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The Australian: The Chinese market’s tough to crack but it’s the place to be
The population of Shanghai, at 24 million, is slightly bigger than that of Australia.
But it was a mobile industry specific measure that really stood out: the number of mobile base stations operated by the largest mobile company, China Mobile, is 900,000. As a comparison, Telstra, Optus and Vodafone have about 16,000 base stations between them.
From the presentations and demonstrations at Mobile World Congress, there were some important implications for Australian businesses, both in the software and communications sectors and more generally.
The first was the extraordinary growth in Chinese e-commerce: sales were estimated at more than $500 billion last year, a 50 per cent increase on the previous year, and much of this occurred over mobile. This creates opportunities for Australian businesses, across many industries, to sell to Chinese consumers over e-commerce and m-commerce platforms.
The second is the opportunity for software and app developers in China’s booming mobile sector. The Australian businesspeople with whom I spoke said China was a tough market to crack, but the prize for those who managed it was significant. Australian software businesses tend to look to the US, but it will be increasingly hard to overlook China.
A third implication is that the move to the next generation (5G) of mobile communications is already well under way, with the industry targeting 2020 for its introduction. Many presenters spoke of the benefits from even faster speeds than 4G — and also the importance of 5G for the much-heralded internet of things. To take one example likely to affect Australian businesses, in just a few years 5G will offer new opportunities to operate mining and farming machinery remotely.
It was pleasing to meet two Australian companies exhibiting at Mobile World Congress. Smarttrans is an Australian Securities Exchange-listed company that has a payments system on the platform of all three big Chinese mobile carriers; it also offers transport software, which is being integrated in vehicles manufactured in China. Perth-based business Gworld offers software to authenticate products in the internet of things world. When a consumer buys a wine bottle from a winery using its system (which includes special packaging for the bottle incorporating a near-field communications chip) the product can be authenticated when the bottle is opened by waving it in front of a suitable smartphone. With counterfeit products a big problem in the Chinese market, this reassures consumers the product is genuine and communicates valuable information back to the winery about when and where its products are opened.
For both these companies, the chance to be part of this enormous mobile industry trade fair was a valuable marketing opportunity, targeting the mobile market in China, Asia and the broader region.
China is by far the world’s largest mobile market. Its three mobile operators, China Mobile, China Telecom and China Unicom, between them have more than 1.2 billion mobile subscribers. It is also an extremely fast-moving market. China Mobile introduced the newest version of mobile, 4G, last year and already has 200 million 4G subscribers.
The conference saw two days of industry presentations, workshops and panel discussions covering topics varying from Business Models for the Future Connected Internet to m-commerce in Asia, and The Road to 5G. But the real action was in the huge number of exhibiting companies — more than 350 — across five huge halls with an overwhelming array of technology and service displays. A wander through these halls gave an insight into the energy, innovation and competition in the global mobile ecosystem — serving 3.6 billion users around the world and generating more than $US3 trillion of revenue last year.
Korean operator SK Telecom’s SmartHome product allows users to control a wide range of appliances in their home from a smartphone. Hong Kong’s Computime group displayed its SALUS telehealth products, including remote monitoring of the health of patients and elderly people in their homes.
There were national pavilions from countries such as Israel, Taiwan and South Korea showcasing technologies and developers from those countries.
Vendors such as Ericsson, Nokia, Huawei and ZTE showed off the latest network technology; and there were all kinds of software offerings, such as new digital authentication products delivered over mobile.
With the China-Australia free trade agreement signed last month, the timing has never been better for Australian businesses to seek out the opportunities on offer in this burgeoning Chinese market.
Paul Fletcher is parliamentary secretary to the Minister for Communications.
