John Yunker is founder of Byte Level Research and author of the widely acclaimed book, Beyond Borders: Web Globalization Strategies and editor of Global By Design.
He has covered the emerging field of Web globalization for half a decade and has published a wide range of reports dedicated to best practices in Web localization and internationalization.
About this blog
Going Global focuses on the risks and rewards of expanding into new geographic and cultural markets, from Web globalization to international marketing to global usability.
Conclusion: These people don't like each other all that much.
Between contested territories, painful histories, and the simple fact that neighbors often make the best enemies, I guess none of this should come as a surprise.
Here are the numbers for China and Japan:
These numbers may be a little intimidating to Japanese companies hoping to win over Chinese consumers, who are among the most coveted consumers on this planet these days. But they must also pose a challenge to Chinese companies with aspirations of becoming global brands, such a Lenovo and Haier and Chery.
Or, perhaps none of this matters as much anymore when it comes to building a global brand -- brands are increasingly created, managed, and (to a growing extent) viewed as distinct from their countries of origin.
Google vs. Baidu is the heavyweight battle of the Chinese Internet market. And a lot of media coverage is being devoted to analyzing this fight. Based on what's out there now, Baidu has won round one. The question now is whether Google on the ropes or simply pacing itself...
The New York Times posted a good article Sunday on Baidu's emergence as China's leading search engine -- despite the expensive efforts of Google and Yahoo!.
Here are some key excerpts...
In addition, analysts say, entrepreneurs in China have a knack for pummeling American Internet giants. “The globally dominant U.S. Internet companies have failed to take the No. 1 market share position in any category,” says Jason D. Brueschke, a Citigroup analyst, of the Chinese market. “And they came with more money and major brand names. And so there’s something fundamentally different about this market.”
So fundamentally different, Mr. Brueschke believes, that Baidu will retain its hammerlock on the Chinese search industry. “The real battle in the competitive landscape is not about who’s No. 1, it’s about who’s going to be No. 2,” he says.
I was surprised to find in the article that Baidu began using pay-per-click adwords before Google -- something I had assumed Google pioneered. However, Baidu clearly did coopt Google's famously spare design:
So why is Baidu dominating the search market in China? According to the article...
Analysts say Baidu is playing to a different audience than Western Internet companies because the Chinese are far more interested in entertainment than news, books or car rental rates. “The fact is 70 percent of China’s Internet users are under the age of 30,” says Richard Ji, an analyst with Morgan Stanley. “Most of them are single, only children. They’re looking for entertainment.”
That may explain why China’s dominant Internet companies are all entertainment focused, like Tencent (which hosts online communities and instant messaging) and Netease and Shanda (which are online gaming sites).
The article concludes on a positive note for Google and a "challenges still remain for Baidu." Google has been more successful at generating revenues than Baidu.
But The Red Herring paints a much darker picture of Google's prospects in China, saying:
The Mountain View, California-based Google has lost significant share in the three largest Chinese markets of Beijing, Shanghai, and Guangzhou, while Beijing-based Baidu has gained substantial ground and a commanding market share lead.
In Beijing, the only city for which detailed results were made available, Baidu’s market share rose by 13 percent from one year ago to 65.4 percent, the survey showed. Google fell by 12.3 percent, from 32.9 percent to 20.6 percent.
And the article proposes its reason for Google's declining market share...
Questions on overall satisfaction with major search providers revealed that users in China are “unhappy about the speed of Google,” said Mr. Lü, and with penalty time-outs that Chinese ISPs impose on users when they search for sensitive search terms.
These issues prompted Google to launch a China-hosted version of its site at Google.cn, drawing fire from free speech advocates and members of the U.S. Congress. But according to Mr. Lü, “only about 3 percent of Google users in China are using the Google.cn website. Most are using Google.com,” he said, referring to the U.S.-hosted, uncensored version.
China imposes tight restrictions on bandwidth for traffic entering the country, which means that any Web site hosted outside of China is going to load more slowly than sites hosted within China. It's another way to control content and force companies to invest in the market. But I find it interesting that the Chinese version of Google.com is holding its own against Google.cn.
