China: A Glimpse into the Shared Hosting Market in China with Ray Zheng, CEO, Racent

China is a unique country in many respects, especially when it comes to the Internet business. Huge both in size and in population, it’s almost a limitless market companies can tap into to earn their share. However, due to its uniqueness, it also seems to be a difficult market to master.

Taking a look into the shared hosting market of the country was something we at Site.pro wanted to do and were glad to get the chance. We’ve met with Ray Zheng, CEO of Racent, and during a singularly insightful interview below, he shared with us some must-knows about hosting services and domain businesses in China.

China and Local Market

Product Localisation

There is a common misconception in the business world that translating the product to Chinese is enough to enter the Chinese market. 'We’re seeing many companies thinking that they only need to translate their website to Chinese, and they will be ready to enter the Chinese market. This is not true, because many services are unavailable in China, and we use different types of products. For example, many companies outside of China use Cloudflare, but the problem with that is it’s not available in China. So if you are using it for your product, you can’t enter China with it.' Having the local tools in the product is a crucial part of entering the Chinese market.

The complexity of the language is another issue: it’s very hard to have a good translation of Chinese, and very often, translation also needs adaptation. So companies really need someone local, who knows the markets and understands the product, to do the translations for it to be professional. 'Many Chinese translations in fact don’t look or sound like Chinese,' mentions Ray.

Payment Processes in China

When it comes to online payment methods, in China three options are prevalent: Alipay, WeChat, and Union Pay. Union Pay is used mainly when paying through credit or debit cards, WeChat Pay is used for personal payments, while Alipay is a more popular choice for business transactions.

Opportunities in the Chinese Hosting Market

The Chinese market is a fast-growing one, and there are still opportunities for businesses to enter it. In fact, the Chinese domain market is #1 in the world in terms of growth. According to Ray, the question is not the oversaturation of the market, but how to enter it.

'For a hosting company to enter China is not that easy. They need to receive an ICP license from the government to start working, and it’s not so easy. To do this, you need to find a local partner. But the potential is also huge.' An alternative way for companies that want to enter the country, but can’t get a license is to establish a presence in Hong Kong. There are almost no latencies, and the services are good since Hong Kong is not very far from mainland China.

'I think getting a large number of customers and subscribers is still possible in China, but it all goes back to the challenges of localisation. If handled properly, there are many opportunities for businesses.'

Rules and Regulations

Many companies, for example, Google and Facebook, don’t have a presence in China. The reason for that is that the government wants to regulate the content. According to Ray, companies that want to work in China, need to have data centers in the country. This way, they are fulfilling the government rules. 'If you want to work in China, you need to follow the rules. But every country has rules, so it’s usually either this way or that way everywhere.'

Final Thoughts

Diving into the Chinese market was very interesting for us, because of the specificities of the market. Entering the Chinese market comes with a set of unique challenges and opportunities, which makes the process all the more entertaining. As a business, you need to be ready to invest the time and resources to adapt your product and your business strategies to local rules and habits. We hope that these insights we’ve shared with you gave you a better understanding of what the Chinese market has to offer once you decide to try your luck there.