It’s no surprise then that Chinese is rapidly catching up to English to become the most prominent language on the web. English web pages account for 27.3 percent of the internet, and Chinese pages lag behind at 22.6 percent. But considering Chinese internet use is growing by 36 million new users each year, Chinese pages are expected overtake English pages in three-to-five years. The internet also has less penetration in China than it does in English-speaking countries, meaning its capacity to grow is greater.

These are impressive figures. China is well and truly online. But what are exporters with goods and services destined for China doing about it? Not a lot, by all indications. Technology is changing so quickly and in such a way that Australian brand owners are absolutely clueless when it comes to their China web strategy. It’s commonly thought that simply translating their existing web offerings into Chinese will suffice as an online presence suitable for the Chinese market. Think about that for a moment. That’s a market where the biggest and best brands in the world are competing to engage the elusive audience of potentially 1.3 billion people, of which just under half are online.

If you are exporting to China, it is time to start exploiting the web. Who can argue with these figures? A good export strategy should include a serious focus on developing a Chinese web presence. This includes setting up a culturally adapted site suitable for the China market that takes advantage of China search engine optimisation. It is equally important to have a web marketing plan and a social media strategy that has been specifically developed for China. At the present time, only big multinational companies seem to be playing in this space.

For an example of just how serious the big corporations are about interacting with an online Chinese audience, look at the Chinese Johnnie Walker web campaign called ‘Sentiment Road.” Johnnie Walker employed Han Han as a frontman for the campaign. Han is a famous Chinese racing car driver and a ‘welebrity’, probably better known for his own blog than his on-road victories. This campaign includes blogs, tweets, online polls, photo albums, discussion forums, media articles and news with online video style documentaries. This campaign is so elaborate it was created in collaboration with one of China’s most famous film directors Jia Zhangke. This branding strategy is a huge departure from more traditional marketing efforst such as print media or television airtime during sport. It also highlights the reality that Chinese consumers are sophisticated, engaged web users. Johnnie Walker gets this. (Check out johnniewalker.blog.sina.com.cn to look at the campaign.)

Social media can work alongside Chinese culture to huge success. Sister Feng (or Feng Jie) is a microblog that has become hugely popular. Ask anyone you know from China and they will all know the story. Feng Jie was an internet phenomena brought about with the advent of social media, tapping into the Chinese love of ‘critiqueing’. The theme was about an ordinary looking girl with ridiculously high expectations for finding a husband. While Feng Jie’s story was orchestrated, the blog’s popularity is testament to the power of social networking in China. An unknown ordinary girl now has a cult following of millions of online fans plus media and promotional opportunities that have been very financially rewarding.

So once you know this, how do you choose what to spend your marketing and social media dollars on? It is simple to start by looking at what others have done. Choose a brand operating in China that is in-line with your product or service category, find someone who speaks and reads Chinese and have them research what that brand has done in China in the online space. It is not an exact science, and naturally, the best advice would be to use a consultant specialised in this field. It’s important not to leave this until your product is already in stores.

The Chinese online road map looks very similar to the one you’re (hopefully) familiar with at home, despite a couple of obvious differences such as language, culture and preferred aesthetics. For example, while websites in the West are starting to strip back to the clean feel pioneered by internet search giants Google, flash, moving animation and anything ‘more’ is better in China. The big Chinese search engines can give you an idea of this (try Sohu and 163).

Social media is also a different game in China. While Facebook and Twitter are blocked, free social media channels can be found on Sina Weibo. Popular, but paid social media services include Kaixin001 and Renren. IT’s also worth looking at QQ (Chinese MSN), Baidu (a Chinese search engine), youku (Chinese YouTube) and Taobao (Chinese eBay).

Free social media channels can be found on Sina Weibo. Popular but paid social media includes Kaixin001 and Renren. It’s also worth looking at; QQ (Chinese MSN), Baidu (search engine), Youku (Chinese Youtube) and Taoboa (Chinese ebay). Like Australia, Groupon or ‘deal of the day’ promotions are also popular; in fact there are more than 300 sites to choose from offering group-buying discounts. An example is meintuan.com.