My theory on Baidu's success?
I think that both articles are correct, but I also think nationalism is playing into Baidu's success. The Chinese may covet German cars and French fashions but they are also loyal to home-grown success stories -- and Baidu is the poster child.
That said, Google took over the world in about six years -- there is still plenty of time left for it to take over China. But give credit to Baidu for soundly winning round one.
According to The Beijing News, via Rich Kuslan's blog, Dell lost a suit against a research institute over the fact that its name sounds too much like Dell's transliterated name.
Transliterated?
If this term is new to you, it is "phonetic translation" -- such as creating a name in Chinese that, when spoken, sounds just like your brand name when spoken in English. It is especially important that the resulting text convey a positive meaning -- or at least not a negative meaning.
Any multinational that has long-term consumer market aspirations in China needs to transliterate its name so it can better promote itself -- and better protect itself. And you can register this transliterated name as a Chinese-language URL.
But transliteration can be a very tricky business. Pacific Epoch writes briefly about this Dell suit; the two names in question certainly appear similar in English -- De Er vs. Dai Er -- but not too similar, according to the powers that be.
Sometimes a company will mis-translate as it rushes to enter a market. KFC and Pepsi have provided two humorous examples. According to this article on the art of transliteration: KFC’s “finger-lickin’ good” slogan entered the China market as “eat your fingers off”. Pepsi’s “Come alive with the Pepsi Generation” spent a short time in Taiwan as “Pepsi will bring your ancestors back from the dead” before the F&B giant went into damage control."
Such is the crazy, complex world of transliteration and IP protection in the Wild Wild East.
UPS recently hired a Chinese market research firm to survey 1,200 “Chuppies” – Chinese, urban, middle-class consumers. What they found is good news for American companies looking to expand into this market.
Particularly good news is that this group of Chinese are embracing online shopping and credit cards. According to the study, more than half (52%) use credit or debit cards for shopping, and 40% have shopped online.
This is a long report -- you can download a copy for free here. Here's the press release excerpt that jumped out at me...
“Online shopping in China is still very new and there are many kinks still to be worked out, including simplifying payment and delivery,” said Erin Ennis, Vice President, U.S.-China Business Council. “American companies need to consider offering Web sites in the local language to increase their online sales.”
I would say that companies need to do more than consider translating their Web sites to sell goods in China. Translation is the price of admission these days.
The survey even touched on color preferences for packaging. If you're a male Chinese consumer, the study says, odds are that you prefer a blue package.
If you're female, you prefer a red package, which is not a big surprise -- red is a color of celebration; wedding dresses are in red.
But what I found surprising was how highly white ranked overall. White is typically associated with death in Asia and I had talked to a client a few years ago who found that white packaging was turn-off to its focus groups. But perhaps this is changing. I suspect that Chinese consumers are becoming internationalized by the Internet.
eBay, despite doing business in more than 20 countries, still earns the bulk of its revenues from US sellers, folks who have been increasingly unhappy about steadily increasing listing fees. When eBay North America president Bill Cobb confirmed recently that eBay wasn't charging transaction fees to sellers in China, sellers in the US were none too pleased.
Om Malik has a good take on the situation, one that underscores the transparency of Web globalization and the importance of treating all markets equally.
Of course, no company treats all markets exactly the same. Bigger markets get more attention. And eBay needs to grow quickly in China. While eBay's marketplace revenues in the US dipped this last quarter, international revenues more than made up for the slack. eBay is playing catch-up in China and believes that it needs to lower the barriers to sellers in a market that is extremely price resistant.
So does this mean eBay must start charging sellers in China exactly what it charges sellers in the US?
Not necessarily. Every market is different and will require a different strategy. And emerging markets will generally get subsidized by developed markets.
While any fee increase is going to anger sellers, I wonder if eBay could have mitigated the damage somewhat by helping US sellers understand what it was trying to accomplish in China -- and what it is up against in this market.
