A few days ago we took a picture of all the staff of Spill Group Asia and our game development company Zlong Games. The company has grown tremendously in the past 18 months (I started Spill Group Asia in January 2006). It’s fascinating to be in the internet industry in China right now, and experience hands-on what it means to be in an exploding business in the most booming economy on earth. Hard work, but lots of fun in a very dynamic business environment.

The Pew Internet & American Life Project just published a report about the fast growth of the internet in China. The study describes who the new users are, and what the consequences are for China in general and its relations with the outside world.

The research project also raises the question whether Chinese will be the lingua franca on the internet in the future. Something I do not believe in, I believe there will be a Chinese language internet and a non-Chinese one that are not very much integrated (quite similar to the current situation). If you are interested, the report can be downloaded here.

I also wrote an article about the research with my personal views on several of the points that the report focuses on. I posted it early this morning on Marketingfacts.nl (note: the article is in Dutch). Ogilvy’s Kaiser Kuo put his thoughts about the report in a blog post as well, his ideas can be read here.

Yesterday I was on a China Eastern plane from Beijing to Shanghai. When the captain made his usual announcements he made them in English first, instead of in Chinese. When I listened to him I realized he was not a Chinese but a foreigner (judging from the accent from a Middle-Eastern country). That was a first for me, I did not know that Chinese airlines started to hire foreign pilots.

Coincidentally, this afternoon I was having lunch with a business friend when he told me that he was on a plane from Changsha recently, and that he was very surprised to find out that the captain was a foreigner as well (from South-East Asia). It seems China Eastern started to do some serious recruitment overseas.

I hope for the pilots that they carefully read their contracts before signing them, because the contracts of Chinese pilots often contain clauses that make it almost impossible to quit. Originally these contracts were meant to protect the pilots from unemployment (they get a job for life), but now this is used against them: they cannot be fired, but they can also not leave the job for private reasons.

Last year there was a case where a pilot tried to resign from China Eastern to start working for one of the new private airlines. He was sued by his former employer and asked to pay 1.5 million USD. The court finally ruled that he should pay around USD 200,000 in compensation to the airline – effectively 3 times his yearly salary in his new job.

The reason that airlines do not want to let pilots go is simply because there is a major shortage of aviators in China. The aviation industry is booming, but the flight schools and the military (where many pilots traditionally come from) are not able to supply enough young pilots to fulfill the demand. It seems that they have now finally decided to let foreign pilots in. A smart move, but potentially a dangerous one as well: I am sure the pilots do not speak good Chinese (the Chinese announcement on the plane was made by someone else for example), and I am also quite sure that at least some of the air traffic control staff is not fluent in English.

Spill Group Asia, the online gaming and game development company that I set up last year Spill Group, and online video site Tudou.com both keep on growing very fast. That is also one of reasons that blogging is a bit light at the moment; others are that my internet connection at home is not working, so late night blogging is not possible, and the fact that I just spent a few days in Beijing in a hotel with only a dial-up connection – not good if you have a MacBook Pro that does not support this anymore…

Game.com.cn, currently our leading Asian gaming site, now has over 300,000 unique IP’s per day and about 6 million pageviews per day. As a comparison, around Chinese New Year (mid-February) we were still at 100,000 unique IP’s. According to iResearch game.com.cn is now the 4th biggest gaming site in China, and my aim is to be in the top 3 within a few weeks.

Zlong Games, the game development subsidiary of Spill Group Asia, also goes very well. The company has grown to over 50 artists and programmers, and will now be ‘split’ into two parts: the serious gaming division will be rebranded Seeriously and for the casual games we will start using the brand name GameDino. GameDino.com will feature all games that Zlong has built. Flash games can be copied for free from there, and downloadable games can be bought there (test versions can be played for free).

I have been working on a strategy to do more with multiplayer games, and soon we plan to launch this in China. Exact details we don’t know yet, but we might work with, or take over, an existing Chinese company (we found a very interesting one already). Next to that we also will focus more on India. In two weeks I plan to go to Mumbai to meet some companies there to see how we can work together. Interesting but hectic times!