China are not behind when it comes to innovation and adoption of web technologies. The industry is alive and buzzing. If you are planning to take your products or services there, it is imperative you take a serious look at how you intend to gain brand recognition and conduct your marketing campaign. The internet needs to be a big part of a sales and marketing strategy. Don’t overlook it because it seems a little confusing. You’d be making 457 million mistakes.

iiNet adapted its popular BoB2 product (a combined modem/router/VoIP device) for the New Zealand market, which will be rebranded and sold as the Orcon Genius. Other products from iiNet’s research and development division (iiNet Labs) will be released in the coming months.

Success in export is often defined by the ability to adapt products for different markets, rather than making a blanket offering. “We have been working with the team at Orcon to develop something that will work in both markets—from both a technology and product point of view,” said Steve Harley, CEO of iiNet Labs, indicating the company was actively seeking export opportunities.

“Orcon are the first export contract for us and we look forward to exploring more opportunities of this kind. The advantage we have as an ISP is that we know exactly what the product should do and how it should perform,” he added.

But Tim Moore is a mild-mannered Australian who simply followed his instinct and took his small photographic library online in 1995 before most people had heard of the internet. “It was obvious this line of work was going to be internet-enabled in a very big way, in a market and distribution sense,” he says.

Now photolibrary.com has 10 million images, thousands of hours of footage and music and competes as one of the top three image providers in the world. Chances are the cover of the book you’re reading, the last piece of advertising you saw or the gossip magazine you glanced at had an image or footage from the Photo Library archive.

The collection is held on a 70-terabyte server, whirring loudly away in the back of their North Sydney office not far from old metal filing cabinets where thousands of film photos are catalogued by subject.

Ninety percent of Photo Library’s trade is with overseas customers. Moore tapped the enormous English market in 1999 with a joint venture and soon bought out his partner. Photo Library became a major distributor in England and soon “the tail was starting to wag the dog” with British demand driving growth for the business.

With assistance from UK Trade and Investment, Photo Library used England to springboard into Europe.A shrewd move into Singapore (“I always believed Asia was going to be a vibrant marketplace”) drove business in South East Asia, and requests from other cities rolled in. “Progression was really based on demand and, to be truthful, quite a bit of risk,” Moore confesses.

In the UK and US, Photo Library concentrated on acquisitions to grow market share, trading off established brands. It now has 20 offices in 15 countries and a B2B market capturing 500,000 unique visitors a month.Photo Library’s big secret to success is glaringly obvious, Moore says. “Face to face contact. We’re probably the only company at the big end that has people going to see clients on a regular basis.”

Photo Library employs 80 highly trained sales staff to liaise with clients. “The internet is fantastic as a marketing and distribution tool but we believe that people still count.”

Competing with the likes of Bill Gates’ Corbis and privately owned Getty Images, Moore has concentrated on differentiation to gain market share. He looks for specialty brands with niche photography. “That allows us to walk in to a client and say, ‘Ah, yes, we have got something different, we’re not like the shop next door’.”

Photo Library offers a research service alongside targeted email marketing to known clients and Moore also has built a subscription based photo service to compete against iStock. “A really big mistake in internet companies in our industry, people think that because you have a website people come banging on the door. They don’t.”

Photo Library recently moved into the paparazzi image market, adding 5 million images to its collection. Moore says making this move in response to customer demand has given him a competitive edge. “Customers tell us what to do. That’s our secret.” He expects the paparazzi area to increase turnover by 30 percent.

In the next two years Photo Library will open more offices to service mainland Europe (it will open in Paris in September and in Berlin by the end of the year). “We don’t take on a project unless we know we have the cash flow or the capital to do it. We’re fairly conservative in that area.”
Photo Library sells to some of the world’s biggest corporations, but Moore says they don’t operate like a big international. “We still have the small business mentality.”