I think the larger issue here is lack of cultural communication. On absolute terms, US sellers and Chinese sellers are not being treated equally. But most sellers in China can't expect to see the revenues that sellers in the US are currently seeing. And there is a cultural resistance in China to conducting transactions online. Americans don't seem to have much of an issue with online transactions; but not so in China. And competition in this market is ruthless. How can eBay succeed if competitors aren't charging transaction fees?
The issue isn't about eBay stealing from one market to subsidize another market, but about localizing strategy (and pricing) for each market.
What if eBay doesn't succeed in China? Will sellers in the US ultimately suffer from fewer potential buyers? Or, will sellers in the US benefit from fewer competitors?
The major lesson I take from this is that if you can't treat every country equally, at least do a darn good job of educating every country as to your reasons why.
According to Reuters, China is doing its part to help the world learn to speak its language.
It just launched the Chinese-instruction Web site: Linese.com.
It's somewhat ironic that the site comes across as poorly translated; bridging the English-Chinese gap, in either direction, is no easy task.
I've talked to a number of people lately who tell that they or their children (or both) are now learning Chinese. Reuters puts the estimate at 30 million students globally.
When I was in college, learning Japanese was all the rage. Now it is Chinese. Something tells me that this particular language, as far as the US is concerned, is much more than a passing fad.
UPS continues to invest heavily in China, announcing today that it was beginning flights from Germany to Shanghai and increasing the number of flights from the US to China. UPS serves more than 300 cities in China and last year launched domestic service in the country. It will open retail locations in Shanghai later this year.
And, in other news, Accor continues to launch hotels in China at a blistering pace. According to the article, it will have five hotels opening wthin 30 days of each other. It has a total of 30 hotels in development, all in anticipation of the coming Olympics.
The Chinese blog Better Localization has an interesting story about a recent Chinese TV program that took a few multinationals to task (KLM and IKEA) for not providing Chinese-language documentation.
Here's an excerpt (with edits for clarity):
...a company can be sued if it sells a consumer product without proper Chinese documentation. In fact KLM Royal Dutch Airlines is not the only business that was sued for this reason. In 2005, a user sued Shanghai Online, a subsidiary of China Telecom, because (among some other reasons) his service was terminated unexpectedly when he ignored the notice emails from Shanghai Online, which were in English.
If these lawsuits are not enough, CCTV2’s program on March 8th is a clear signal that Chinese consumers have changed significantly compared to the 1980s or 1990s: More and more people know the right to read in Chinese is part of the right to know, and it is backed by law. They will be more likely to take strong actions including lawsuits to protect their rights.
According to my local paper, Chinese language instruction is hot:
"I tell you, this Chinese fever is on again," Wong-Avery said. "Everyone knows it will be one of the most used languages in the world."
Even China is having trouble keeping up with demand. China says it needs 11,000 more language teachers for foreigners who visit seeking instruction. According to this article, "Last year, a record 110,844 students from 178 countries came to study at universities all over the country, a 43 percent increase from 2003."
According to Shanghai Daily eBay is dropping its fee for online stores, matching competitor Taobao.com's free offering. Says the article:
Now why would eBay China do this?
According to the article, eBay China is hosting just 10,000 cyber stores as of the end of Q3 compared to 1 million hosted by Taobao.com. eBay was missing the mark when it thought that small business owners would shell out US$62/month to host a store when other small business owners weren't paying a dime.
Could Taobao be doing to eBay in China what Yahoo! did to eBay in Japan? To eBay's credit, it has registered a few million more individual users than Taobao, so it's way too early to make any clear predictions. Although this sudden change in business model is not a sign of strength, it is a sign that eBay isn't going to go without a fight.
According to Business Week, China might soon revise GDP upwards by a whopping 20%. Says the article:
That would make China the world's fourth-largest economy, suddenly overtaking Italy, France, and Britain. And it would peg the mainland's output at 18% that of the U.S. and 30% as large as Japan's, "bringing us several years closer to the day (still a couple of decades out) when China's GDP overtakes that of Japan and the U.S.," says Stephen Green, an economist at Standard Chartered in Shanghai.
