Chinese New Year is only a few short days away, and as China gears up to light off enough explosives to slightly shift the earth’s orbit, let’s look at what’s ahead for the country’s tech sector in the Year of the Ox.
There’s little doubt that the global economic downturn (or the slightly friendlier Geddie, as I like to call it) is going to play a huge role on what tech makes and breaks in the “Niu” year.Consumers and corporations are already tightening their utility belts in the face of less disposible spending. But this doesn’t mean that 2009 isn’t going to bring growth to industries that can figure out how to do it right.
I have to agree with Isabella Chen, possibly the only CNET Asia blogger with fanboys, who in her recent post said:
Personally, I think a lot of the frivolous spending on things that added very little value will be scrapped, and some serious money will be spent on truly novel technologies that are genuinely lasting.
With angel and VC funding on a short leash, startups are going to have to be ever more creative in both their products and their spending. Gone are the days when money would be poured into “maybe” ideas in hopes that something will come of it.
More than ever, businesses will need to show clear potential and thought-out planning if they hope to obtain any sort of investment.
This could mean great things for us consumers. Rather than having to wade through buckets of coal for that one diamond, the economy may do the heavy lifting for us.
As it relates to China, I think we’re going to see two, somewhat related, industries in particular (continue to) grow this year.
With the announcement just a couple of weeks back that 3G networks are finally coming to China, the mobile market is definitely where I’d be putting my money (if I had any). With about 600 million people sticking the little cancer creators to their ears, and a new high-speed network to assure their thumbs cramp from all the new apps and games being developed just for them, the Chinese telecom market was recently heard saying: “Recession? What recession?”
The other big contender for Geddie survival, IMHO, is online gaming. According to a report released last year by Interfax, “China’s online game industry has entered a boom period, with online game operators generating increasing revenues and a growing number of new entrants coming to the market every year. Sales revenues achieved by online game operators totaled 10.57 billion yuan (US$1.55 billion) in 2007, and the figure is expected to reach 12.67 billion yuan (US$1.86 billion) in 2008 and 18.21 billion yuan (US$2.67 billion) in 2010”.
In actuality–according to a recent report jointly published by the Game Publication Working Committee of the Publishers Association of China and the international market research firm IDC–China’s online game industry took in a remarkable 18.38 billion yuan in 2008–a whopping 76.6 percent YoY increase.
With a solid creative workforce to pull from, relatively low overhead, and a user base of virtually everyone and their brother, it’s hard to fail–a fact that companies like NetEase, Shanda, The9 and Giant Interactive are banking on.
Gaming in China is also going to benefit from the new 3G network. Lower fees and increased bandwidth mean that gammers are going to be scrambling over themselves to start selling the latest “Sacred Relic of the Zerg” via their Nokia.
In a recent interview, Wang Leilei, CEO and chairman of KongZhong Corp. (operator of China’s largest mobile Internet portal – Kong.net), said:
“Many mobile phone game developers were so hampered by bandwidth problems that they could only develop non-networked mobile games in the past,” he said.Wang said that according to his company’s research, around 200 mobile games were launched in China in 2008, of which 90 percent were unsuccessful due to low bandwidth and an immature market.”3G will not only expand bandwidth, but it will also introduce more partners for mobile phone game developers, such as social networking services, instant messaging services and in-game advertisers,” Wang said.
The Year of the Ox is likely to bring with it many headlines of companies that wither and fade from Geddie’s witchy ways and finicky finances. However, out of necessity comes innovation, and 2009 will undoubtably bring with it some exciting and unexpected sunshine to an otherwise bleak horizon.