Chang Eric Faculty Summit 071607

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Eric Chang Director of Incubation Microsoft Advanced Technology Center Beijing, China

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Urban Household : 182m People : 543m Total China Household : 368m People : 1298m Source: China National Bureau of Statistics, & Gallup Poll, Dec-2004, inspired by Sen. John Edwards’ “Two Americas”

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Even within urban, top 10% households make 8X that of bottom 10% Income differences between urban vs. rural Source: Gallup Poll, Dec-2004 USD 000

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Dramatic increase in electronics ownership between 1999 and 2004 …but significant gap between large cities, small towns and rural areas in 2004 Source: Gallup Poll, Dec-2004 % ownership by household % ownership by household, 2004

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Recently concluded qualitative research in Henan Province, Middle China; tested reaction to: Fone+ as a PC alternative Various applications on Fone+ Price points, hardware brands Participants all made between US$100 and US $250 per month, PC literate, owned mobile phones but did not have a PC at home Different age and life profiles Young Males 18 – 24 Young Females 18– 24 Single 24 – 35 Parents 35 – 45 Different geographic areas within Henan Large metropolitan area (ZhengZhou) Mid-sized, emerging town (XuChang) Small town, semi-rural (Hui County) Also conducted quantitative survey of 1146 people across non-rural China (executed by McKinsey)

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A sea of mopeds in front of town’s only non-Chinese restaurant But clearly, there is a new bourgeois in town

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Pop: ~½ mil HH Income: ~ US$200 per month 1/3 billion Chinese live in towns like Hui County

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Top scenarios fully leverage the TV % that selected the responses below 23% 22% 16% 7% 8% 6% 3% 15% Q: “If you could select just one thing, what would you say appeals to you the most about this idea? Source: Quantitative Survey of 1146 people aged 13 to 54 across non-rural China

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Eric Chang

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