Thanks Daesong; I think you make my point very well … however you choose to label them, casual internet users in internet cafes are a far different market from broadband users with always-on internet connections in the home.

China has always favored their corporations over others, and I don’t really blame them for it. It is widely known that after the Opium wars, the Chinese credit themselves with rejecting foreign goods and buying domestic in order to rebuild the economy. Today is no different. China will come out with services and companies to match any competitor. Some examples:

Baidu instead of Google
Tudou/Youku instead of Youtube
Taobao instead of Ebay
Hudong instead of Wikipedia
Fanfou instead of Twitter
and much more, not to mention shanzai merchandise

Newspapers and other foreign devil-operated media typically run blitzkreig coverage of China or about three days at a time, in sporadic spurts throughout the year.

Luckily, the latest is The Onion, whose coverage of the launch of The Internet’s 12th Web Site is very instructive to this debate, and also sheds helpful light on the oft-repeated plea for better data on China’s Internet:
http://www.theonion.com/content/news/internet_adds_12th_website

The purpose of this post was to pull the thread loose on more believable emergent data on the Chinese internet story. Still waiting! What we have gotten, however, are some pretty plausible reasons why the data is murky and might not be objectively measurable, which is a shame.

The thesis that remains is that China is not an Internet powerhouse. If Chinese users are surfing Chinese sites in the Chinese language from Internet Cafes using computers they do not own or control, then they might technically be using TCP/IP and a web browser, but I would argue they are not on the Internet.

If anything, CNNIC has UNDERESTIMATED Internet usage numbers for many years. The majority of Internet users in China browse the ‘net on shared computers, either in cafes or at home — just as most homes in the USA shared a single PC among 3-4 family members before the mid-90’s “beige box boom,” Chinese households rarely have more than a single PC.

As Kaiser also points out, statistics from almost any entertainment-based web site in China will more-or-less back up CNNICs estimates. Unlike the West, China’s Internet users care little about the ‘functional’ aspects of the Internet (online banking, searching for information, buying stuff), but embrace the the ‘net as a social and entertainment outlet with astonishing gusto.

Baidu and Google are therefore not valid proxies for Internet usage (either in population or revenue). In short, China’s Internet users have a conception of the web that is diametrically opposed to that of the casual, occasional observer in the West. You need to look at QQ vs.’Western IM”, or MMO server stats, or even mp3 downloads to get anywhere close to a comparison. And again, the results would be apples/oranges. Don’t forget, China’s Internet is more like an “intranet,” isolated by barriers of technology, utility, language and most importantly interest. Google has done poorly in China because it didn’t answer a pressing need in the market, whereas BIDU did.

For another example, due to the difficulty of entering Chinese text using Pinyin (which is phonetically based on Mandarin pronunciation) among speakers of different dialects — especially Cantonese — “quick link” sites like hao123 have cropped up to give confused Interner nubies an easier way to “search” for information. As a result, hao123 sends a surprisingly large percentage of overall traffic to Baidu.

And don’t even get me started on using Firefox downloads to arrive at an Internet population in China. Crazy. After years of pirated MSFT products, China is solidly IE territory, and most websites are non-standard and will not even work using FF. The fact that FF exists at all in China is a testament to China’s scrappy population of geeks who are willing to run multiple browsers constantly.

While I agree that CNNIC numbers are suspect, and (having spent much of the last decade covering the Internet in China) would be the last person to come to the aid of the government-backed propaganda machine, your approach to the task of ‘debuking’ CNNICs assertions is totally backward.

For a better analysis, I would point your readers to… almost anyone else’s publications on these matters over the past few years.

(1) Internet cafe users are many: there are an estimated 100,000+ Internet cafes (maybe 150K, I saw different figures) in China. Some cafes have just a dozen machines, some have hundreds. Each machine services many users.

(2) Chinese users definitely visit mostly Chinese websites and Alexa has not AFAIK strong adoption in China. As a more general view, “measurement” is not a liberalized industry in China. It is an opinion that measuring what is said or not can help reverse engineer PR policies.