Warren Cowan, CEO at UK-based search marketing agency Greenlight, says Google’s withdrawal will mean Yahoo!, Bing and local search engine leader Baidu will take the remaining share of the search engine market. “For advertisers looking to target the Chinese market, it means a greater dependency on foreign operators who are less familiar to them, and less integrated with their ad operations,” he warned.

The Greens have commended Google’s decision.

“China is clearly involved in ongoing efforts to stifle freedom of speech and maximise censorship within its borders. This statement that has been made so publicly by Google has meant that governments around the world as well as other companies can no longer keep turning a blind eye to what’s going on in China,” said Senator Sarah Hanson-Young in a statement.

“Google must be commended for standing up today and sending such a strong message—not just to the Chinese Government, but to the rest of the world.”

Hanson-Young said those with commercial interests in China should reconsider doing business with people who are human rights violators: “The example that Google has set today is that if companies can challenge the Chinese leadership, so can governments.”

The Servcorp International Internet Report, which questioned 7,500 business people in 24 countries, found that Australia has one of the best internet services in the world, behind the USA, Japan and Singapore.

Despite this, Australians are still not happy with 85.4 percent believing the Government should invest more in internet infrastructure and 49.2 percent are calling for better regulation of telecommunication companies. A further 20.4 percent believe the internet service in this country is below average, bad or terrible.

Marcus Moufarrige, Servcorp’s general manager of South East Asia said it is disappointing to see that Australians don’t rate the internet services in this country as highly as others.

“There is a great opportunity for us as a nation to improve our internet systems. There is no reason why we can’t be leading the way with in the virtual world alongside the USA, Japan and Singapore,” he said.

As shocking as that may sound, even a natural person has no absolute right to use their own name in business. Attaching your name to a product in trade may in certain circumstances causes deception. This is clear and reinforced by such cases as Bradmill Industries Ltd v B & S Products where Bradmill, a substantial and well known textile manufacturer, was successful in restraining B&S from marketing textile products under the name ‘Bart-Mills’ despite the owners of B&S being Mr Bart and his son. The court took the view that the use of the family name in this instance would cause confusion among consumers.

Merely because a name is registered is no defence to a claim of passing off or an action under Section 52 of the Trade Practices Act for ‘misleading and deceptive’ conduct. As noted by Young J in Wallace v Baulkam Hills Smash Repairs (1995): “The purpose of the (business names legislation) is not to create property in a name, but to record for the public protection the identity of the person using the name…” The same applies to domain names.

A domain name or URL (uniform resource locator) is simply an internet address. The name and address being governed by a set of protocols between the various bodies that manage the internet. Internationally domain names are regulated by a US-based not-for-profit corporation called the Internet Corporation for Assigned Names and Numbers (ICANN).

Each domain name contains a generic top level domain that indicates the type of activity engaged in by the domain name owner e.g. ‘.com’ or ‘.org’ etc. It may also contain a country code, e.g. ‘.au’ that indicates Australia.

ICANN licenses domain name registers in various countries, which in turn licences registries such as AusRegistry to maintain a database of names ending in ‘.au’ which in turn accredit various registrars who are authorised to make registrations of domain names on behalf of applicants, in effect selling the domain names.

Is cybersquatting a crime?

Cybersquatting is where a domain name is registered in the name of a person or organisation that has no intention of using it. The registrant merely wishes to occupy the domain name to stop others from using it. Frequently, this is in the context of the cybersquatter in turn seeking to sell the domain name.

In the 2003 case of CSR Ltd v Resource Capital Australia Pty Limited, Justice Hill suggested that cybersquatting could be described in “probably less flattering names that could be used that might suggest the conduct verges on the criminal”.

In many cases it is simply cheaper to pay the asking price and buy the domain name from the cybersquatter than to go to the trouble and expense of seeking the deregistration of the domain registrant following arbitration by an accredited arbitration organisation including the World Intellectual Property Organisation (WIPO).

