Weibo – the next big thing?
It has been said that Weibo can be the next oyster of social networking. But is it, really?
As much as micro-blogging has increased significantly, Weibo - being the Chinese version to Twitter, is thought to be the world's biggest thing. But how realistic could these words be.
To a recent article published on techrice.com, it was said that Weibo could become universal as it works well with the government. How can a social network which has been developed in China become the "world's oyster" when no news about China can even make it worldwide?
By micro-blogging, it is normally making an opinion about something or just doing a random post. Weibo works well for the political faces. When a person writes a micro blog, the location and time is noted. It also allows the government to see the opinions of fellow Chinese netizens.
Twitter which has global interactions, freedom to cast your own thoughts that is on your mind; and not having to worry that what you are saying is being capped, deleted or even censored because it is considered too expressive. Sina's Weibo is the complete opposite. It would probably be hard for users outside China to accept this micro-blog based on the likelihood that all the things you post would be keenly monitored.
“Groupon fatigue” in China
Gaopeng.com, the joint venture from Tencent and Groupon, which offers group buying deals to Chinese consumers, has officially opened on March 16, 2011, as part of the company's push to break into China's group buying market. Although numerous group-buying websites are already running in China, Daily-deals website Groupon still launched in China, bringing its popular brand of Internet retail to the world's most populous nation. In 2009 Groupon was a virtual nobody, limited to just 30 American cities. By the end of 2010, it had become a global success, with more than 4,000 staffs, 51 million subscribers in 565 cities worldwide and $760 million in revenues.
Despite the fact that the group-buying deals market is thriving in China, some companies criticize that the deals only attract mainly bargain-hunters who do not spend more than the coupon’s face value and do not become repeated customers. Moreover, studies have repeatedly shown that price discounts undermine brand value. They may be good for giving businesses some exposure but the benefit of this is likely to fade away after implementing a few promotions like this.
Obviously, it cannot rely on the “network effects” that have given companies such as Facebook and eBay, an almost overwhelming lead. Nevertheless there is one major niche for Groupon, that is being the dominant brand in the market, which is certainly an advantage: a long mailing list attracts better business owners, which pull in more consumers.
With its powerful momentum, strong management and strengthful financial support, the firm certainly has a chance of becoming the dominant platform for local service businesses to stimulate the money flows, much as Amazon has come to dominate online shopping for all sorts of physical goods. Even If so, daily deals will probably be j
ust one of Groupon’s offerings.
However, Groupon’s aggressive expansion into China is seriously intriguing its Chinese clones, the local group buying sites such as Lashou, Manzuo and Ftuan. The barriers to entering the daily-deals market are low and the network effects weak. Those companies are already working the market and are supposedly setting up an anti-Groupon union, banning Gaopeng.com employees from working with the Chinese sites ever again.
The biggest worry regarding Groupon is that it’s almost entirely run by foreigners. According to the Economists, “this is just another botched joint venture and another arrogant US Internet company swaggering into China, thinking its brand name and wads of cash will bridge cultural gaps.” Even one report detailing Groupon’s effort said that the operation was chaotic, and, probably most importantly, not run by the Chinese. Tencent, China’s largest Internet company, is also rumored to be thinking about launching a group buying service of its own.
Nevertheless, some do believe that Groupon can succeed where many others, like eBay, have failed. First of all, group buying is already a familiar concept in China, so it should be easier for Groupon to make its attack into a market where it doesn’t have to start from the beginning. Secondly, Tencent and Yunfeng Capital (founded by China’s leading e-commerce site Alibaba’s chairman Jack Ma) are excellent partners for Groupon.
After all, just like the Hong Kong-based Samsung Securities analyst Paul Wuh said, “Discounts will always be popular but the question is, will Groupon be more popular than the other websites.” Will Groupon once again dominate in this populous country, or it’s just like throwing a stone into the ocean, which only creates the minute ripple, we’ll see.
Marketing trends for 2011
The concept is no longer new but is still what any advertiser must face. The most difficult part about digital marketing is how to thrive in the digital arena. How to use the right channel at the right time with the right performance and achieve the right result? To develop a clear map for integrated digital planning, it is important to know the competitive advantages and opportunities of each digital solution.
The upcoming digital trends for 2011 are social marketing, content marketing, mobile marketing, accountability, and integration on which all advertisers, agencies and media owners will be focused.
Microblogging is rapidly getting more and more popular in China. The numbers of microblog users at the end of 2010 (more than 50million) made the microblogs role move from “new media” to “hot media” making the competition harder and harder between Sina, Netease, Sohu and Tencent. The key for the success of microblogging is to lure the maximum number of users finding the best bait like Kai-Fu Lee, the founding President of Google China.