What makes this increase particularly meaningful is that the service sector is playing a larger role than previously assumed in driving the economy. This means that China isn't just growing because the rest of the world is throwing money its way. Chinese consumes are actually consuming.
That's promising news for companies who want to begin selling to the Chinese instead of simply buying from them.
As a sidenote, according to my calculations, there will be more native Chinese speakers online by 2010 than native English speakers. a
This is a great Wall Street Journal article on China's culture and how it relates to technology -- primarily voice mail.
An excerpt:
Many Chinese who have worked for inefficient, state-owned companies may not comprehend the idea of being obligated to return phone calls or to respond to customers. Plus, Chinese workers are away from their desks most of the day, conducting meetings in the traditional, face-to-face Asian style, Mr. Wang says. They don't expect anyone to be around to answer their office phone and check messages. That is one reason cellphone-based text messaging, which is cheaper than installing a complex office voice-mail system, is popular.
Nor do many Chinese expect to leave messages. Duncan Clark, a telecommunications consultant in Beijing, has voice mail in his office but says many people seem mystified when they call and hear his recorded message. Callers often say, "Wei? Wei?" -- the traditional Chinese phone greeting roughly meaning, "Hello? Hello?" -- over and over, believing they are speaking to a real person. Others consider it a loss of "face," or dignity, to leave a message with someone of lower corporate rank. "It's basically a cultural gap," says Mr. Clark, a Westerner who speaks fluent Mandarin.
Speaking of cell phones, according to News.com there are 3.6 cell phones for every PC in China, compared with a ratio is 0.9 cell phones for every PC in the US.
While President Bush is about to enter China, another W is also set to enter the Chinese market -- the hotel W.
According to this article, the W Shanghai - Pudong will debut in 2008. And the W will have plenty of company -- every major multinational hotel chain has set its sights on Asia in general and China in particular.
Says the article...
InterContinental Hotels Group PLC (IHG) recently indicated that it expects China to account for up to a third of the company's global expansion over the next three years, which involves adding up to 60,000 net new rooms. The company reportedly is aiming to manage 125 hotels in China by the end of 2008, a near threefold rise from the current levels.
Baidu comes out on top in market share. But Google is more popular among high-end users. And Baidu relies heavily on MP3 search to drive traffic, primarily among the younger generation.
But I found this one question to be particularly worrisome for the folks at Google:
For users who never used search 6 months ago, now use as their only or primary search engine:
- Baidu 48.2%
- Sohu 19.6%
- Google 12.5%
- Sina 7.1%
Google does have a 2.6% share of Baidu, but it's going to have to put a good portion of its newly raised $4bn to work to get the rest.
You can download the full survey report at this link.
What this non-intuitive exhibit shows is that US VCs will be boosting non-US investments signficantly, most heavily within China and India, while non-US VCs will be increasing their investments in the US. So it seems the US is going to see no shortage in VC money anytime soon. But one of the keys to tapping into this money will be having a global business strategy in place. And a global Web site certainly couldn't hurt either. Web globalization is often viewed as something only large multinationals invest in; but I believe that start-ups stand to benefit the most from Web globalization.
The media fallout of the billion-dollar Yahoo! Alibaba deal is still rolling in. There's a good piece in the WSJ about how eBay is trying to avoid a repeat of Japan (the first market where Yahoo! out-eBayed eBay).
And there is a Q&A in Business Week with Yahoo! CEO Jerry Wang. Wang says, "this Alibaba arrangement is a unique model of partnership for us. We believe that to be successful in China, we absolutely have to have strong local management, and [Alibaba CEO] Jack Ma and his team are the best-of-breed Internet management team inside China."
A lot of people are wondering how a company like Yahoo! can spend a billion dollars on a company not making very much money and still not get a majority stake in the company. And then it hands over management of its own in-country operation to that very same company.
