Is your company looking to expand to China, particularly through online channels such as e-commerce? The good news: Western companies are finding it easier than ever to do just that. The bad news: Companies hoping to host those localised sites beyond the country's borders are probably going to lose Chinese customers, fast.
Why? Blame the nation's Ministry of Public Security, and its powerful Golden Shield Project. Perhaps better known to Westerners as the "Great Firewall" of China, this Internet surveillance project monitors content hailing from international online sources. It blocks content deemed subversive by the government.
In fact, Apple recently disabled the use of its iPhone News app within China, in a likely play to appease government officials, and to prevent any unapproved content from being aggregated on the app.
This surveillance slows down online content requests, which radically reduces engagement. For international content to reach a user in mainland China, it must travel from an overseas source server, and when it hits China's "virtual border," pass the Great Firewall's strict content examination. This examination has been especially thorough since the end of 2014.
The result? Very high response times for sites. In most cases, as high as 8 seconds. That translates into lost revenue.
According to Google, a website should maintain a server response time of under 200ms (0.2s). According to a widely quoted study by the Aberdeen Group, a one-second delay can cost a company nearly 10% of its sales.
At first glance, the solution seems obvious: companies that want to conduct online business in China should host their sites on Chinese servers. However, several in-country factors have led most foreign companies to avoid this route.
According to China Marketing, Chinese local Internet Service Providers (ISPs) provide substandard customer service. MotionPoint agrees with this assessment; we’ve found the challenges are often due to time zone differences and language problems. Secondly, the state of the Internet is rather complicated in China. Since major ISPs are unwilling to closely work together, hosting with one network might lead to slow load-times on other networks. Most Western companies don’t host sites in China, just to avoid the mess.
This seems like a no-win scenario-companies can either lose money on their localised sites (because they're hosted outside China), or lose control over load-speeds and business communication efficiencies (if they're hosted in China).
But there is a winning solution, which MotionPoint provides its clients. We operate localised websites for hundreds of companies, many of which conduct business in Eastern markets. We have unrivaled experience launching sites for mainland China.
Over the years, we’ve consulted closely with the Chinese government and local Content Delivery Network (CDN) companies, and conducted rigorous response-time tests on websites hosted outside of China.
Based on our exclusive data, websites that are hosted outside of China, with no MotionPoint optimizations, observed an average server response time of 8.1 seconds. That’s downright dreadful. Users won’t stand for it. With MotionPoint’s recommended solution, however, the response time is reduced by approximately 90% to 0.8 seconds.
How? Two key factors contributes to our proprietary approach:
Chinese websites operating in China require an Internet Content Provider (ICP) license, issued by the Ministry of Industry and Information Technology. These are called bei’an in Chinese. (Interestingly, you can usually see which websites have an ICP license; look for the permit number at the bottom of the site’s homepage.)
ICP licenses aren’t issued to sites hosted beyond China’s borders, unless a CDN company is used. While the specific aim of the Chinese government’s restrictions is to prevent the spread of subversive political content, having an ICP license also tells the Great Firewall that the content is already approved by the government.
This is extremely helpful for website operators—their content earns trust from the Great Firewall much more quickly.
Our analysis reveals that sites with an ICP license have an average response time of nearly 75% better than those that don’t.
CDNs are networks of distributed servers that efficiently deliver web content to users, based on the users' geographic location, and the location of the webpage and content delivery server. In other words: CDNs save copies of a website at a location closer to the target users, thus increasing a site's speed.
With its long, successful track record in Chinese localisation, MotionPoint has identified two common mistakes that companies often make:
Companies hire CDN companies with nodes located in Hong Kong. While Hong Kong is geographically close to China, it’s still considered outside of the Great Firewall. Content hosted here remains strictly monitored, especially with recent political unrests. Response times remain very slow.
Companies use the same CDN companies they use for other international markets, to host their Chinese sites. By Chinese law, foreign CDN companies can’t set up infrastructures within China. They can only collaborate with local CDN companies and provide technical support. Our test results revealed that websites utilising Chinese or Asia-based CDN solutions responded 77% faster than websites that use some non-Asia based CDN companies.
The takeaway: Many popular CDN companies simply don't improve a site's speed by any effective means in China. Companies should carefully choose their CDN partner as part of their larger strategy for entering the market. MotionPoint has some best practices, data and recommendations in choosing a CDN solution. Contact us for more information.
And if you’re with a multinational company that’s currently experiencing challenges improving your Chinese site’s performance, consider the factors described above.
Indeed, after acquiring an ICP license and collaborating with an effective CDN company, Chinese site response time decreases dramatically, which can make a meaningful impact on sales and a company’s bottom line.
Eric Watson holds a Master's Degree in Finance from Yonsei University (Seoul, South Korea). Prior to joining MotionPoint, he worked throughout Asia as a consultant. He completed his bachelor's degree with honours at Arizona State University in 2010 with a degree in Political Science. His non-marketing related research interests include the development of new manufacturing technologies, and the new national policies necessary to encourage their efficient and egalitarian adoption. He covers these topics on his website, The Policy Wire.
MotionPoint helps world-class brands grow by engaging and enriching the lives of new customers in markets around the globe.
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