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Want to Know How EMEA Can Really Do Business in China?

I’ve been thinking a lot about China recently. I’m sure I’m not alone.

It offers such an amazing opportunity for businesses in the EMEA region, but it also offers some very real challenges. I’m going to look at both the wins and the whines and offer a simple solution for reaching the Chinese market.

Just how do you reach the Chinese market?

I typed into Google ‘how to do business in China’ to find out. I’m still none the wiser. The search returned some helpful advice from pages similar to this:

howtodobusinessinchina

An idle click or two and I was inundated with advice along the lines of:

“It is imperative that those doing business in China learn about areas such business culture, business etiquette, meeting protocol, and negotiation techniques in order to maximise the potential of their business trip.”

Now hold on a minute. I don’t doubt that this is all true, but isn’t it missing something? How are businesses going to be reaching their market in China?

The Elephant in the Room

The elephant in the room is the Internet, and it offers just as many potential barriers to effectively doing business as language, conventions, or etiquette do, yet it gets not a mention. It’s time to redress the balance.

Let me show you the problems that the Internet can present to doing business in China and a solution that Dyn can now offer to this.

First, let’s look at what’s at stake: here are the opportunities that China presents to EMEA businesses and details on the strength of ecommerce in China.

A Brief History of Booming Chinese Trade with EMEA

EMEA to China

There’s no need to stretch things back to the Opium wars: let’s focus on the here and now.

Europe

  • China is the EU’s second-largest trading partner, behind America, and the EU is China’s biggest trading partner
  • China and Europe now trade well over €1 billion a day

Middle East

  • China is also the Arab world’s second-largest trading partner, and the largest trading partner for nine Arab countries
  • Trade volume has increased from $25.5 billion in 2004 to $238.9 billion in 2013. Within ten years it is expected to reach $600 billion

Africa

  • China is currently Africa’s largest trading partner
  • In 2010 Sino-African trade was just over $114 billion, but by 2013 it had broken the $200 billion mark

It’s not saying anything new to note that there is a big opportunity in China for businesses, so let’s get back to the elephant in the room.

Ecommerce in China

  • With an online population of 618 million users, nearly one in five online users in the world is from China
  • 55 percent of the Chinese population is still offline, so there’s still plenty of scope for growth
  • China boasts 302 million online shoppers, and these are the world’s most active online purchasers
  • Due to a weak offline retail sector ecommerce is particularly strong in China: the average consumer shops online each month 60% more frequently than the typical American, and one in seven shop online daily
  • Online retails sales have, as a result, overtaken America’s, with $296 billion spent online in 2013 (up 41 percent on the previous year)
  • Ecommerce in China is growing three times as fast as the rest of its retail market

Online Opportunities

The opportunities for online sales and brand presence in China are clear: about as clear as an elephant in the room.

Any company looking to grow its international online market share should be looking to China, and the unprecedented growth potential it promises. Increasingly, it is also true that any company looking to reach the Chinese market and secure sales must look to the Internet.

Online Problems

And herein lies the problem.

Dyn recently highlighted the website response times of an international luxury brand in the different territories that it operates in:

  • EMEA: 3.6 seconds
  • North America: 4.1 seconds
  • South America: 6.8 seconds
  • Asia Pacific: 6.9 seconds
  • China: 24.6 seconds

In fact, 72 percent of multinational companies report that slow or unstable Internet access is affecting their ability to effectively do business in China.

Conducting business in China  is rich in opportunities, but potentially beset by pitfalls and elephant traps. One such trap is not having your website and DNS infrastructure within China as this could cause huge increases in latency, and frequent packet loss if you are transversing over multiple continents causing significant performance and reliability issues.

Online Solutions

This is where Dyn’s China Network provides a solution to the needs of global brands to connect faster and more reliably with the largest population of online users in the world. It spans multiple locations to ensure reliability and performance, but it allows most requests from within China to stay inside the country.

This results in increased performance and reliability.

  • It has already increased Dyn’s reliability in China from 95 to 99 percent
  • It has improved by 70 to 90 percent the average query latency from Chinese locations, meaning websites can deliver a much better user experience as web pages will load much faster

How to do business in China

If it’s online business you are interested in, it’s not etiquette but netiquette that you need.

Your DNS infrastructure needs to remove the need for requests to take a trip around the world to fulfill content requests because blocks, slow load times, and dropped packets can easily result.

And if you are not interested in doing business in China online…
… may I just point out the elephant in the room?


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Whois: Paul Heywood

Paul Heywood is the EMEA Director of Business Strategy and Sales at Oracle Dyn, a pioneer in managed DNS and a leader in cloud-based infrastructure that connects users with digital content and experiences across a global internet. Follow at Twitter: @Paul_Heywood and @Dyn.