RealTime IT News

Can etang Stamp a Web Brand on China?

The dilemma has faced capitalists for centuries: how to overcome formidable obstacles and sell to the massive population in China. So can a pair of Chinese natives who met at Harvard Business School use their Bay State business to stamp an Internet brand on China's wired generation?

The 9-month-old business is etang, and its founders, Haisong Tang of Shanghai and Dave Chang of Beijing, have joined a crowded field of start-ups looking to profit from the Chinese technology boom. Explosion evidence is everywhere: a quadrupling of Internet users last year to 9 million; 43 million cell phone owners; and predictions of 10-fold growth in Net users within three years, making a market of $6.5 billion.

Like business leaders in so many fields before them, Tang and Chang, who met through their Harvard biz school connection in 1996, started salivating at the opportunities offered by a market of 1.2 billion. After a series of conversations that began a year ago, they decided to create a Chinese-language Web portal and target it to the country's educated, techno-savvy generation of 18- to 35-year-olds, who represent almost 9 in 10 of China's Net users.

As Chang describes it, etang, which is based in Concord, Mass., with offices in Shanghai, Beijing and Guangzhou, was conceived to take advantage of the Internet's ability to do something practically unprecedented in China: develop a recognizable, home-grown corporate brand.

"In terms of brand awareness, China is like a blank sheet of paper," Chang said. "People may know some foreign brands, but there are almost no well-known Chinese brands. The Internet presents a tremendous opportunity to reach this generation -- young, educated, urban, relatively wealthy and sophisticated -- more easily. This is a business opportunity unparalleled in history."

Of course, etang is not alone. From e-commerce companies (Alibaba.com, 8848.com, Eachnet.com) to portals (Netease, chinadotcom (CHINA)) to Internet service providers (more than 300) to infrastructure plays, start-ups by the score are racing to be first through China's Internet door.

Duncan Clark, a partner in BDA China Ltd., a Beijing-based Internet consulting firm, likened the Internet to "an asteroid heading toward Asia." And he brushed aside the typical concerns raised about developing Net businesses in China.

"The big obstacles are being overcome," Clark said, noting that investment capital is flowing in, telecommunications infrastructure is being built at a furious pace, and phone and ISP charges are dropping.

Clark, along with other members of a panel at a weekend Harvard Business School conference on Asia, was also sanguine about two other potential Net hurdles in China: e-commerce payment and government regu