(3) Right, if China-based users use proxy servers to access foreign sites, they won’t appear in the stats as Chinese. However, most Chinese users browse the Chinese web in Chinese, just like Japanese and Koreans (and probably most non-English speaking countries) browse mostly in their native language. Proxy servers are popular with China-based foreigners – I wonder if this population, though small, would not be larger than the Chinese proxy users…

As long as local companies solely build to IE, it’ll be useless for the Chinese to download Firefox. They won’t be able to get anything done.

Alexa does measure Chinese traffic, but it has no reach onto Internet cafes (nor do Compete, which has basically no Chinese presence, or comScore). Roughly a third of Chinese Internet users access the Web primarily through Internet cafes, which are ubiquitous even in small towns and incredibly inexpensive to use: usually, hourly rates run from about US$0.28 to US$0.44.

On the subject of access cost, your per capita GDP figure doesn’t take into account the fact that broadband is very inexpensive in China: All-you-can-eat 1 meg runs $20 or less per month even in metropolitan areas, and it’s cheaper still in lower-tier cities and rural areas. 2 meg ADSL is about $26 in Beijing. Add to this the fact that if you look at median income in the areas where Chinese Internet penetration is highest — you have a sort of 80/20 effect here, where say 80% of users are in 20% of cities — you’d find they’re significantly higher. Remember, China’s Gini Coefficient is among the highest in the world: There’s huge income inequality favoring the coastal provinces and first-tier cities. It’s almost unheard of for anyone under 40 in a major city not to be an Internet user (if not a complete addict!)

Firefox is, sadly, a distant third in browser popularity in China behind IE (which has a lamentable iron grip here and market share of 83% or more), and a homegrown browser called Maxthon (market share in the range of 12-15%, I understand). Firefox does appear to be gaining popularity here, but the proportion is very low, and limited chiefly to tech savvy types. Also note that many PCs in China are DIY jobs bought from local assemblers who pre-install a standard software pack that, in recent years, often includes FF — another reason that download stats aren’t an accurate reflection.

For more solid numbers, look at user numbers of China’s most popular instant messaging service, Tencent’s QQ. This Hong Kong-listed company’s Q1 earnings report counts 934.1 million (yes, you read that right) total accounts, with 410.8 million active users. Many QQ users have multiple accounts, but still, penetration of QQ use among Chinese Internet users is about 70% and supports, or at least does not contradict, the CNNIC claim of 338 million total Internet users. Peak simultaneous users of QQ reached 57.5 million in the first quarter of this year.

From where I sit, the most solid evidence I see that the CNNIC number isn’t terribly far off is this: The company I consult for, China’s largest Internet video site Youku.com, reports about 150 million monthly unique visits, and as much as I’d like to believe that this represents an even higher percentage of China’s total Internet users, I think that what, 40% or so of the total reported is still pretty high. 🙂

RK’s suggestion that proxies and VPN account for “lost” numbers is probably not accurate. A very small percentage of Internet users make use of proxies or VPNs, chiefly because a very small percentage of Chinese Internet users visit sites hosted outside of the US which are apt to be blocked.

Indeed, for years and years, it was widely believed by the most seasoned and well-respected Internet and telecoms consultants in China (Duncan Clark of BDA, for instance) that CNNIC routinely undercounted the number of Internet users.

I’d be happy to help point you at more data if you’d like.

Best,
Kaiser

(1) regarding the # of internet users in China, it is possible that many of those use internet cafes. If this is true, then this would explain the relative small download numbers accrued to China users.

(2) I do not know if Alexa measures Chinese websites. Is it possible that Chinese users tend to visit mostly Chinese websites and these sites are not measured by Alexa?

(3) It is also possible that many Chinese users get around the Chinese firewalls using proxy servers. These servers would obscure Chinese users usage of foreign websites. Other than anecdotal stories, I have no statistics to back this up. The popular proxy services would have some data concerning access by Chinese users.
RK