With the Asian economies quickly emerging from the economic downturn and the Western world still languishing in the worst recession in recent memory, growing Internet markets in countries like China look ever more attractive. Although accurate numbers are notoriously difficult to come by (much of the data is heavily politicized), Chinese broadband population already surpasses that of the US and its overall number of Internet users is higher than the entire US population (via SEW). With over 338 million of its citizens on the web (out of over 1.3 billion), China constitutes the single biggest Internet market in the world.

However, don’t expect Google, Yahoo! or Facebook to help you reach this growing market. As the data below shows, their reach in China is very limited, in part due to successful domestic competition, in part due cultural differences (take a look at this fascinating behavioral study conducted by Enquiro Research a few years ago), but also due to the direct intervention from Chinese authorities (traffic to sites like Facebook and Twitter is often restricted).

Search Engine Market

Just like other data, accurate information on the market share of the major search engines in China is difficult to come by and the numbers vary from source to source. According to iResearch, a Chinese Internet consultancy, 75.7 of searches in Q2 originated on Baidu, by far the most dominant search engines in China. Google came in second at just under 20 percent. Bing barely made a dent, attracting only 0.3% of searches. As PC World points out, the recent deal between Microsoft and Yahoo! does not include Yahoo! China, which is controlled by Alibaba Group, so the pooling of the resources between Yahoo! and Microsoft is not happening in China.

By taking a look at the market share of different search engines in China in Q2 2009, Analysys International comes up with a different set of numbers. According to their calculations, Baidu has a market share of 61.6 percent, Google trails at 29.1 percent, followed by Yahoo! at 5.6 percent. Although the numbers vary from source to source, the trend is clear — Baidu is a dominant search engine in China.

Social Media Market

Chinese online population is much younger than in the United States, with 73 percent under the age of 34 (34% in US), according to Netpop Research (via NYTimes). Chinese Internet users are also more engaged with social media, with 92% contributing online, according to the same source. As with search engines, local social networks are ahead of their US-based competition. The most popular social network in China is RenRen (formerly known as Xiaonei), with 23 percent of broadband users visiting the site. RenRen is followed by 51.com (19 percent), Kaixin001 (12 percent), MySpace CN (10 percent), and Facebook CN (8 percent).

E-Commerce

Of course, all this data is meaningless if the Chinese online users lack the purchasing power to make marketing worthwhile. There is little doubt that their American counterparts have much more disposable income and are more used to shopping online. Unlike entertainment, shopping is not at the top of the online activities list in China. However, according to iResearch, Chinese online shopping market had reached 56.36 billion Yuan (roughly 8.3 billion USD) in the second quarter of 2009. Although still small, the market was up 91.9% over the same period last year.

What Do The Numbers Mean?

China is quickly moving from being a factory of the world to becoming one of its most important consumer markets. Although most of the population is still poor, purchasing power in the major urban centers is growing by leaps and bounds. As an illustration, last April Porsche unveiled its new sports sedan in China before Europe or the United States. It would be wise for businesses looking to enter this emerging market to start exploring their marketing options online.

Update: there is a good post on advertising with Baidu down at Search Engine Land. If you are looking to get into Baidu, you can find a lot of useful information there.

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