In the United States, the Anticybersquatting Consumer Protection Act 1999 permits an action by trade mark owners against cybersquatters who register, traffic in or use confusingly similar domain names with a “bad faith to profit”. There is no similar legislation in Australia.

From an Australian perspective it is not always the case that it is cheaper or easier to resolve these disputes by arbitration. Especially if the complainant must first show that the domain name is “identical or confusingly similar” to the trade mark and that the registrant of the domain name “has been registered and is being used in bad faith”.

In the 2003 CSR case, the court restrained the use of domain names including terms such as ‘CSR’ and ‘CSR Sugar’ by a company that had no obvious connection or interest in these names. In the United Kingdom, in the case of British Telecommunications plc v One in a Million (1998), the court described the domain names secured by a cybersquatter as “instruments of fraud” stating that the use of the domain names with associations to “British Telecom” and “Marks & Spencer” were done “with the purpose of appropriating the (plaintiffs) property, their goodwill, and with an intention of threatening dishonest use”.

Where there is genuine confusion caused by the cybersquatter between the domain name and a trade mark, consideration should be given to taking proceedings to restrain the cybersquatter from using the domain name.

Trade marks and exclusivity

Section 20 of the Trade Marks Act 1995 provides that the proprietor of a trade mark, from the date of registration of the trade mark, has the “exclusive right” to use the trade mark in relation to the goods and services for which it is registered. But, and this is a big but, notwithstanding the language of the section this does not necessarily give the exclusive right to use the trade mark.

Prior use by others may mean that they also have the right to use the trade mark. Very importantly, infringement of a trade mark only occurs where the use of the mark is as a ‘trade mark’ and this means use in a commercial sense or “in the course of trade”.

It seems clear from cases such as WD & HO Wills (Australia) Ltd v Rothmans (1956) that use for the purpose of trade mark registration does not include “private or personal use”. It follows that if the domain name is used for a “private purpose” that this will not be an infringement of a trade mark.

An additional difficulty arises because the concept of “use as a trade mark” is not consistent throughout the world. For example, in two cybersquatting cases, one in the United Kingdom and the other in Australia where the issue of trade mark infringement was considered, two different approaches are evident.

In the United Kingdom in British Telecommunications Case, the court was prepared to find that the “mere registration” of a domain name was use as a trade mark. In Australia on the other hand in CSR Ltd v Resource Capital Australia the court felt that more was required than mere cybersquatting to constitute use as a trade mark.

In the United States the Federal Trademark Dilution Act (1995) has been used to protect trade marks where commercial actions, for example registering a domain name that uses the trade mark of another, causes “dilution of the distinctive quality of the mark”.

As can be seen in Australia, United Kingdom and the United States, the registration of a domain name which incorporate another person’s trade mark may, depending on the circumstances, constitute an infringement of that trade mark. Registering domain names in a number of countries, without a thorough preliminary search may leave the registrant open to a claim that the trade mark of another has been infringed.

“E-government, e-health and e-education are some of the most important industries to benefit from advancements in broadband infrastructure … countries have begun to understand that broadband transmission infrastructure is not merely important for the direct social and economic use of citizens, but that it is equally important for the digital economy and includes critical sectors such as healthcare, education and smart grids,” the report noted.

It pointed out that a number of governments, including Australia’s, have taken the lead on an e-government level, and have also recognised how going digital can assist in areas such as healthcare.

BuddeCom highlighted: “The financial crisis has focused global attention on new infrastructure developments and facilitated a unique opportunity to shift the broadband emphasis from a high-speed internet service to a national infrastructure for the digital economy that will underpin a range of positive social and economic developments.”

See the BuddeCom website for an executive summary of the report.

The study suggests internet censorship could therefore be subject to challenge at the World Trade Organisation (WTO), raising issues over sovereignty. WTO member states are allowed to restrict trade on moral grounds, for example blocking access to sites containing child pornography.

According to the report, “many WTO member states are legally obliged to permit an unrestricted supply of cross-border internet services” and this has implications for systems in countries with restricted access such as China, Cuba and even Australia’s intended filtering plan.

