How To Do Online Business With China

With half a billion Internet users in China representing 40 percent of the population, it offers a growing opportunity for businesses selling goods and services online on order to reach this target market. Disposable incomes are rising and business opportunities are increasing, so it makes sense that cloud application providers, eCommerce brands, and financial service providers want to reach China. But, if not done correctly, the investment could be wasted.

One of the biggest challenges is the ‘Great Firewall’. The Chinese government implemented the firewall as a form of Internet censorship and to protect its citizens. Web property owners and brands need to respect the firewall and understand the restrictions and guidelines – as well as monitor and localise their content not just from a language perspective, but also to tailor to the firewall.

Getting your message past China’s Firewall

Both when crossing the ‘Great Firewall’ and once inside China, there is a high risk of websites being blocked. “Adult” content and gambling are strictly forbidden, along with deep political views. So for instance, clothing,  jewellery, and fragrance brands must ensure that photography on their websites is tasteful and that models do not bare more skin than deemed necessary.

It’s also worth noting that online shoppers in China are more likely to seek the opinions of others, so blogs, forums, and ratings are important, although they must be continuously moderated for inappropriate and political comments.

On the positive side, China’s Ministry of Internet Technology and Ministry of Commerce are finding ways to support and promote foreign investment in eCommerce. However, although China encourages eCommerce investment, navigating website regulations in China can be daunting. An extensive list of requirements includes verifying what licenses to procure and where to display them on your website as well as determining acceptable and unacceptable content.

Most organisations pay third party consultants and lawyers to help navigate the requirements and ensure compliance. However, without continuous compliance oversight, websites could still be blocked as new content is added and unblocking it is extremely difficult.

Slow performance

Hosting outside of China is also problematic. A typical website hosted in the US or EMEA takes 20 to 40 seconds to load in China. No website users will stick around for that kind of web performance. Even if you host a data centre in Hong Kong and maybe one in Singapore or Tokyo, you still have to go through the ‘Great Firewall’, adding 10 to 15 seconds. The Network Bench chart shows loading a web object from a data centre located in Hong Kong (red) vs. one inside the ‘Great Firewall’ (green) – Hong Kong is 50 percent slower.

Connections between different areas in China also pose a problem. Not all end users are in the major cities of Beijing and Shanghai. Millions of potential customers reside in tier 2 and tier 3 markets. China’s Internet infrastructure has limited peering points, fragmented network topology, and poor connectivity. Consequently, setting up data centres in major cities is just not enough. Performance will not meet your or your end-users’ expectations.

Building your own data centres throughout China would take years and have a high price tag in consulting fees and lawyers.  Colocating in China, will not help you reach all of China with consistent performance and, may still require you to  hire a consultant to help with regulations, licensing, and content.

Retail brands that only want to dip their toe in China, can use online “malls” including Taobao and TMall, but this will not establish your brand and build a market in China.

Another option is to work with a content delivery network provider that has points of presence in mainland China and local expertise to help with licensing, advice on content, and keep websites from getting blocked by content governing bodies. 

The network can also monitor regulatory changes, from both business and technology perspectives.

Jeff Kim is President & COO of CDNetworks Americas/EMEA