Once everybody joined, content marketing should be the center of attention for all advertisers. This can be divided into 2 kinds: Sponsoring (exposure through big events), and Product Placement (displaying brands into movies, TV shows…). Content has to be interesting enough to make people think “It would be nice if I had that”.
Mobile Marketing is the real upcoming way of advertising for this year. The biggest challenge is definitely to be able to follow the fast upgrading of new technologies. Local-based service (LBS) and augmented reality (AR) are the latest trends for marketers. Another facet of mobile marketing to take into account is the growing numbers of Smartphone users (iPhone; Android). This raises several questions about mobile marketing. The dilemma of making apps, how to manage and update content, use of LBS, method to make AR fancier and response to a personal and highly-customized media.
How can we measure Internet advertising efficiency? Miniblog popularity is not only determined by the number of users. Are SOV and GRP applicable to Internet advertising? What is more important between interactivity and number? These are the challenging questions for accountability in 2011.
Many companies like CBN Weekly, The Bund or Modern Weekly already have their iPad website version, so shall we adapt advertising being digital or stay traditional? Combination is easy but the problem is still how to deliver innovative ideas based on the technologies control the results.
QIYI: Ranked as Champion in the Online Video Industry in 8 Months
Hulu investor Providence Equity Partners pumped US$50 million into a new online video company QIYI set up by Chinese Internet search giant Baidu. It is founded on April 22, 2010, roughly 7 weeks after Baidu confirmed plans to establish a new independent company to provide licensed, advertising-supported online video content to Chinese Internet users.
Qiyi's CEO - Gong Yu
Under the premise of orientating correct public opinions and strictly executing the government policy and regulation, QIYI provides diversified licensed video content and launched various channels for hit TV shows, movies, documentaries, cartoons, music, variety shows, etc., to fulfill the increasing needs from the users and to enrich customers’ cultural life. Its slogan is “Always Fun, Always Fine”. QIYI has built up the leading differentiated technical advantages in terms of "fluency, clarity and friendly interface" based upon the strong comprehensive technology capabilities.
In accordance with the statistics of Millward Brown, an internationally renowned third party data establishment, users of QIYI.com amounted to over 90 million during October 2010. In addition, QIYI.com has broken a significant video length record: the video length per capita each day reached 114.7 minutes, referring to that each user would watch a movie each day, which has been ranked as champion in the online video industry. So here is the question, why is QIYI.com so successful in such a short time?
As a Baidu established Internet video service company, QIYI has emerged as one of the top Internet video companies in China. Relying on a search giant and with the help of its strong customer base, QIYI’ online video road is easier to take. Moreover, in 2010 QIYI saw strong video business growth. Although QIYI entered the online video market later than Youku and Tudou, QIYI focuses on long videos without short ones. It is clear that long videos attract more ads because of its better publicizing.
"QIYI's mission is to provide free high-quality video services for Internet users, and offer the high-quality, cost-effective Internet marketing platform for advertisers. The beta period is set to achieve its mission so as to enhance the user experience as its first principle of development," Gong Yu, CEO of QIYI said.
The Battle of China’s Micro Blogging Market
With Twitter being blocked from Mainland China in 2009, there have been a number of similar services arising in the Chinese micro blogging market. However, there are two micro blog sites that have distinguished themselves from the masses of Twitter replicas – Sina Weibo and Tencent Weibo.
Sina Weibo was launched in August 2009, and has seen a rapid growth of their user base. Sina Weibo CEO, Charles Chao, recently said that he predicted to have 150 million users under their Weibo service within the end of 2011.
As of February 2011, Tencent Weibo is the micro blogging leader in China. With currently more than 100 million users, Tencent is reigning at the top. However, where Tencent has the greatest user base, Sina’s users are more active than their counterpart and they are also growing at high rate. According to the Chinese sharing tool JiaThis’ December 2010 statistics, Sina users shared 6 times the amount of links that the users at Tencent did.
Earlier this week, Sina Weibo launched two new services: 1) Voicemail Weibo, where users can dial a service number to record a voice message, which will be uploaded and shared on their respective Weibo accounts; and 2) Direct Video Upload, a service that give users the freedom of uploading up to 200mb videos to their posts. It is worth noting that Sina also went into collaboration with China’s number 1 video site, Youku, in November 2009, making it even easier for their users to embed video.
On top of the newly launched functions, Sina Weibo already offers their users threaded comments, social groups, and photo sharing, making Sina Weibo, for many a more attractive choice over the more traditional (and slightly more Twitter-like) Tencent Weibo.
Sina’s offensive against Tencent Weibo does not show any signs of slowing down. In November 2010, Sina CEO Charles Chao announced a fund for their Weibo developers worth RMB 200 million, which makes it very likely that innovative functions will keep on coming.
