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Masterarbeit / Master's Thesis MASTERARBEIT / MASTER’S THESIS Titel der Masterarbeit / Title of the Master‘s Thesis „Electronic marketplace in China. Why American Internet Technology Companies failed in Chinese market“ verfasst von / submitted by Daniela Ignatova-Mincheva angestrebter akademischer Grad / in partial fulfilment of the requirements for the degree of Master of Science (MSc) Wien, 2018 / Vienna, 2018 Studienkennzahl lt. Studienblatt / A 066 914 degree programme code as it appears on the student record sheet: Studienrichtung lt. Studienblatt / Masterstudium Internationale Betriebswirtschaft/ degree programme as it appears on Master Degree Programme International Business the student record sheet: Administration Betreut von / Supervisor: ao. Univ.-Prof. Mag. Dr. Josef Windsperger 1 Acknowledgements I would like to thank my parents and sister, who motivated me from the very beginning and through the whole educational process, to my husband for his support and help during those years and to my colleague and very good friend Setareh, who was always there for me with good advices and comments for improving my master thesis. I would like also to express my appreciations to Univ.-Prof. Mag. Dr. Josef Windsperger who agreed to supervise my paper work and always found time for me despite his full of engagements schedule. At the end, I hope that this topic would be interesting for you as a reader and elucidating the theme why some big American internet technology companies were forced to withdraw the Chinese electronic marketplace and making you thoughtful would raise some future questions. Vienna, 2018 Ignatova-Mincheva, Daniela 2 Author´s Declaration Unless explicitly stated in the text or references, I certify that this thesis is entirely the result of my own intellectual work. I take full responsibility should any of the included facts or my own reasoning arguments be incorrect or flawed. This thesis has not been previously submitted elsewhere - neither parts of it, nor in its entirety. I declare that the printed thesis is identical to the submitted electronic one. Date: 5.09.2018 Signature: D. Ignatova-Mincheva 3 Table of contents 1 ABSTRACT ......................................................................................................................... 7 ABSTRAKT ................................................................................................................................ 8 1.1 List of tables and figures ............................................................................................ 9 2 INTRODUCTION ................................................................................................................10 3 OVERVIEW OF CHINA .......................................................................................................11 3.1 Short history of China ...............................................................................................12 3.2 Patterns of cross-cultural business behavior ..............................................................12 3.3 Product placement in China ......................................................................................14 3.4 Negotiating with Chinese business people .................................................................15 4 CULTURAL DIFFERENCES. A COMPARISON BETWEEN U.S. AND CHINA .............................16 4.1 Hofstede’s 6-D model of national culture ..................................................................17 4.1.1 Individualism vs. collectivism .................................................................................... 17 4.1.2 Level of power distance ............................................................................................ 18 4.1.3 Masculinity vs. femininity .......................................................................................... 18 4.1.4 Uncertainty avoiding vs. uncertainty accepting ........................................................ 18 4.1.5 Long term vs. short term orientations ...................................................................... 19 4.1.6 Indulgence vs. restraint ............................................................................................. 19 4.2 Impact of cultural differences....................................................................................20 4.2.1 Cooperative strategies .............................................................................................. 20 4.2.2 Conflict management ................................................................................................ 20 4.2.3 Decision-making ........................................................................................................ 20 4.2.4 Work-group characteristics ....................................................................................... 21 4.2.5 Motivation systems ................................................................................................... 22 4.3 Factors affecting differences .....................................................................................22 4.3.1 Payment system ........................................................................................................ 23 4.3.2 Logistic system .......................................................................................................... 24 4.3.3 Language barriers ...................................................................................................... 24 5 ELECTRONIC MARKETPLACE IN CHINA ...............................................................................25 5.1 Stages ......................................................................................................................25 5.1.1 Novelty stage (1998-2000) ........................................................................................ 26 5.1.2 Incubating stage (2001-2003).................................................................................... 27 5.1.3 Empowering stage (2003-2006) ................................................................................ 28 4 5.1.4 Growth stage (2007-2010) ........................................................................................ 29 5.2 Statistic of internet users in China .............................................................................30 5.3 More facts about the Internet in China ......................................................................33 6 GREAT FIREWALL OF CHINA ..............................................................................................34 6.1 Internet censorship and regulations ..........................................................................35 6.1.1 Self-censorship .......................................................................................................... 37 6.1.2 Multidimensional regulations ................................................................................... 37 6.1.3 Censorship technologies ........................................................................................... 38 6.2 Collateral damages ...................................................................................................39 6.3 Control over the internet ..........................................................................................41 6.3.1 Cyber Police ............................................................................................................... 41 6.3.2 Blockade of the Information Network ...................................................................... 42 6.3.3 State stability ............................................................................................................. 43 6.4 Internet development and democracy, and e-government .........................................43 6.4.1 Internet development and democracy ..................................................................... 43 6.4.2 E-government project ............................................................................................... 44 6.5 Control and evolution of Cyber-crimes ......................................................................44 6.5.1 Laws and regulations ................................................................................................. 45 6.5.2 Pornography and online gambling ............................................................................ 46 6.6 Users’ perception of internet security .......................................................................47 Comparison of 27th and 39th Survey report on internet development in China ....................47 6.7 Fight against Great Firewall .......................................................................................49 7 AMERICAN INTERNET TECHNOLOGY COMPANIES IN CHINESE ELECTRONIC MARKETPLACE. CASE STUDIES ..........................................................................................................................50 7.1 Case study: Google ...................................................................................................50 7.1.1 Company background................................................................................................ 51 7.1.2 The challenge ............................................................................................................ 52 7.1.3 Solving the problem .................................................................................................. 54 7.1.4 Steps towards google.cn ........................................................................................... 58
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