But let me refer you to the Lenovo purchase of IBM's computer unit. Lenovo pays a steep price for this money-losing brand and instead of dismissing all those execs in New York, it lets them run the show. Why? Just as Yahoo! knows that it needs the people with the most local expertise running China operations, Lenovo knows that it needs the people with the most global expertise running its global operations. Lenovo wanted a global brand and Yahoo! wanted a local brand. And both brands didn't come cheap.
They're young, they're affluent, and they want American goods.
Meet the Chuppiers: young, urban, Chinese consumers.
UPR commissioned a survey of selected Chuppies (1,140 Chinese consumers between the ages of 20 and 59 in six cities) and found opportunities for American companies abroad. Here are some highlights...
53 percent of all respondents would like to see a broader selection of U.S. products, such as shampoo, shower gel and dental care products.
53 percent of those polled want a broader selection of American electronics. The most likely purchases this year are digital cameras, laptop computers and video/digital recording devices.
52 percent said they want more American fashion, especially athletic shoes, sandals, t-shirts with American logos, sportswear and blue jeans.
And it goes without saying that a localized Web site is critical for reaching these Chuppies. Consider Dove (a Unilver product) and Olay (a P&G product)...
Back when I was in college, eons ago, students began taking Japanese language courses in droves. Japan was perceived as an economic threat at the time and we Americans needed to churn out a workforce that could speak the language.
Flash forward to today: The new perceived threat is China, and it is no surprise to read this article about the growing popularity of Chinese as a second language.
According to the article, "a 2004 College Board survey found that 2,400 high schools -- an incredibly high number -- would be interested in offering the Advanced Placement (AP) courses in Chinese language and culture when the courses become available in 2006."
While taking a few Chinese AP courses isn't going to turn anyone into a fluent Chinese speaker, it certainly can't hurt. I also think it's important for students to dive into a non-Romance language at least once in their lives. Learning to read not just a different language but a different script is enormously challenging. And it makes the culture behind the language appear a tad bit less "foreign" and perhaps a bit less of a threat.
I was surprised to read this statistic from the article...
"Millions of Chinese are learning English, but only 24,000 Americans are learning Chinese," said Andrew Corcoran of the San Francisco-based Chinese American International School, the oldest Mandarin "immersion" program in the country.
As English becomes the world's second language, native-English speakers have become spoiled. We can travel the world and get by fairly well using English. But, in the end, we are just tourists.
Last month, Christopher Liechty, president the AIGA Center for Cross-Cultural Design, moderated a panel on branding in China. The transcript from the session has been published and is available for free download. It's a long transcript but worth a read.
The panelists included:
Bernd Schmitt, director, Center on Global Brand Leadership at Columbia Business School
Don Sexton, professor, Columbia Business School
LiAnne Yu, strategic director, China Insight Group, Cheskin
Tom Lowry, media editor, BusinessWeek
Here are a few excerpts that I found interesting:
LiAnne Yu: The hugest opportunities in China are not in the first tier cities right now, they are very much in the second and third tier cities, Chengdu, smaller cities, just growing very rapidly and very different kinds of customer experiences there that may lead to very different types of branding experiences.... There are 166 cities in China with over 1 million people, that’s compared to 9 in the US.
Bernd Schmitt: I think there is a difference in terms of how you look at
individualism and collectivism in different Asian countries. And the difference I see in China, it's much more a small group, family, you mentioned small groups of collective sense, collectivist sense, much more than in Japan.
LiAnne Yu: I think McDonald’s is the most incredible example of a brand. People know that, yeah it started off as an American brand, but when you go into a McDonald’s in China, it's a Chinese experience as well. The way the McDonald’s is laid out, the fact that there are more tables for people to sit at for a long period of time. It’s a place where people take their dates. It's not a fast food experience in the U.S. sense.
PayPal has confirmed in the WSJ that it will launch PayPal China by the end of this year.
PayPal currently offers a dozen localized Web sites. its growth strategy is simple -- follow in eBay's global footsteps. Last year, eBay migrated its China acquisition, EachNet, over to the eBay platform. Plugging PayPal into the site is the last major hurdle.