The study said the WTO could preside over cases of disproportionate censorship that disrupts commercial activities by more than necessary to achieve the goals of the censoring government. Proportionate censorship would involve selective filtering measures rather than blanket bans.

“There is a good chance that a panel might rule that permanent blocks on search engines, photo-sharing applications and other services are inconsistent with [WTO] provisions, even given morals and security exceptions,” stated the report.

The full study by Brian Hindley and Hosuk Lee-Makiyama can be downloaded from the ECIPE website.

“The coming introduction of non-Latin characters represents the biggest technical change to the Internet since it was created four decades ago,” said ICANN chairman Peter Dengate Thrush. “Right now Internet address endings are limited to Latin characters – A to Z. But the Fast Track Process is the first step in bringing the 100,000 characters of the languages of the world online for domain names.”

Internationalised Domain Names (IDNs) will include around 100 new characters sets on top of the traditional 26-character Latin alphabet. The rules of use will include having only one set of characters per web address, to prevent phishing attacks that mimic legitimate websites with similar characters.

The process will begin on November 16 by opening applications for internet extensions in the available languages. If the applications meet criteria that includes government and community support and a stability evaluation, the applicants will be approved to start accepting registrations.

“The first countries that participate will not only be providing valuable information of the operation of IDNs in the domain name system, they are also going to help to bring the first of billions more people online – people who never use Roman characters in their daily lives,” said Rod Beckstrom, ICANN’s president and CEO.

Find out more about the program at ICANN’s dedicated website.

One of the biggest myths in this digital age is that having a website is automatically a ticket to export. While it may be true that anyone in the world can potentially find and buy from you, it would be a fallacy to expect success if you simply believe ‘build it and they will come’.

E-business specialist David Turner, digital strategist for Xtensha, says one of the biggest mistakes businesses make is not having a strategy behind their web presence. It starts with the level of integration they want with the internet; for instance, some businesses use their website to attain new contacts but then close the deal in person, whereas others may instead want a fully-automated system where a potential customer can browse for and purchase a product, and have the back end take care of itself.

Have plan, will build

Turner says exporters need to “come at it with a business planning approach” because at the moment there’s a lot of misunderstanding about the medium: “There’s a gap between people talking in terminology from an industry perspective saying ‘blog’, ‘RSS’, ‘shopping carts’ and the business people understanding that. They don’t actually know how it works or how it could affect their business.”

As the former e-business adviser for Austrade, and with a previous role as e-business director for the Australian Institute of Company Directors, Turner saw many businesses needlessly throwing money at website developers. “Unfortunately they think, ‘we’ll get the web guy to build it and we’ll add a shopping cart’,” he says.

“They have to sit down and follow all the business planning rules: who are you targeting, what do they need, what’s the right marketing mix, is this a real market that we’re after, what are the benefits for the customer?”

The idea that the customer comes first is very strong in an online marketplace where positions on search engines and the role of social media advocates become increasingly important to capture the customer looking for what you can provide.

Convenience is king online, says Mohammad Khan, Australia Post’s international business development manager. “In a couple of seconds, customers can shop anywhere in the world. Today more than ever before, customers decide when, how and where to buy,” he says. “Customers with considerable spending power who no longer have time to spend their money are likely to go online and shop. SMEs need to understand this trend and cater for this market.”

Turner agrees that businesses needs to set up a website to serves the customer, not the business. One mistake he often saw was the website using the business’ language, not the customer’s: “They miss out on search engines because they weren’t targeting the right keywords.”

It also pays to understand your target market, he adds. It’s no good believing you sell to the world when an investment in one market could be more profitable.

“One day they get an order from Norway and they think of the opportunities without taking a step back and considering whether that’s the right market. Maybe that’s an anomaly,” explains Turner. “Or, it might be an okay market, but we only have X amount of resources, and we’d be better off putting it into Sweden because we could get 10 times the sales there.”

This is the difference between proactive and accidental e-business exporters, he says.