In terms of numbers Tudou.com is doing even better than Spill Group Asia, after the USD 19 million C-round was closed a few months ago the site keeps on growing very fast. According to another iResearch report Tudou now has a 47% market share in China, based on time spent on video sites. In June we streamed 1.2 billion films on the site, and in July the clip views are up to 60 million films per day. Tudou also introduced its innovative advertising system earlier this month. Personally I think it looks very cool, and actually makes the site even nicer. If you want to read more about it check among others Kaiser Kuo’s blog post or this article in the Hollywood reporter.

Over the past weeks I received more and more emails from readers who want advice on finding accommodation during next year’s summer Olympic Games in Beijing. It’s getting too much to answer all of them (which I regret), therefore I decided to do a blog post about this subject.

First of all, as the name of this blog implies, I live in Shanghai and not in Beijing. Therefore I do not have the inside scoop on which hotels you should try, and which are fully booked already. What I understand is that it is impossible to find a room in one of the centrally located 5-star hotels in Beijing, likely because tour operators snapped up all the rooms. If you want a room, try to get one through a tour operator – you will end up paying more, or you might be forced to also book tickets through them. Some hotels close to the Olympic venues, such as Purple Jade, still had rooms a few months ago, but were charging outrageous prices (USD 1700 per night for a standard room).

If you are not able or willing to pay such prices you can try to stay in a smaller hotel. These can be found online, e.g. by using the English version of Ctrip. You might not be able to book online one year in advance for rooms, but at least it gives you an idea about hotel names and facilities, and their usual prices. Then you can then try to find the websites from these hotels in Google (although many may not have a site), and call them or send them an email. If you call be prepared that nobody speaks sufficient English, and if you send an email you might not get an answer. But if you try several hotels one should eventually work. Tip: The Home Inn hotels have decent, clean rooms and are not expensive (less than USD 40/night for a double room).

Another option is to look at serviced apartments. You may need to book them for at least a full month, but you might still end up saving money in the end. A Google search should help yo to find them. If you want to see a lot of events, the best location would be in the north or northeast of Beijing (Haidian, Asian Games Village or Chaoyang district) because of travel times to the Olympic sites.

But there is also the option to live in apartments that people rent out especially for the Olympics. A fellow entrepreneurial Dutchman, Piet Bos, set up a website for this where people can offer accommodation and others can rent it. The site can be found at http://www.homestaybeijing2008.com I think this is a very smart idea, and I hope many people can find decent and not-too-expensive beds during the Games through his site.

In case I find new information about accommodation over the next 12 months, I will post it as an update to this blog post. If you have any information that I should add here, please put it in the comments or send me an email at marc (at) spillgroupasia (dot) com

Today was not my day. I planned to do a lot of things, but when the internet did not work this morning (once again) my whole schedule fell apart. I wrote a column for a Dutch magazine, but could not do any research online, so I was not too satisfied with the result. I checked my email on my phone, but it’s a nuisance to answer emails with a small keyboard. We had to wait at home for a person to repair the internet (so we could not go out), but when he finally arrived he could not find the problem and we are still without internet.

I wanted to do something and decided to go to Xujiahui and check if they have any black market iPhones already. The iPhone fever somehow intirigued me, I still don’t think this is a great phone, but I’ll probably buy one anyway to try. But when I left the building it started to rain heavily, so I went back home. I started to read a book, but still felt I needed to do something. So when the rain stopped after an hour or so I decided to go for a walk in a part of town where I don’t come often. My wife did not feel very well, and decided to stay home.

I took a cab to the Ritz-Carlton and took a left from there onto Xikang Lu. I occasionally drive through here, but the last time I walked here was during a visit to the Jade Buddha temple about 4 years ago. Lots has changed, but not in a negative way. Yes, there are a lot of new apartment buildings, but there are also lots of old areas left. And some of them are totally redeveloped, and could really change this part of town in the near future.

