Chinese People and their Mobile Phones: SMS

Monk and his mobile
credits: Michaeeel

As in most Western countries, mobile phones are also very popular in China, among all different age groups and walks of life -- sometimes seen in very unusual places. The contrast between China and other Western countries shows up in the -- astronomical -- numbers: up to 1997, there was little over 10 million mobile phone service subscriptions... today, there are more than 400 million.

Even more impressive is use of short messages (SMS): just in the first 10 months of 2005, there were more than 260 billion. Short messages are so popular that such demand pushes the industry into creating a myriad of services based on systems that automatically answer messages sent through SMS from costumers: for example, in big cities like Shanghai, one can check the Yellow Pages through SMS, make restaurant reservations through SMS, and so on.

UPDATE: I'm moving this blog to http://designative.info

Internet in China: Online Gaming & "Gold Farming"

Internet Cafe
credits: shizukabazooka

According to the China Internet Network Information Center, the population of Internet users in China by last June is over 123 million -- 63% of those people have broadband access. More that 20 million chinese play online games, and the e-commerce revenue have grown 50% in relation to last year numbers.

Estimates of the revenue of the online gaming industry points to a total of 1.3 billion dollars by 2009, an annual growth of 35%, according to IDC. Such growth ended pushing the numbers of other sectors up: online games brought 17.3 billion Yuan (2.14 billion dollars) to Telecommunication industry, 7.1 billion Yuan (887.5 million dollars) to the Information Technology industry, and 30 million Yuan (3.7 million dollars) to the Publishing industry.

UPDATE: I'm moving this blog to http://designative.info

Unlike american consumers -- who usually pay US$ 50 to buy a new game -- players in China, where software is still an issue, are not willing to pay much for their games. Therefore, game developers have to come up with creative ways to generate revenue: according to Bill Bishop, CEO of Red Mushroom Studios, one of the fastest growning areas of the game business in China selling online gear for game characters.

The gaming culture in China is even creating new professions: in Liaozhong, colleting virtual items of online games has become income source for many young people. Even some of the most conservative estimates might say that these so-called gold-farmers bring in around 200 million dollars a year in this underground virtual items auctions industry.

China, Socialism & Consumer Behavior

Ferrari Store
credits: shanghaidiaries.com

With the opening to new markets and the growth of the Chinese economy, a new social class has emerged -- to some extend, unthinkable in a Communist China: the millionaires. According to a survey from Cap Gemini/Merrill Lynch, the number of millionaires (in US Dollars) in China have reached more than 230,000. The large majority of these new riches choose Shanghai to invest their money and also spend their money. And these new riches can by quite demanding consumers: Yang Qingshan -- secretary-general of the Chinese Strategy and Branding Association -- says that more and more Chinese people invest in luxury items, such as cars, watches, designer clothes, accessories and cosmetics.

Seeking to target such people, new businesses that will recently were unthinkable in the "Empire of the Center": the Millionaire's Fair -- event organized by the Millionaire Magazine, held for the first time in 2001 em Amsterdam -- since then showcased products in countries such as France, Belgium and Holland, was hosted for the first time in an Asian country this year, in Shanghai.

UPDATE: I'm moving this blog to http://designative.info

Despite of the poor infrastructure, the e-commerce is also flourishing in China, fueled by so many wealthy clients: the number of online business in China surpasses 20 million.

Several luxury brands from all over the world have been attracted by these consumers: Dior, after opening several stores in china which sells over 11 million Yuan an year -- something around 1.3 million dollars--, recently opened a Dior Center in Shanghai, the third in the world after Paris and Tokyo, hoping to reach 15 million Yuan in annual revenues.

The luxury automobile industry was to first to acknowledge such market potential, and for years have been harvesting fruits of their investment in Asia: 3 of 4 most expensive units manufactured by Bentley last year, each one costing more than 8 million Yuan -- something around 1 million dollars, were bought by Chinese millionaires; 15% of all the limousines manufactured by Rolls-Royce had Asia has their buyers.

Despite of such explosion of consumption, the ordinary joe in China still keeps his money under the mattress: the Chinese National Savings is over 9 trillion Yuan-- a little over 1 trillion dollars, representing 45% of the Chinese Gross National Product (GNP). As a comparison, Brazilian National Savings -- also an emerging economy, goes around 25% of the Brazilian GNP. The rate of consumption over the Chinese GNP doesn't go over 50%, much lower the the overall world average of 80%.

Nevertheless, the Chinese Central Government doesn't want their comrades to stray away and recently created a system to overtax luxury items, trying to discourage spending and promote socialist values.