While Google may have recently closed its mainland China site, many other companies are keen to focus on the 400 million internet users in the world's most populous nation. Many of those going online in China are new to the experience, since internet penetration rates have doubled in the past two years. But a lack of experience with surfing the net does not mean a lack of enthusiasm.
In fact, Yuval Atsmon, an associate principal with the consultancy McKinsey in Shanghai who has carried out studies on internet use in China for a variety of companies, says the country has some of the most obsessive internet users in the world. That, Mr Atsmon says, presents opportunities and threats to companies operating there. "The internet has come late to China," he says. "The ability of people to experience it fully has only arrived in the past one to two years, so 80 to 90 per cent of users have only been using the internet for a few years.
"We carried out home visits and consumers who only discovered the internet a year ago talked about the internet taking over every single minute of their leisure time. In one family, they fought so hard [over use of the computer] they were considering divorce. "Lunch breaks were traditionally sleeping time but they are now using it to play games or follow up on stocks." Mr Atsmon says China's internet users have not had a gradual introduction to everything that the internet can offer. Many western consumers gradually became familiar with services such as online chatting and social networking because those functions developed over the years, but Chinese users had access to them from the moment they began to surf the net.
"We have used the term 'internet obsession'," he says. "It definitely feels like a very intense relationship, particularly for consumers who've gone through this discovery process. Between 50 and 70 per cent of people would spend the majority of their leisure time on the internet." This fanatical use of the internet ties in with the fact that much more time spent online in China is for leisure rather than work; far more so than in western nations.
McKinsey's research shows Chinese internet users are online for only half a day a week for work, compared with many times that amount a week in Europe. But while European internet users chat online twice a week, for the Chinese it is twice a day. Mr Atsmon says the medium has proved "very, very powerful" in creating positive and negative images of companies. As many as a quarter of China's consumers will now not consider a major purchase without carrying out online research first; twice as many as a year ago. Mr Atsmon says online reviews have largely taken over from those in magazines in terms of their influence on consumer behaviour.
The confidence of shoppers in online information extends beyond what fellow consumers are telling them to what the companies themselves post on the internet. "Most consumers believe information online is very credible," says Mr Atsmon. "Often a company website will get the highest credibility of any website. "When we asked people whether they trusted the salesperson in the store or the website, 65 per cent trusted the website but only 50 per cent trusted the salesperson in the store."
Online shopping in China is increasing at a rapid pace, and consumer confidence in company websites makes it more imperative for companies to ensure they make best use of the internet. Marketing and branding strategies in China must be different from those employed in other markets, says Mr Atsmon, who believes some companies make a mistake by simply translating the material they had in one market and putting it online in Chinese.
He says companies can use the internet in ways not open to them with other media. For example, Nestle, trying to encourage China's tea drinkers to consider coffee instead, produced an online soap opera set in a workplace where people were having a coffee break. "The programme is just gossip but it's a very entertaining topic," says Mr Atsmon. "It's a very creative way to promote coffee. They can deliver their message in a more elaborate way [than in a television commercial]."
Bloggers have also drawn the attention of businesses trying to sell their products in China, with marketing officials looking to find "the key people" with the most influential blogs, and influencing them. But there is a risk that internet users will see through a blogger who suddenly starts singing the praises of a particular product. Companies can, therefore, benefit if they are completely open when they are courting the bloggers, Mr Atsmon says. He gives the example of one car company flying a group of bloggers out to see its factory in Europe. The bloggers described what they saw and were quite open that they had been on what was in effect a promotional trip.
Such tactics are likely to be received more favourably by consumers than more sly attempts to influence the influencers, Mr Atsmon says. "Some companies might pay [the bloggers], but the best practice is bringing these people to experience their products, educating them about the value of their goods," he says. Online communities can also be a source of information for companies that are trying to gauge consumer views about their products in an ever-changing market.
But just as the internet can be a vital way for companies to promote themselves, it also carries risks. One example was the consumer campaigns against the French supermarket chain Carrefour after protests in Paris about China's policies towards Tibet interrupted the Olympic torch relay for the 2008 Beijing Games. The rumour was spread online that the Carrefour shareholder, the LVMH Group, had made a donation to the Dalai Lama, leading to a movement to boycott Carrefour supermarkets.
Mr Atsmon says companies have also been criticised online because "netizens" did not consider donations they made at times of national crisis, such as earthquakes, were generous enough. "Particular companies have been criticised for the little they have donated," he says. "For many companies, they didn't think that number would be measured and maybe they donate in a portfolio. "Online. there's a very nationalistic interpretation that can support very quickly, like with the Olympics and Sichuan [which suffered an earthquake], and maybe there will be for Expo 2010 in Shanghai.
"Brands can use that to increase their exposure in China but there's a risk it can backfire." business@thenational.ae