Actually, the last major hurdle is to get a hundred million people comfortable shopping online. So it's no surprise to see eBay kicking in $100 million this year to staff local phone support teams and run TV campaigns. Normally, eBay doesn't pull out the TV ads until after it's reasonably successful in the market; but not in China.
What will be interesting to watch is if PayPayl China debuts with support for wireless (cell phone) payments. We're seeing wireless commerce take hold in Korea. Given the lack of home PCs, limited Internet penetration, and signficant cellular penetration, mobile payments could be a key ingredient to success in this market.
A heated battle is brewing between computer makers Lenovo and Dell in China. And The Wall Street Journal has a very good article on the many issues involved.
While Lenovo is looking to expand outside of China (hence the IBM acquisition), so is Dell, attacking Lenovo in its home market. And the fact that the Chinese are getting more and more comfortable ordering online is playing nicely into Dell's business model. According to the article...
Just two years ago, Dell Inc. rejected a plan to sell computers online in China. The personal-computer giant worried that most Chinese consumers didn't use credit cards and were too poor to become big Web shoppers. But last year, Dell executives in China showed their bosses a startling statistic: More than 90 million people in the country's coastal cities have access to the Internet at home or work. "We're missing a great opportunity," William J. Amelio, Dell's top executive in Asia, recalls thinking.
This trend has to be good news for eBay as well, which is also betting big on China. But I wouldn't write off Lenovo just yet. China is Lenovo's home market and Dell is still learning how to market to the locals...
After entering China in 1998, Dell encountered trouble with the term "direct sales." It translates into a Chinese phrase -- zhi xiao -- that's most often used to describe illegal pyramid marketing schemes. To counter the confusion, the company blitzed customers with colorful brochures that depicted its sales and manufacturing processes. And its sales representatives adopted a new Chinese phrase -- zhi xian ding gou -- that means "direct orders."
The Dell China Web site could also benefit from the use of local models. As you can see here, the China and US Web sites make use of the same stock photo.
Still, Lenovo had better not take its eyes off its home market. Dell is in China to stay and it will only get more and more local over time...
According to the article, "Exact details of the search company's planned service are not known. But the knowledgeable people say it could have similarities with PayPal, which allows consumers to pay for purchases on Web sites by funding electronic-payment accounts from their credit cards or checking accounts. Some consumers like PayPal for the security it offers, since it allows them to share their banking or credit-card numbers only with PayPal without having to divulge the information to merchants."
PayPal is a great service. My company uses it and it has allowed us to accept payments from all over the world. My only concern has been the flood of PayPal phishing spam and what effect it is having on user trust and behavior.
But now we have Google getting into the game, with a service possibly called Google Wallet. At the very least I believe that Google Wallet will pressure eBay to rethink its global expansion strategy for PayPal. Currently, PayPal follows in the footsteps of eBay. When eBay launches a country Web site, it's just a matter of time before PayPal supports that market.
However, PayPal might be wise in expanding into markets ahead of eBay because Google has a track record of "going global" at a blistering pace. eBay knows well, after ceding Japan to Yahoo! a few years back, how being a late entrant into a market can hurt. And yet Google is going to face its share of roadblocks along the way. The reason PayPal has gone global relatively slowly is not so much technical but legal. PayPal needs to forge partnerships with local banks and get regulatory approval in these markets before it can enter, and you can imagine the time and lobbying involved; I've heard that this process alone can take up to 18 months per market. There is still no PayPal China.
I would imagine that Google is going to have to do jump through the very same hoops that PayPal has jumped through, unless it is taking a different approach altogether.
Regardless, I'm glad to see Google getting into ecommerce in a global way. It will push PayPal to be even better, most likely keep processing fees low, and keep the folks at Visa, MasterCard, et al at bay.
The news that Microsoft's new China MSN blogging portal is censoring "prohibited language" such as "democracy, freedom and human rights" is unsettling to say the least.
