Web 2.0 – Mary Meeker, The Internet in China

Web 2.0 – High Order Bit – The Internet in China
Mary Meeker, Managing Director, Morgan Stanley Dean Witter
10/6/04 China is the most populous country in the world and the top priority for China’s leaders is long term, sustainable economic growth with relatively high levels of employment. Technology is the designated vehicle for driving growth and the Internet is at the core of technological innovation. However, there are many disruptive forces, challenges and risks to face. You can get a copy of the 5 year or 10 year plans the Chinese government puts out.

In technological adoption, China is second in the world with 87 million users, and they are likely to be number one within 5 years. South Korea has a broadband penetration of 70%. Shanda networking has 236 million registered gamer accounts (non unique in China). Ringtones has a $3+ billion annual market. 1 out of every 6 phones is a picture phone. Apple has 70% of online paid music market.

11 Points to the Internet in China:

1 – The number of connected users is significant and growing rapidly. Mobile phones, cable and telephone connectivity will be significant.

2 – The relative web site usage momentum is strong (Alexa).

3 – The next generation is very active on the Internet (70% under 30 years old).

4 – Online media development is in the early growth stages.

5 – Wireless messaging services are ramping up quickly, although transitions are occurring.

6 – Broadband acceptance is growing rapidly.

7 – E-commerce is in the very early stages and governors exist. There are poor credit systems, inefficient logistic and transportation systems, low levels of trust and low levels of expendable money.

8 – Challenges for multinational companies create opportunities for Chinese companies.

9 – The third generation Internet entrepreneurs are impressive. Even with broad-based experience, leadership is not abundant. Management experience is low.

10 – Sustainability of Internet-related revenue and profits is still unproven, but the market opportunity is large.

11 – The government is focused on ramping up the Internet, in part to boost domestic and global trade.