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2010 Global Online Marketing Profile Forecast – China

Market opportunity

With a land area slightly smaller than the United States, China has a leading population of more than 1.3 billion, four times that of the United States. China has experienced rapid economic growth in the past 25 years and has become a major player in the world economy.

Despite the current economic crisis, China’s economy is still expected to grow 10% in 2009 according to Chinese Daily. Personal income continues to rise as workers migrate to the city in search of a higher standard of living. China’s first quarter statistics show that industrial production grew by 5.1%, retail sales by 15% and fixed asset investment by 28.8% year-on-year. In addition, sales of automobiles and appliances are increasing, and agricultural production continues to expand.

In another article of Chinese Daily, it is reported that the disposable income of urban residents increased 10.2% in the first quarter of 2009. When adjusted for inflation, the increase reached 11.2%. In addition, the disposable income of rural residents also increased by 8.6%. A study by the State Council Development Research Center (DRC) shows that China’s middle-class consumers (those consumers who earn an annual income of 45,000 to 180,000 yuan or between $6,000 and $25,000) will grow to an estimated 500 million by 2026.

China has become one of the most watched markets in the world economy. Their integration into the world economy has driven dramatic changes in world economic growth before the economic crisis. China is likely to continue expanding for some time after the world economy returns to normal.

Best segments in the industry

According to a report by the US Commercial Service (CS), there are many opportunities for US exporters in these sectors: energy, chemicals, machinery, telecommunications, medical equipment, construction, franchising, and financial services. As the sectors with market potential for US companies expand, China will undoubtedly remain an important and viable market.

Regulatory and tariff overview

Chinese Daily reported that China would maintain its general tariff at a rate of 9.8% in 2009. The Ministry of Finance (MOF) announced that from January 1, 2009 import tariffs on five commodities would be reduced. At the same time, there will be an increase in export tariffs for sectors that produce pollution and consume a lot of energy. The average tariff rate on agricultural and industrial products in 2009 will remain unchanged at a rate of 15.2% and 8.9%, respectively.

Although China allows imports from companies that register with the Chinese Ministry of Commerce (MOFCOM), the Chinese government requires certain imported products to be inspected and accompanied by formal certification.

online marketing opportunity

The growth of Internet users in China has accelerated in recent years. It is estimated in the reports of Xinhua that there are 290 million online users in China. predictions by JupiterResearch show that in 2011, the world’s online population will be 1.5 billion, with explosive growth rates in China and India. Report JupiterResearch states that by 2011, Asians will make up about 42% of the world’s online population.

At the current rate of growth of China’s Internet population, the number of Chinese Internet users will exceed the number of American users sometime this year. Although online penetration in China remains low at 21%, it is sure to increase in the coming years.

Online language preferences

The predominant language in China is Mandarin Chinese. Although many Chinese people start learning English at a young age in elementary school, the majority of Internet users use Mandarin Chinese. They perform most searches in simplified Chinese characters. Navigating English sites for some can be difficult but manageable. However, due to the increasing number of multinational affairs conducted in China, English has become popular in China in the business world. Overseas businesses have found it extremely helpful to translate at least one web page into Chinese to reach Chinese consumers.

search engine profile

According to the Chinese market research firm international analysis, China’s largest search engine remains the dominant Baidu, often regarded as the “Google of China.” It sweeps the market with a market share of 59%. Despite China’s economic slowdown, Baidu says revenue rose 41.1% in the first quarter of 2009. Baidu’s main competitor, Google, holds 30.6% of the market share. However, Google’s market share in China is expected to continue to grow with Google’s recent launch of a new music search product.

Other search engines used in China include: Yahoo China with a 6% market share, Sogou with a 0.8% market share, Zhongsou with a 0.7% market share, Soso with a 0.7% and NetEase with a market share of 0.4%.

Summary

As one of the countries with the fastest growing economy in recent years, China shows abundant market potential. With the increase in online users and the expansion of different market sectors, China holds great promise for the global expansion of foreign companies. For these reasons, Global eMarketer classifies China as a Tier I market for global online market opportunities.

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