The combination of a growing number of peers to connect to, along with numerous innovative functions, put Sina Weibo in a highly inviting spotlight to China’s 420 million Internet users, which is something that should be of distinct interest to relevant social media marketers.
As Sina’s innovation continues, it will definitely be interesting to see how Tencent will counteract. Considering that Tencent holds about 640 million active users on their QQ Messenger service, they have a massive potential user group that somehow can be induced into using Tencent Weibo. As a substantial number of Sina Weibo’s users have a QQ account, it goes without saying that Tencent has a favorable upper hand seeing that they have the chance offer two highly regarded services in one – Tencent Weibo meets Tencent QQ.
In order to win users from the one or the other micro blogger communities in China, it is suggested that a likely first step is to reach out to Chinese celebrities. Global news agency Reuters has observed an interesting trend amongst the Chinese micro bloggers. Reuters states that the micro bloggers not only use the sites to express their personal thoughts and opinions, but also to a great extent to follow their favorite celebrities’ everyday life.
Studies have shown that there is a high degree of celebrity addiction in today’s community and that celebrities’ impact on fans’ followers’ behavior, even if it means switching Weibos. If Tencent and Sina can convince celebrities, relevant to their respective users, to exercise their micro blogging one of the sites, it is certain that significant crowds will follow.
As of now, it is uncertain what road Tencent and Sina’s Weibos will take. Will they in the future still be fierce competitors? Or will they go separate ways and offer China’s vast number of Internet users two differentiating products? As always, time will tell.
Licensed media entertainment content makes its way into China
In the past year, two of China’s big players in the digital media market, Youku and Baidu, have moved into offering licensed and/or pay-per-view content to its users. With few physical distribution options available in the Chinese market, offering online entertainment content, with the consent from U.S. media producers and the Chinese government, opens a new and exciting distribution channel of U.S. media content in China.
Youku, which offers its users to upload videos without any time limits, has since their earlier days seen pirated TV shows and movies being uploaded to their servers. In order to better their reputation amongst advertisers, both in China and worldwide, Youku announced their new and improved fingerprinting technology, a technology that scans through all uploaded material in their video library, and automatically delete content that are subject to copyright infringements. With implementing this technology in January 2010, Youku saw a decrease in abroad copyright infringement lawsuits and a reputation that made its way up the ladder.
Last month, Youku made a second major strike against pirated material on its website. Teaming up with U.S. media giant Warner Bros., Youku are now offering top quality U.S. movies and TV shows for a price which is next to nothing. As a result of the recent partnership, users of Youku.com can today stream content, such as the recent worldwide blockbuster “Inception”, in high resolution for only RMB 5 and older library selections
for RMB 3.
Early in 2010, the Chinese search engine Baidu joined forces with U.S. private-equity firm Providence Equity Partners LLC to create Qiyi.com, a advertisement-supported website where users can view licensed media content, very similar to the U.S. service Hulu.com. Qiyi’s CEO, Gong Yu, states that “the site will spend over RMB 200 million toward content procurement”, which means that Qiyi’s users will most likely have plenty of high quality content to choose from.
The online video market saw a 95 per cent increase in its total revenues from 2008 to 2009, so it is safe to say that offering licensed online media content to a dynamic market segment, such as China’s Y and Z generations, is likely to be a recipe for success.
But how to market the fast moving generations of Y’s and Z’s effectively can be a fairly difficult challenge. As there are several websites that offer the same amount of media content as Youku and Qiyi for free and without advertisements, even though it is pirated, the majority of users tend to move towards the cheaper option. The current and future licensed media content sites would therefore need to find a way to motivate their users to use their media services over the less legal ones. Could offering a reasonable priced subscription service on their media content be an attractive solution?
DeNA to Enter the Chinese Mobile Gaming Market
A leading mobile phone gaming company, DeNA, a Japanese firm, has made plans to enter the Chinese mobile gaming market in late February. CEO Wang Yong and the CEO of previous tx.com.cn also announced DeNA's acquisition of tx.com.cn in August 2009 and the reason for renaming DeNA to DeNA China Network Technology Company. This Chinese branch of DeNA will be responsible for the implementation and operation of a new gaming application software platform which will be delivered in China.
The new platform will allow Chinese game developers to put their products on DeNA’s platform where consumers can purchase and download the games from all around the world. They have also already secured agreements with around 20 to 30 game developers to produce content for the platform. The agreement between the company and the developers gives developers 70% of the payment from consumers while DeNA is set to receive 30%.
DeNA is the largest mobile phone gaming application platform in Japan with over 20 million registered users and more than 200 third party games. The platform is one of the company’s major business sections and they released a report last August detailing the company's increase in operating revenues by 175% and operating profits by 282%, so are expecting similar success from the Chinese market. With statistics outlying Chinese Internet users obsession with gaming, with almost twice as much Internet use for gaming compared to the US, DeNA's plans seem entirely reasonable.
