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Dollars and Sense in Asia-Pacific

the state of the region.



2:33 am on Mar 11, 2002 (gmt 0)

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I have been thinking lately about whether the Asia-Pacific region would be able to support PFI (Payed for Inclusion) and/or PPC (Pay Per Click) markets. The AP region of course has it's own set of circumstances and challenges which certainly set it apart from other global regions. The question is, can these regions support a payed search industry.

Looking at necessary criteria to support such an industry, I think we could break it down into: -

1) Sufficient Online Population
2) Established Purchasing Community
3) Funds Transfer Infrastructure
4) Communication Language

1) Online Population.

Taking figures from the Asia-Pacific overview [webmasterworld.com], which admittedly are now 12 months old, we can see that the AP region has around 25% of the total global online population. Significantly though is the fact that within the region we have around 42% of the regional population online.

Taking purely Online Population figures, the East Asia Region [webmasterworld.com] has the largest percentage, with China being the main contributor, followed closely by Japan, South Korea and Taiwan.

There is a big fall to the next region, being the Pacific Region [webmasterworld.com], which, in reality, equals Australia and New Zealand with a few Island Nations thrown in for good measure.

South Asia and South East Asia come next with the main Country to watch there being, purely from an online presence, Singapore, with perhaps Malaysia, Thailand, and Indonesia. In the South Asia regions most of the "onliners" come from India although it is a very small percentage of the total population for the country.

I think we would all have to agree that the Central Asia [webmasterworld.com] Region has a long way to go before becoming of major interest.

The Middle East on the other hand does have a credible online presence, mainly from Israel, but my also be of interest for other reasons.

2) Established Purchasing Community

What do I mean by this? Basically, a history of, and familiarity with, purchasing goods and services via means other than going down to the local shop. This would include Direct Marketing, Catalogue Sales, Phone Sales, and so on to Online Purchasing.

Most countries would not have any challenges in this area. For example, Australia, New Zealand, Japan, Hong Kong, Singapore, Taiwan are all “givens” from my own personal experience, and I would imagine Thailand and Malaysia would also fare well here.

Again from personal experience, China on the other hand is still very much a local shop economy although cities close to the border with Hong Kong and Macau are certainly being influenced by practices in those countries, oops, I mean Special Administrative Regions.

I would also surmise from business colleagues that Israel would be well versed with these additional marketing techniques.

3) Funds Transfer Infrastructure

The main challenge if you are going to start any form of Payed Search facilities is to make sure you can get the money.

Most of the countries mentioned have no problems in this Area. A few examples would be Australia, which has embraced Electronic Funds Transfer with a passion (I needed to write a cheque the other day and had to think twice to make sure it was correct), Japan, a given, Malaysia and Singapore with their “on the edge” Smart Card technology, and even Hong Kong and Macau due to the Colonial influence. Not to mention South Korea, Taiwan, or Israel.

Indonesia and Thailand I am not sure about though and would appreciate some comments from those who do.

China and India on the other hand would be a major challenge here. China does have Credit Cards and an EFT infrastructure but it is restricted in 99.99% of the time to internal credit cards and transfers.
The Chinese Government keeps a firm control on any overseas transfers, even when using OS Credit Cards. International Credit Cards can only be used at selected outlets, such as major hotels and restaurants, and many a time I have had to relinquish my passport along with the credit card to make what outside of China would be a simple purchase.

There is plenty of money in China, the challenge is getting it out of the country. Of course, those who do have “money” in China “emigrate” to a friendlier nation’s passport even if they do remain in China for business purposes but these people are certainly in the minority.

Having said that, there does seem to be movement on the Online Purchasing front within China itself. According to a CNNIC Report [cnnic.net.cn] (you have to scroll about halfway down) around 32% of the Chinese online community purchased something online in the last 12 months. Also, online stock trading [cnnic.net.cn] seems to be on the rise. So there is internal growth in this market, the challenge is to integrate with the rest of the world.

I have no experience with India however and am only guessing here. The Arabic Countries also present and interesting situation as there is definitely a lot of money there but I don’t know about any EFT infrastructure.

4) Communication Language

The biggest challenge in the whole region is there are so many languages to deal with, they are all so different, and there is no one language that effectively covers the whole region.

The most prevalent language on the Net is English. This bodes well for Australia and New Zealand as in my opinions they do not have a critical mass population to support their own PPC engine. From a PFI point of view, Stricko mentions here [webmasterworld.com] that paying for Inktomi with very country specific keywords does produce results. Also Looksmart Australia seems to be still there but is it worthwhile? Yahoo Australia offers the option of paying for a fast inspection of your site but is still admitting sites for free.

The most prevelant language in the Region is Chinese and whilst it does cover a number of countries, the payment infrastructures in those countries is small in relation to the overall online population so I cannot see a PPC engine for some time unless it an Internal one for China only.

Japanese however presents a real opportunity. Japan already has a relatively large and active online community with alternative purchasing process experience and also has payment infrastructures in place.

The other languages simply don’t have that critical mass factor as yet to be viable propositions. However they certainly warrant a close eye in the future.


The basic question in the minds of anyone spending money for PFI or PPC is “will I get a return and profit from my investment?” So whilst there are lots of people in the area, it really boils down to available money, spending habits, and funds transfer. If you have those in place with an online population to support it then you have a chance. Otherwise… An important signpost here is that Yahoo still offers free inclusion throughout the region, or at least the ones I could understand. Hong Kong Yahoo through Bablefish just doesn’t work..

