1. China is the second largest VC market in the world. US$5.8 billion has already been pumped into the Chinese VC Market in the second half of 2010 alone. This means there will be more start-ups with stronger staying power entering the market which creates the perfect opportunity for marketers to leverage the VC money, develop know-how and new marketing approaches jointly with the new breed of digital media partners.
2. Proven product managers in established Chinese internet firms are being proactively scouted by VCs to start their own new ventures with earmarked funds. Marketers will recognise these upcoming 'start-ups' are indeed operations run by experienced leaders and the product managers they are working with in established internet companies today, can one day be the CEO of the next Tencent.
3. Innovation is being systematically cultured and replicated in China. Under such keen competition for new ideas and entrepreneurs, in just the last two years, a few dozen high-calibre incubators has been set up to produce start-up companies based on past and proven formulas as blueprints.
Independents such as Innvoation Works, started by Kai-fu Lee, the well-respected ex-CEO of Google China, as well as incubators run by established internet giants such as the Shenda Innovation Institute, are great examples of this new breed of institution where innovative new media companies are being created mindfully. With an innovation infrastructure like this in place, truly forward-thinking marketers can now have a more tangible way to engage innovations.
4. The launch of the Growth Enterprises Board (GEB), termed as China’s Nasdaq, opens up the possibility of domestic IPO exit which further attracts investors to fund innovations in China’s own media space.
5. Online advertising dollars will mean more to digital media owners as online usage further expands. Take the largest internet company in China, Tencent, as an example. Only eight per cent of its RMB12 billion in revenue in 2009 was from online advertising, whereas the remaining lions share was from user fees for paid services. But as internet usage expands into lower tier cities and audience segments that are less ready to pay, online advertising will play a bigger role, especially in the form of subsidising some of these paid services to those who prefer them to be free. Marketers who can best articulate this exchange will have distinct advantages.