Number of China's Internet users passes 500M

The number of Internet users in China recently exceeded 500 million, or more than the population of the United States. What are some possible implications of this huge user base?

There are more Internet users in China than the entire population of the United States, according to official data released by the China Internet Network Information Center late last year. This mind-boggling figure is achieved thanks to the 56 million new Internet users added in 2011, which brought the total number of Internet users to 513 million.

Even though there is a large number of cyberattacks that originate from China, the vast majority of its Internet users are typical Joes looking to access the Internet for work, play , and communication. So how has the Internet affected businesses and individuals in the world's most populous nation?

The Internet is affecting change

For a glimpse of the Internet landscape in China and how Chinese users are grappling with this relatively newfound means of communication, what better way than to take a look at the Weibo microblogs? Often equated to the Chinese version of Twitter, the use of Weibo is enormously popular in China with more than 300 million registered users to date. As with social networking sites in the West, not every user starts off with the right amount of caution over what they make public - with often disastrous results.

Case in point: A sanitation official from Liyang in Jiangsu province found himself placed under investigation after he erroneously took the social networking site to be a private messaging service. He apparently used the service to communicate amorous messages to an unknown female, including details such as the hotel room he'd booked for their trysts at a hotel. His account was picked up at some point and identified by his real-life profile picture. It became widely circulated among Wiebo users, and the rest, as they say, is history.

In Singapore, a Chinese scholar sponsored by the country's Ministry of Education and studying at the National University of Singapore (NUS) just last week had his final semester's scholarship benefits revoked and was ordered to perform three months of community service. He had posted on his personal Weibo that "there are more dogs than humans in Singapore." The comments went viral, sparking an uproar in the multi-racial country and intense public discussions about government sponsorship of foreign students.

A lot of public good has come from the Chinese use of Weibos too, what with an increasing string of corrupt Chinese officials being given the sack after being exposed on the Internet and made into objects of public vilification and criticism.

Strong government hand still present

Responding to the threats posed by unrestricted Internet access, the Chinese government had many years ago set up what is known as the "Great Firewall of China."  This is a sophisticated nationwide firewall designed to block access to materials considered to be subversive or pornographic in real-time, and which can be quickly tweaked by the insertion of additional keywords. This has resulted in complaints of slow Internet access, with businesses undoubtedly hit the hardest. While concerns over competitiveness of businesses are unlikely to sway the government's hand, it is understood that savvy Internet users circumvent the wall by using VPN and other means.

The Chinese government has retained a strong hand on Internet access, and has also rebuffed services that are seen as not easily controlled, such as Facebook and Twitter. It has also come down hard on rumors and information spread online. For example, recent rumors of a coup in Beijing making the rounds were countered with the arrest of six people and the shutting down of 16 websites. Moreover, two of the most popular microblogs, the Sina Weibo and Tencent Weibo, have also temporarily stopped users from posting comments for a few days.

What it means for businesses

It is evident that Chinese users are becoming increasingly Internet-savvy, and are using the Internet to communicate with family and friends. According to a report on the Sydney Morning Herald, Weibo is increasingly used by corporate heavyweights like Coca-Cola, Unilever, and Adidas as a marketing tool. In a somewhat ironic twist, Chinese firms are also using the Weibo to reach Chinese outside of China. It is increasingly evident that Internet-based marketing is gaining a critical mass with Chinese in mainland China as well as overseas.

Finally, the 500 million Internet users represent a penetration rate of a mere 38.3 percent of the entire population of 1.3 billion. Though growth may slow over time due to certain impoverished regions not being able to afford computers or have access to the Internet, businesses must realize that a similar Internet penetration as the U.S. (about 75%) will see the number of China Internet users soar to just below a billion users.

There is currently a vast, thriving Internet audience in China, one which is set for further, sustained growth down the road. The trick now is forging a connection to them.