So, in my very humble opinion, I would suggest that the next major development in the PPC arena will be Japan, as has already been hinted at here [webmasterworld.com]. Who knows, it may be closer than we think.

The BIG development to watch out for will be an International Chinese PPC engine although I suspect this will not be for some years as it depends more on the loosening of Government restrictions and improvements in financial infrastructure than anything else.

The wild card entry goes to the Middle East, lots of money, but how to get hold of it?

Australia and New Zealand, stick with the established English engines and target your keywords very carefully.

At least, these are my opinions, I would love to hear from people more qualified than me.

Bill, what about Yahoo Japan? PFI and PPC in Japan? Etc.
Topcat, what about Indonesia?
Eljeffe3, Chiyo, Thailand and Malaysia?
Anyone else???


4:34 am on Mar 11, 2002 (gmt 0)

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cant help much with specifics off the top of the head Woz, but I found it interesting to see that in Australia, consumers are starting to buy online from local sites rather than US sites.

Related is that in Malaysia, Thailand, and still in some ways Singapore, despite the political rhetoric from leaders, the assumption that "west is best" or "overseas products and services are better" prevails strongly. Foriegn services andproducts attract a premium way beyond what they deserve. I would suggest this is another factor in reducing speed of adoption of local PPC.

As you know Singapore is highly wired and Malaysia somewhat so, and are predominatly English speaking, but population levels and related online poplations are still small. Thailand has a bigger population, but high income differentials mean that the % online is much smaller - rather like China where those are ARE on line are good prospects and still represent a nice number. Thailand has a thriving internet industry but it is mainly in Thai. It could well be that PFI/PPC may get be feasible if not now, but down the track.

In most places I talk about the ability to use english is seen as a status thing.

Im not sure about Funds transfer issues in Malaysia. Yes the hardware infrastructure is there. But there certainly there is much red tape in Malaysia re transfers (we face it daily), and the government is prone to change things quick for political reasons, (as demonstrated before). As in most things Malaysian, yes the infrastructure is there, but the operation of it leaves much to be desired. Thailand also faces this too.

Agree on what you say re Japan, and thanks for the comments on China.

Just a few random thoughts. Will be following this thread closely..

4:57 am on Mar 11, 2002 (gmt 0)

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WebmasterWorld Administrator bill is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

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Interesting post Woz.

It's probably just a matter of days before Overture Japan opens its doors, so an answer to the PPC part of your question will be forthcoming. It's really anybody's guess as to whether they will partner with someone big enough to pull off the jump into this market. It is my assumption that they will have a successful launch here.

Yahoo Japan's Business Express listings cost ¥52,500 (US$400+), and LookSmart charges ¥32,000+ (US$250+) for its listings, so there is already an understanding in the market that you need to pay to get listed.

I already [webmasterworld.com] incorrectly jumped the gun in assuming that goo was moving to a PFI model. However, it wouldn't surprise anyone here if that did happen. All of the elements are in place, it just needs to be implemented by someone (most likely goo or Fast).


11:17 pm on Mar 11, 2002 (gmt 0)

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>but I found it interesting to see that in Australia, consumers are starting to buy online from local sites rather than US sites.

I should qualify here, we Aussies love toys and technology. Thus we have been using EFT for shop purchases for a long time. Over the last few years that has also moved to the net, particularly with Online Banking and Billpaying.

Moves are now (started a couple of years ago) being made to expand that to online shopping, mainly by the major retailers and small boutique shops. So while the percentages are low at the moment, I forsee a huge expansion of the online shopping industry in the very near future.


1:28 pm on Mar 13, 2002 (gmt 0)

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Not in the Asian Pacific, but being in South Africa, I think there may be some similarities between our country and the ones in your region (especially struggling currencies :) )

Our country (and I would argue), any African country would not be able to support a local PPC or PPI model.

I do however, make a distinction between
1) The big local blue chips and those exporting or generating foreign currency (US$, Euros, Pounds)


2) Medium to large enterprises applying their trade locally.

The first category compete globally or have aspirations of being found globally and have the budget to support a PPC and PPI campaign on the international engines. The second group develop brochureware and rely solely on Offline marketing.

We tend to focus on selling our services to the company's which fall in the first cat - wonder why! ;)

On a completely different note:
Woz, watched Oz make it four wins in a row at Newlands yesterday in the cricket! Ponting was superb :)

4:47 am on Mar 14, 2002 (gmt 0)

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As i know, china has the PPC program now.

You can find it at [baidu.com...]
which will display at [sina.com.cn,...] [163.com...] and [sohu.com,...] these most popular portal in china.

5:52 am on Mar 14, 2002 (gmt 0)

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yabbi that's great information, thanks. I hadn't submitted to BaiDu yet...have you used it? Is there a good return for your investment? There are very few competitors for my keywords, and this might be a good way to boost my site on the big portals. I'd be interested to hear of any experiences you might have...or have heard about.
9:47 am on July 14, 2002 (gmt 0)

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1. the Baidu.com have prooved that they can make money from ranking-charge. it's said that they collect about 10.000 chinese words to sell the rank.

2. but the highest bid is only about 1 rmb(eaqual to 0.15 us dollar) on average.So, they still have to wait and wait.

and, Woz, by the past post, I know you ever lived in China, could tell me more about it?


[edited by: Marcia at 12:05 pm (utc) on July 14, 2002]

3:38 am on July 21, 2002 (gmt 0)

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India still has a long way to go for PFI or PPC

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