Digital Life

China rides the Net into the 21st Century

By Published on .

SHANGHAI--Nowhere is China’s rapid economic development more visible than in the country’s adoption of “digital life” consumer goods. In a country where getting a landline involved a long wait and probably a hefty bribe not that long ago, today Chinese, especially the teens and young adults in urban areas so coveted by marketers, “can’t get enough” of the high-tech products pouring into the market, said Darryl Andrew, the Shanghai-based managing director, China for Synovate. The Aegis-owned research company’s research shows that among average urban households in Beijing, Guangzhou, Shanghai and Wuhan, four of the country’s most sophisticated cities:

-72% have a mobile phone, and 31% of those phones allow Internet access
-69% have a VCD player
-59% have a DVD player
-58% have a personal computer at home, of which 39% are connected to broadband access and 33% use a dial-up connection
-52% have a CD player
-35% have a digital camera
-31% have an mp3 player
-27% have a video game player
-24% have a video camera
-10% have a LCD/plasma flat screen TV

China’s thriving Mando-pop and Canto-pop music industry, coupled with the rise of music-enabled mobile phones and mp3 players, has grown sales of digital music in China to $500 million this year, according to Soundbuzz, a Singapore-based Asian online and mobile music retailer.

Wireless music in China generated $44.4 million in revenues February 2005, for example, more than the entire legal CD industry in 2004. The popular Chinese song, Mice Love Rice, was downloaded approximately 5 million times in a single month, generating more than $600,000.

But it is the Internet that has revolutionized life for most Chinese. Unlike Western countries, where the digital highway is mostly about e-mail, in China, it centers around access to information and entertainment.

“Teens and ‘tweens’ (8-12-year-olds) prefer interactive activities like chatting and online games to passive entertainment like watching television,” said Mr. Andrew. Not only is it more dynamic for this restless generation, many kids find they can fool their parents into believing they are working rather than goofing off and use online activities as a break from their studies. Forty-one percent of Chinese in Synovate’s study ranked the computer as the piece of technology that has changed their life the most.

Savvy advertisers are starting to tap the digital world as a marketing tool. Coca-Cola is one of the most visible new entrants to the world of online games, with a massive marketing effort tied to the popular World of Warcraft game that blanketed thousands of Internet cafes across China with branding and special promotions. That deal was created in alliance with Blizzard Entertainment, the software division of Vivendi Universal Games that produced the game and an online game operator in China, The9 Computer Technology Consulting in Shanghai.

Such efforts are surprisingly rare, considering how hooked many young Chinese have become on the Internet, accessed either at home or at one of the 100,000+ registered Internet cafes in major cities.

There are “ massive opportunities for marketers online, if brands are integrated into games and activities in a creative and effective way, because you’ve got their undivided attention and it can lead to great word-of-mouth,” said Mr. Andrew, “but a lot of them don’t realize it.”

“The Internet can be a powerful tool,” said Peter Soh, chief creative officer, China for Publicis Groupe’s Saatchi & Saatchi in Shanghai, “but I am hesitant to recommend it often to our clients. I think it represents escapism for young Chinese, who face so many pressures today with schoolwork and entering the workforce. You have to be very cautious and careful about using it as a marketing vehicle.”

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