"MSN abides by the laws, regulations and norms of each country in which it operates," said Brooke Richardson, MSN lead product manager.
Every country has its rules that companies must play by, but what if these rules are just plain wrong? I understand that Microsoft is desperate to do business in China and I understand that if Microsoft doesn't play by China's crazy rules that some other multinational most certainly will (see Yahoo!, eBay and countless others). Privately, many executives tell me that they are playing nice with China in the hopes that these rules one day are relaxed. But by playing by the rules aren't you giving China less incentive to relax them?
The mark of a great company is one that is not afraid to turn away business if it violates their sense of ethics. When American-based companies assist a government in banning the use of words like "freedom" and "democracy" these companies have become part of the problem and not part of the solution. This isn't localization; this is capitulation.
The techie news blog engagdget is launching a China site, with more countries/languages to follow. According to engadget, the site "will feature translations of Engadget posts, as well as original stuff specifically for the Chinese market, and will be the first of several foreign language editions of Engadget that we’ll be launching in the coming months." The site is cearly in 'beta' still.
On the plus side, the site smartly positions the language selector in the "sweet spot" of the upper right corner of the Web page. But on the negative side is the awkward URL: http://chinese.engadget.com/. The problem with using the "Chinese" label is that there is more than one Chinese language in use around the world. Now, if the site were labeled as engadget China, users would know to expect Traditional Chinese. And the site's URL could simply be www.engadget.cn. But it could be that engadget wants to avoid targeting specific countries and stick only with languages (and I'll explain why in a sec).
Also, many of the "template" text items like "read" and "filed under" could use translation as well. But, clearly, it is early yet.
Now, why is engadget rushing to add all these languages Web sites?
Adwords
As Google keeps expanding its Adwords program into more and more languages, it provides a nice roadmap for growth for virtual companies such as engadget. This is why engadget is taking the "language" approach rather than the "country" approach. Makes good sense. Currently the site isn't using Chinese-language adwords, but I'm sure that will change.
China has an official 1.3 billion people—that's 1/5th of all people on the planet. Unofficially, it has 1.5 billion people—the 200 million that aren’t counted is larger than the United Kingdom, France, and Germany combined!
China has 100 cities with 1 million or more people—and to put this in perspective, the United States has nine. Shanghai, the financial hub that buzzes with the optimism of Silicon Valley, has 17 million people. Beijing has 14 million.
(FYI: Tom Friedman, in The World is Flat says there are 160 cities with 1 million or more people.)
China is the #1 market for mobile phones (350 million users), #1 steel maker, #1 coal producer, #1 in foreign direct investment ($500 billion), #1 auto market by 2010, and #2 market for PCs.
320 million people under the age of 14—more than the entire United States population. There are 300 million Chinese moving from rural communities to cities.
Of course, I have no way to verify any of these stats. And, given that China is hardly a transparent country, there are few people around who can verify these stats. But that's not really the issue. China is big, real big.
It looks like Disney learned some painful but important lessons about the importance of localization from the Euro Disney disaster.
Writes Laura Holson...
When Disney opened Disneyland Paris in a former sugar beet field outside Paris in 1992, the company was roundly criticized for being culturally insensitive to its European guests. Now Disney burns incense ritually as each building is finished in Hong Kong, and has picked a lucky day (Sept. 12) for the opening.
This may seem silly to Westerners, but imagine Disney opening a new park in the US on Friday the 13th. Other details include a liberal use of the number 8 and an avoidance of the number 4. You won't find a fourth floor here.
I'm glad to see a more humble Disney localizing itself to the world. And I love this quote: "It used to be Disney was exported on its own terms," said Robert Thompson, a professor of popular culture at Syracuse University. "But in the late 20th and early 21st century, America's cultural imperialism was tested. Now, instead of being the ugly Americans, which some foreigners used to find charming, we have to take off our shoes or belch after a meal."
Now, about that Web site...