Especially the New Factories area (Xikang Lu / Yuyao Lu) was impressive. Several good bars and restaurants, including Cafe Montmartre (my favourite lunch place in its old location before the Xiangyang market was torn down) and a City Diner. But there was nobody there… Maybe because of the rain, but still I had expected more people here on a Saturday afternoon. Possibly people don’t know about it yet, for me it was also my first visit here. But I will be back for sure.

On my way back I walked through Shanxi Road, and passed an old villa that my former company (China Bay Partners) had almost rented as an office. At that time (2 years ago) the area was not that impressive, but now it had turned into an upper class location. Among others there were a Cambodian Spa, a store with Mediterranean food products, and a high-end wine cellar. It still amazes me how things change in this city.

I ended my walk at Malone’s, where I am now sitting on the terrace having a Tiger beer (well, two actually) while using their free wifi. Well deserved after a two hour walk in 30+ degree temperatures and after being without internet for almost 24 hours.

The roads in Beijing are even more congested than in Shanghai. The Shanghai Daily writes that according to Beijing’s Road Traffic Management 90% of all roads are at full capacity, which seems a bit high to me. The paper does not question this figure, but likely they only look at the average for major roads during certain time periods.

But statistics aside, the roads in Beijing are indeed overloaded and it’s getting worse by the day. Literally, because each day 1000 cars are added to the Beijing car population. During next year’s Olympic Games this will be a major problem, because there will be 350,000 extra cars on the road – and now already Beijing is gridlocked.

Therefore during the Olympics many cars will not be allowed to drive in the city. And in order to rehearse that, the Beijing government has decided to close the road for 1 million Beijing cars next month! But according to a spokesman for Road Traffic Management this will cause little inconvenience. His logic: Students will be staying home for the summer holiday and working people can take public transport. Well Mr. Spokesman, you probably don’t have a car yourself so it won’t be an inconvenience for you, but navigating Beijing by bus or subway is not the most convenient way of traveling in the middle of summer. That’s exactly why most people bought a car in the first place.

I think Shanghai is doing a much better job in this respect. The subway infrastructure is already very good, and more lines are added each year. And for cars you pay a one-time license plate fee of more than USD 5,000, making sure that not everybody rushes to buy a car. Maybe Beijing should consider a fee system as well: charge an amount of money for car usage during this period. This gives people a choice instead of forcing them to abandon their cars during the hottest period of the year. Given the price sensitivity of the average Chinese, this may actually work pretty well.

Last night I was tired from work, and suddenly felt I was in need of a short vacation. So I browsed the net for a nice location to spend a mini-break with my wife. I first looked at one of the Nusa Dua resorts on Bali, but there are still no direct flights to there from Shanghai, so I decided to choose a location closer to home. Hainan is then the easiest option. I have been numerous times to China’s Hawaii already, and spending a few lazy days around the pool or on the beach there is always a safe choice. We normally go to Yalong Bay, close to Sanya, where all the major hotel chains have set up resorts. There is not much to do there except for eating, drinking and relaxing, but that’s what a mini-break is all about anyway, right?

Two of the resorts I have not stayed at so far are the Hilton and the Marriott, so I decided to check their location and prices online. In China the most comprehensive travel website is Ctrip, so naturally I searched there for prices. I went to the English version of the site, and looked at their resort selection. My wife was using her laptop as well, but she was on the Chinese version of Ctrip. I always assumed that both sites would be mere translations of the other, but that turned out not to be the case.

First of all, the Hilton did not appear on the Chinese site. It seems to be the most expensive resort on Yalong Bay, so that may be part of the reason (prices starting at EUR 200 per night). When we looked at the Marriott, however, I was startled to see that the prices on the Chinese site were lower than those on the English one! Not a big difference, RMB 1513 for a certain room type on the Chinese site versus RMB 1680 on the English one, but still a difference of more than 10%.

I guess they get away with it because people normally don’t use both sites, but it does not give me a good feeling. The law in China is that foreigners cannot be officially overcharged anymore (until not too long ago there used to be different ticket prices for foreigners at for example sight-seeing places). But I think legally a website can do this, as the prices are not based on nationality but only on language ability. From now on I will use the Chinese version of Ctrip to book rooms, and only if I cannot find a certain resort I will also check the English site.