April 12, 2006

As a recently published article in Forbes seem to suggest, "China Beats the U.S. in Total Number of Internet Users," it cites an assertion by Dr. Charles Zhang's, CEO of Sohu.com (China's largest Internet portal) that, according to his research in China, Internet users in that country would number over 155 million, possibly even as many as 202 million as/of February 2006.

As the article states: "Nielsen NetRatings, which doesn't have statistics for China, reports that the U.S. had 154 million active users in January 2006. This means that China, if Zhang is correct, would be at or even above America in the number of Internet users."

But do the numbers hold up?

To really have a clearer view in the matter, eMarketer compared them to other sources. First, as of the end of 2005, the China Internet Network Information Center (CNNIC) put the number of active Chinese Internet users at 111 million.

That figure is up from the center's estimate of 94 million of a year earlier, and over the past two years, the population has grown at a steady 18% rate.

The CNNIC figure is close to the Computer Industry Almanac (CIA) estimate of nearly 120 million Chinese users in 2005, still well behind the US at almost 200 million (higher, here, than the Nielsen//NetRating figure).

As for the future, eMarketer's projections do not have China surpassing the 150 million user mark until sometime in 2008.

Shanghai iResearch is slightly more bullish, but still does not project China reaching 150 million users until somewhat later this year, and does not expect the country to top 200 million until 2007.

"Given China's rapid Internet adoption and its far larger population, it's only a matter of time before the country has more Internet users than the US," says eMarketer Senior Analyst, James Belcher.

"The bigger question is 'so what?'."

There are significant differences in how Chinese Internet users behave online.

The large number of users who surf from Internet cafes, for instance, are often subjected to monitoring and filtering which does not exist in the US for the average consumer.

"Combined with the disparity in per capita income, differences such as this dim the luster of the Chinese Internet audience no matter how big it is," says Mr. Belcher.

"Savvy marketers should be careful to find the gems — while avoiding the fool's gold."

Source: eMarketer