
Other Asia and beyond: Tokio, Seoul, Singapur, Bangkok, Taipei

The domain names all follow this pattern:
[cityname]-friend.com

Suggested business model:
Nice package for a dating or friendship community that targets whole China but also wants to focus locally as well. China is so big, why should a guy from Chongqing be interested in a girl from Shanghai? That’s why.

Single domains available

• humao.net
  meaning is similar to bargain with each other, could be used for a community-based classifieds portal. Detailed business idea available.
• luxiang.net
  means video, could be used for a video portal but maybe not necessarily another youtube-clone.
• maikuai.com
  means sell fast or buy fast. Why not try a Woot clone or power-shopping portal on this?
• cujin.net
• nano-trader.com
  business directory for nanotechnology related topics.

Demographic trends in China show that the population is continuously increasing. The urban population which was approximately 430 million in 2001 might reach 850 million by the year 2015, and the number of cities with over 100,000 people is estimated to increase from 630 (2001) to over 1,000 (2015).

China’s urban population has grown in cities of all sizes. Nevertheless, townships of between 5,000 and 10,000 people are witnessing the fastest growth. Although efficient and effective improvements of water supply and enhancement of water treatment have progressed in China’s large cities, environmental management in the expanding towns and townships remains a challenge. Pollution in these smaller urban settings is not well monitored and their development plans include only limited provision to concentrate on.
Source: Klako

Broken down into Asian countries, Google’s markets share looks like this:

I did some research and compared the positions of the search engines in the following Asian markets. If available I added the rough percentages in market share, sometimes the available numbers vary really heavily. Total percentage per country can exceed 100% as users use more than one search engine (depends on the source). Anybody got better, more accurate or additional numbers, just post them, I’ll update the chart.

It is very obvious that Google’s global market share is nurtured by high market shares in the US and EU. In some parts of Asia local search engines and Yahoo are often preferred. Why is that?

Possible reasons:

• missing language adaptation, Google mainly dominates English-speaking countries
• poor management skill, read the comments of this article
• local search engines better serve the desires of the search engine users. Example: Naver in Korea with a total different search result page layout that’s been copied by Google

It is also interesting that e.g. in Vietnam Google is the market leader whereas in the Philippines Yahoo obviously leads the market. And both countries are not English language dominated, I suppose. Any explanations for that?

Yes! Beer is good for the skin, didn’t you know? And for general health condition anyway. Germans don’t eat anymore as 7 glasses of beer substitute a meal. Prost! And there’s more about France and Sweden.

Once again the results are just amazing how heavily the Chinese users are adopted to the Internet and how intensively they use it. Advertisers in China should really have an eye on these studies as they contain very important information. And they should also raise some questions how to allocate marketing budgets, how much weight put on e.g. TV spots, how much attention on online marketing.

Embracing life online

• I live some of my life online: CN 86%, US 42%
• Online is as real as offline: CN 37%, US 16%
• I have a parallel life online: CN 61%, US 13%

Self-expression on the web

• I have expressed personal opinions and/or written about myself online: CN 72%, US 56%
• Online I feel free to do and say things I wouldn’t do or say offline: CN 73%, US 32%
• I sometimes express myself more strongly online than I generally do in person: CN 52%, US 43%

Relationships online

• It’s perfectly possible to have real relationships online with no face-to-face contact: CN 63%, US 21%
• The Internet helps me make friends: CN 77%, US 30%
• Online interactions reduce the time and attention I have for personal interactions: CN 51%, US 20%

Expanding the sexual universe

• With the Internet I am more likely to access adult material: CN 65%, US 28%
• I have made hot dates using text messages: CN 54%, US 20%
• The Internet has broadened my sex life: CN 32%, US 11%

Compare this information to my post about Online Marketing Trends in China.

Of course, the Chinese line of the most important websites in China is included again. It can be found in the top left corner of the map, the green line. Included are Chinese search engines (e.g. baidu ), web 2.0 sites (e.g. video sharing like tudou.com) and news and information sites like sina or phome.

Here is a screenshot, thanks for the great work!