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MAY 12, 2000 VOL. 26 NO. 18 | SEARCH ASIAWEEK The Mainland - Unplugged China's mobile masses put WAP on trial By PAUL MOONEY Beijing China's cellular phone market is among the fastest growing in the world, so naturally the country is seen as an important testbed for the emerging field of wireless Internet access. Experimentation starts in earnest on May 17, when the country's mobile network operators can begin selling new data services over WAP (wireless access protocol) phones.
"There are two things that are hot, the Internet and mobile phones," says Larry Rinaldi, chief of Net advertising agency Ogilvy Interactive's China business. "When you put those two together, it's explosive." China's two primary cellphone companies - China Unicom and China Mobile Telecom - are not the only possible beneficiaries. WAP is seen as way to introduce more of China's citizens to electronic communications and e-commerce. Fewer than 11 million Chinese surf the Net, and despite an explosion in the number of domestic e-commerce sites, a paltry $6.6 million in retail trade was conducted online last year, according to China's Computer and Microelectronics Industry Development Research Center. Cellphone users, on the other hand, outnumber the country's Web surfers four to one; Subscribers ballooned by 72% in China last year to 43 million. BDA China, an Internet consulting company, says the mainland could have up to 6 million people accessing the Internet the wireless way by 2002. That could mean some $386 million a year in revenue up for grabs. Leading Chinese dotcom players could use the cash to survive, and many are racing to create Internet services and content for miniature phone screens. Last month, Nokia signed an agreement with leading mainland portal Sohu.com to provide news, stock information and other wireless services. Motorola is helping Sina.com and business-to-business site Alibaba.com create wireless services. Also under development are banking and travel applications. China today lacks developed financial and credit networks, a situation that makes it difficult for conventional e-tailers to accept payments electronically. Some observers say mobile phone companies could provide a solution by acting as financial clearinghouses between websites and customers. In addition, WAP cellphones could let users pay for goods and services through deductions from smart debit cards that plug into handsets, says Derek Sulger, chief financial officer for Shanghai-based Intrinsic Technology. "I think that it is very conceivable that we will be paying for a significant amount of day-to-day transactions via the mobile phone within a year," says Sulger, whose company is building a WAP portal for China. Still, technical and marketing issues stand in the way. It's not clear whether people will accept the necessarily bland text presentation of content on tiny screens. There are also security concerns which could hinder mobile e-commerce: cellphone calls can be intercepted with unsophisticated radio-channel scanners. Victor Wang of GWcom, a Shanghai wireless services applications provider, says first-generation WAP technology may leave some consumers wondering what all the fuss is about. "There are too few applications, speeds are slow, and there is a problem with information display," he says. "When marketing this you have to set the right expectations." And, as companies trying to tap China's consumer markets often find, it helps to keep expectations low. Write to Asiaweek at mail@web.asiaweek.com
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