Tech Market WatchBy Perry Wu
The original rules drafted in 2004 to cover limits on unsolicited commercial email in China finally go into effect on March 30, 2006. Called "Draft Introduction of the ISC (Internet Society of China) Common Email Service Rules", they are similar to the CAN-Spam law in the United States that regulates the sending of email advertisements. These rules come only after international anti-spam groups like Spamhaus worked with Chinese groups like the Public Security Bureau, Ministry of Information Industry, and the Internet Society of China to find ways to stem the flow of spam in China. Finally.

For many email marketers, spammers, and database warehousing companies, this may prove to be the beginning of the end of their business in China. The new rules state that the Chinese word "guanggao" (advertisement) be displayed in the subject line of the emails so that users, servers, and web administrators can better filter and avoid the email advertisements. Since it's like wearing a sign around your neck saying "I Have Tuberculosis" at a kissing contest, it is understandable why companies like Doubleclick should be fretting the new rules.

Effectively, with this new Chinese anti-spam law, spammers "Can Spam" so long as they add a few characters to their subject lines. Even with a fine of as much as CNY30,000, spammers often lurk in remote servers that are difficult to track, so they will never be found and fined. Or they use malware to infect innocent computers to be the breeding ground for remote SMTP servers.

With the rise of instant messaging, wireless short messaging, and RSS, pundits have been preaching the end of email since at least 1997. But email is such a misunderstood service of the Internet and it will not die so easily.

I often like to tell the story where I was sitting at a luncheon in the Beijing Capital Club in 1999 and the two fellows on either side of me were from some sort of venture capital section of HSBC. The discussion at the table turned to email as a business model–free webmail, email newsletters, email list management, and email marketing–and one HSBC fellow turned to the other and said, "Email just seems to lack any sort of scalability." And then the other fellow responded, "Right, it seems to lack any sort of profitable future."

How much more incorrect could those lads be? Email is the cornerstone of business communication, and as mobile phones get better, email will be the mode–not SMS or MMS–that people will continue to communicate with each other via their phones (and then get mobile phone email spam…). Give it 5 years and come back to me and tell me I am right. Email newsletters and email list services are such integral parts of our Internet lives, we even forget how important they can be–and how profitable a legitimate business can become.

But unsolicited bulk email is a pain to all of us and does cause disruptions in normal email flow. In China, CNNIC statistics show that there are 1.6 email accounts per netizen and each account receives about 9.3 spam messages per week. I am sure the amount of spam received is dramatically higher, but with newer spam guards and better spam bins, much of the email spam gets trashed out of sight from most users.

If companies like Doubleclick are worried about the impact on their China business as more of their emails get trashed, they need not be. Why? Because smart email administrators have long been blocking emails from Doubleclick, FloNetworks, and MessageMedia by simply taking their DartMail email headers and adding them to their list of blocks in the server heuristics.

Doubleclick clients might wonder why they have poor deliverability, and it comes straight from the headers of the message they send out. There's not much rocket science to it, and the new Chinese anti-spam law won't change much in the business sector for companies who are being blocked on services like that already.

For companies that purely rely on databases to send out their messages in China, the law will hurt. These companies harvest or retain rights to email users and then sell those databases–or the rights to send messages to those databases–to advertisers.

Direct marketers who rely on these services have seen fewer responses per CPM over the years and are always looking for newer ways to get messages to users via email. However those companies that base their lists on their own web, email, or print publications should still have no problem sending in China, because those email subscribers are already their product subscribers. When sending email announcements to subscribers of a primary web or print publication, rather than merely to a database, you get better results–much to the chagrin of data mining companies.

Finally, here is a dirty little secret: email marketers can pay web portals like Sohu.com, Sina.com, Netease.com and others to send emails to their users. The cost is anywhere from 1 fen to 3 mao per user and it guarantees that the users will receive their messages. Sure, it does not guarantee that the user will open the email, but the user will at least have it in their inbox.

So in the end, even with this new law, Chinese email users are still available to advertisers who are willing to pay top dollar. And who says China doesn't have capitalism in its blood?

About the author:
Perry Wu is a writer and correspondent for ChinaTechNews.com and can be reached here at the site. Perry Wu does not hold any positions, long or short, on any of the Chinese or American company securities mentioned in this article.

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