I couldn't help but notice that the Disney Hong Kong and Disneyland Hong Kong Web sites place their language navigation in the "sweet spot" of the upper right corner. This is the perfect location; here is a screen grab from the Disney Hong Kong page:
Perhaps the folks who manage Disney.com will follow Disney Hong Kong's lead. Today, if you visit Disney.com you'll have to look really hard to find the "global gateway." It's buried in a pull-down menu at the bottom of the Web page:
Now why is this a big deal? Because Web and marketing professionals are finding that up to half (and sometimes more) of their Web traffic to the .com page originates from outside the US. It's critical that these visitors find their languages and countries as quickly as possible. Disney Hong Kong gets it and I believe that Disney.com will get it too, eventually.
According to Deloitte's 2005 report on the retail industry, the "need to go global" is one of the top 10 issues facing retailers. Here are two interesting excerpts...
Globalization gained further ground in 2003. Currently, these 250 retailers sell in 135 different countries. The average retailer sells in 5.5 countries. This average does not include the six retailers who are truly “global” in scope, operating in nearly all major countries around the world. In comparison, the 1997 results showed that retailers back then operated in only 4.5 countries, on average.
International sales have become important to many retailers’ growth strategies. Published reports noted that Tesco showed a 30 percent growth rate outside of Britain compared to 7 percent at home. Almost 49 percent of its square footage is overseas. Wal-Mart’s international division saw a 17 percent increase in sales for 2003; the division now represents 18 percent of Wal-Mart’s total sales.
Despite Wal-Mart's growing international revenues, the report does question why American retailers have been relatively slow to expand globally. I would agree. The US market is so vast that many companies have only recently awakened to the world outside their borders. Best Buy will soon be dipping its toes in China.
And I would argue that Wal-Mart, for one, should be in 30 markets right now instead of its current nine. There is a real urgency these days to get into these emerging markets early. In retail, there is a first-mover advantage, because you can get the best real estate at the best prices, developing partnerships with the best suppliers and distributors, and, more important, develop relationships with customers. In the long run, Wal-Mart's slow expansion could hurt, because European retailers, like Germany's Metro, aren't sitting still.
The report notes, "European retailers, on the other hand, have been far more adventurous, first gaining multicultural experience across national boundaries within Europe, and then applying the lessons learned by investing globally. Today, a visit to modern shopping areas in emerging markets in Asia, Latin America or Eastern Europe will involve seeing many European retailers, but few Americans."
I've been writing so many blogs about China over the past few months that today I went ahead and created a new "China" category. It's impossible to keep up on all the China-related business globalization news, but here are a few items that recently caught my eye...
UPS survey finds China a high priority
UPS put out a press release today citing an executive research study that found that "a remarkable 80% of the executives surveyed say that China will be playing an important role in their company's growth objectives within the next three years."
Nike and Toyota stumble in China
This Reveries article highlights companies that have stumbled when entering China...
Nike's not alone on this particular learning curve, though. The Chinese don't care much for Colonel Sanders, either. And Toyota blew it with one ad in which their Land Cruiser was "towing what appeared to be a Chinese military truck, and other featuring stone lions, a traditional symbol of power in China, bowing down to Toyota's Prado GX. Not surprisingly, some of China's 1.3 billion citizens "balked at the perceived insult to their armed forces and at the notion of bowing down to anything -- even a car -- representing Japan."
Best Buy entering China
According to the Journal, Best Buy will be testing its first superstores in China...
Best Buy plans to open stores in China, as a way to test and evaluate the Chinese market for consumer electronics and appliances. A spokeswoman wouldn't say how much the company has earmarked for expansion in China or how many stores the company plans to open.
Lenovo: A view from the top
Here is a great Q&A with a Lonovo board member, Lee Sen Ting. Lenovo is acquring IBM and Ting had this to say about the deal:
"Our strategic acquisition of the IBM brand name and human resources are solid steps that accelerated the internationalization of our company."
Chinese firms could enhance their brand positions considerably with the right strategic partners, and the hiring of Western talent would offer significant insights into international corporate culture and governance.
John Yunker is founder of 
