500 million online users in China in 5 years ?
By JOHN SCHAUBLE, Herald Correspondent in Shanghai
Within five years, according to one of China's emerging Internet entrepreneurs, there could be as many as half a billion Chinese online - twice the entire population of the United States.
In China, companies are increasingly finding that if they're not on the Internet bus, they're likely to end up under it.
Mr King Lai, chief executive of Netease 163.com, believes the future of e-commerce in China has almost unlimited potential. He is one of a homegrown growing band of entrepreneurs recently dubbed the dot.communists.
"We believe that in five years there could be 500 million people online in China," he told a conference on emerging markets in Shanghai a few days ago. "China has already demonstrated an ability to leap, to go beyond people's expectations."
For the time being, hardware and access costs remain way beyond the means of the average Chinese worker. Mr Lai believes the costs of both will come down quickly. In the not too distant future, he thinks, a mobile phone with Internet capability will cost as little as $80 in China.
One of the big problems is China's Internet infrastructure. There are, in short, not enough phone lines. Downloads are infuriatingly slow and the limited number of state-sanctioned service providers can't keep up with demand.
Other problems include lack of regulatory clarity and the absence of banking and payment systems that will enable service providers to gather revenue.
But the chief financial officer of Sohu.com, Mr Tom Gurnee,says his company is growing at 100 per cent per quarter in a market with overall growth of 47 per cent.
There was "lots of buzz" in the "frenetic free for all" that is the Chinese Internet sector, he said.
The growth in Internet use remains spectacular. In 1995 China had an estimated 15,000 users. At the end of last year, the official Government count put it at 8.9 million. Estimates for April this year say there are currently between 13 and 15 million users, predominantly under age 35.
For the moment, China is second in Asia only to Japan in terms of the number of Internet subscribers. It is expected to overtake it within three to five years.
Beijing, according to Dow-Jones' vice-president in China, Mr James McGregor, "is both energised by this and frightened to death by it". Certainly the Government is struggling to keep up with the Internet's expansion.
A recent move to regulate precisely what type of news is allowed on Chinese Web sites was one signal. Another is the persistent bars placed on international news sites.
In the end it is unlikely that the Government will succeed in such attempts. Mr Wang Juntao, founder and head of 8848.net and one of China's most successful "netre-preneurs", puts the proposition quite simply: "The Internet is a network without borders." |
