This question originally appeared on Quora, and the answer that follows was provided by Linus Chung, Avid user of Chinese and US internet products; lived in China 3+ years, former tech/internet VC.
Linus Chung, Former Tech/Internet VC
Some of my observations on how Chinese internet users differ from US internet users:
Behavior:
* Usage skews more heavily toward IM, entertainment, gaming: Comparing the results of a Chinese (CNNIC) and US internet survey (Pew) will unveil some notable differences. Some of the top usage categories for Chinese internet users are IM (83% of Chinese users vs. 46% of US users), downloading music (76% of Chinese users vs. 37% of US users), and playing games (62% vs. 36% of US users). In contrast, US users tend to use email a lot more (48% of Chinese users vs. 91% of US users), and tend to use the internet for other productivity reasons more often.
In China, 3 of the 5 largest internet companies by revenue have a large portion of their revenue coming from games (Tencent, Netease, and Shanda), with the other two as search (Baidu) and portal businesses (Sohu). None of the top 5 internet companies in the US are gaming companies (Amazon, Google, eBay, Liberty Interactive, Yahoo). The reason for this difference in usage might largely be explained by demographics (see below).
* Use of mobile Internet more prominent: In China, there are 538m internet users, but over 1b mobile phone users. Some analysts estimate that the adoption of the internet lags mobile phone adoption by 4-5 years. With this in mind, Chinese users don’t see the mobile phone as something to use to check the internet when they are away from their computer, but many perceive it as their primary device for communications. It’s not surprising then, that mobile internet traffic has grown significantly in the last few years. One of the most popular internet sites Sina Weibo (a Twitter-like product) has seen its mobile share of total traffic go from 40% at the beginning of 2011 to over 70%.
* Less frequent use of real names on profiles: Chinese users tend to use aliases for their online personas. While this was predominantly the trend in the US over a decade ago (i.e., when AOL Instant Messenger was a dominant internet application), users in the US have become accustomed to using their real names online. Some will argue the reason for the Chinese users’ unwillingness to use real names is that they are afraid of government monitoring. I believe this rationale applies to a small minority. There has recently been talk of new legislation to require users on Chinese internet services to register with their real names. For some services, this has already been the standard practice, and the requirement is to only use real names when registering. Public profiles can still use aliases. I believe for the vast majority of Chinese users, it is a matter of personal preference to use an alias, perhaps a way to express one’s individuality.
There are a number of real name social networks (e.g., Pengyou, RenRen), where the service dictates that the norm is to use one’s real name. However, there are a number of services where users choose to use aliases, and this practice is much more prevalent in China than it is in the US.
Demographics:
* Chinese users tend to skew younger: Chinese internet users tend to skew younger, with the average user age being ~25 in China vs. ~42 in the US. This explains a lot when it comes to propensity to use IM and play games vs. email, and the kinds of services companies offer to cater to this audience.
Preferences:
* Different willingness to pay: An interesting dynamic exists when it comes to what many Chinese are willing to pay for and what they are not willing to pay for. I’m making generalizations here, but many Chinese are willing to pay extra when it’s for goods that can be outwardly displayed (to show off, to explain it crudely). For goods where there is intrinsic value but is not something that is outwardly displayed, there is generally an unwillingness to pay a premium. In this case, people just want the cheapest thing that gets the job done. So on the one hand, the Chinese love spending money on luxury goods (high end handbags, watches, jewelry), but the cheapest brand of home appliances (washing machines, refrigerators, etc.), which serve useful purposes but are hidden in the privacy of the home, are often the best selling. This phenomenon carries over to the internet. Chinese users are unwilling to pay for software or games, so piracy is a huge issue. Innovative gaming companies overcame this by allowing users to play the games for free, but they would make money by selling virtual items. Chinese users are far more willing to pay for virtual goods that they can use to show off in the digital world (e.g., special clothes for their avatar) or make them better at an online game (e.g., special weapons). The Chinese pioneered the free-to-play + virtual goods business model that Zynga and others in the US adopted. Another example is music. Chinese users won’t pay for a song. Instead, they’ll find ways to download it for free. Musicians found a way around this by charging for downloadable ringtones or even ringback tones (when you call someone and instead of ringing you hear a song), which Chinese users are happy to pay for because it is something externally displayed to demonstrate uniqueness.
A popular American news aggregation website versus popular Chinese news portal Sina
* Prefer crowded, cluttered sites: People from the West often look at a typical Chinese website and are taken aback by how crowded the site looks. US users tend to prefer cleaner, simpler websites with less clutter. Just compare Amazon to 360buy and Ebay to Taobao. The layouts and structure may be similar but you’ll find that the Chinese version will cram a lot more into a small space. One reason for this is that the Chinese language is a hassle to type on a computer, and Chinese users prefer to have all the links of things they want to find right there on the home page. They can just click on what they want instead of typing into a search bar. This was especially true in the early days of the internet. Over time, I believe users have just become accustomed to a certain look and feel and prefer not to change. Beauty is in the eye of the beholder!
This question originally appeared on Quora. More questions on Business in China:
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