On the one hand, China’s 649 million Internet user base is extremely tempting to any American entrepreneur. Can you imagine being the preferred search engine of those people? Can you imagine being the preferred social network platform for that user base? Can you imagine providing cloud services to such a market? The numbers are staggering and the advertising and recurring income revenue stream potential is definitely mouth watering. But looking at broad numbers, it can mislead many American companies looking to crack China’s digital wall.
While China does have 649 million internet users, this just a number. There is a distinct language barrier as well as a distinct cultural barrier. It is no surprise that the adoption rates for Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) weren’t as hot as locally established companies. This has always been the Achilles’ heel of any American plan to invade the Chinese market wholesale. A lot is lost in translation. It is very easy to spend a lot of money, time, effort, and energy trying to crack a foreign market and end up with your hands empty.
As tempting as China’s 649 million internet user base is, it pays to be cautious. The best approach would probably be to partner with local companies that have already captured vast segments of that market. Use that initial foothold to get a feel for local tastes and preferences and scale up from there. Otherwise, any wholesale market introduction of an otherwise culturally foreign concept and business can lead to wasted capital and wasted time.