Pengyou.com – Tencent’s new open platform social network.
In Chinese ‘pengyou’ means ‘friend’, but is now also Tencent's most recent approach to their famous QQ service. For many Chinese web users a QQ number is just as important as their phone number. The connections users make through their virtual accounts are however all a bit disjointed; QQ chat and QZone look almost similar to what Microsoft has done previously with Msn and Msn Spaces, which didn’t eventuate with very good results.
QZone, the massive social network has over 430 million users, however the issue lies in that the connections users make on QZone are purely virtual and often built amongst strangers. Based on the fact that QZone doesn’t rely on users using a real name to register differentiates the site from other social networks such as RenRen and Kaixin001, and in fact may be a disadvantage. However Tencent does not want to give up the social network race and launched Pengyou.qq.com in July 2010 before officially launching the site and moving it to Pengyou.com in late December. The site utilises real names with an emphasis on real friendships, and allows users to register with any valid email address rather than just a QQ ID.
The site has both a social area but also a section for corporate outreach, where friends can become ‘fans’ of various companies, and companies can utilise the site to engage with their consumers. In mid December, it released an open API and just two weeks after, announced its open platform, which already claims over 50 applications from third parties. Although the site is still in beta there are a number of other small and surprising features which we can expect to see come to light in the near future. Some of these include Facebook authentication, integrated sharing across the Chinese internet using ‘Share on QQ’ and ‘Share on Pengyou’ buttons and integrated Pengyou and QQ chat features.
QQ’s next big move to compete in the SNS race seems to simply be composed of an imitation of Facebook and not a big step in any direction in terms of design and functionality, though Tencent has definitely broadened its horizons slightly, becoming more open and friendly, with the allowance of any email sign up and its open API and platform.
Shanzai in China
With the rapid growth of Chinas economy, a new phenomenon has erupted which the Chinese call ‘shanzhai’. The word ‘shanzai’ means fake product, and although these products are fake versions of many western products many Chinese still consider them better than the original goods. The reason so many Chinese prefer these fake products is because they are significantly cheaper. Imitation products such as the ePhone, are almost identical, but have slightly less functionality, and at such a low price have become a great option for many low income Chinese.
Improving on existing technology, rather than simply imitating it, is also becoming an increasingly viable option in China, it is legal and inexpensive. An iPhone 4 can be modified easily to include a dual sim card reader which when covered keeps the exact same appearance as the original iPhone. Another example is the t-phone, which can be used to modify the iTouch to include voice calling and SMS, leaving the customer with something exactly like an iPhone 4, only cheaper. Apple has not commented on these ‘shanzhai’ products, but from the point of the sales people and the Chinese government it is perfectly legal unless Apple decides to take the individual companies to court. Apple product warranties are even delivered with these modified products.
According to a professor at the Chinese Academy of Science, shanzhai products are the beginning of an important innovation process that should be encouraged and nurtured, leading on to the next stage of innovation to eventually lead to truly innovative products, and companies. This shanzhai market already holds 20% of electronics sales in China and is expected to continually increase.
The Chinese industry has previously focused on imitating and copying western products but has now moved forwarding to innovating and creating add-on technology, with the ability to license it under third party branding. From an experts perspective Chin is still focusing on developmental technology rather than fundamental technology. Currently this industry is 50% dependent on western technologies, though is expected to decrease to 30% as Chinese innovative technologies continue to grow and improve.
China Mode 001
ChinaMode001, is an open competition for China's online community to vote on today’s current web innovations and services. Voters can nominate winners in a variety of categories, such as innovation in consumer applications, entertainment, work management, mobile applications, user communities and the most innovative company of the year. The competition was set up by a number of technology insiders themselves to encourage start up businesses to focus on creating innovative applications to facilitate entrepreneurial values in the ever-changing and competitive, complex industry.
The competition has a series of stages, with an audition round where the general public can nominate a candidate in each section. After votes from China's web community come in, a panel of experts selects the finalists for the second round of public voting. This year experts include a number of top business people, journalists, academics and bloggers from various industries like venture capital, advertising and research and development. The second round of voting began on the 13th of December and lasts for two weeks until the 27th. Winners are then announced on January 24th so it’s time to get voting now. Several seminars will also take place to discuss several important issues in digital space from social gaming, social media and new technologies and trends.
The competition is a great way to get a feel for Chinese internet user’s preferences, what is currently popular and who are the people businesses and internet users need to pay attention too and look out for. It is also a great way for businesses to identify news ways to connect with users and discover new media channels that can be used to engage with customers. It also provides a good reflection of what is currently working in the industry, what isn’t and what direction the industry is heading in. The section on foreign applications also gives a good indicator on what external services appeal to the Chinese market and what the Chinese web is missing out on.
ChinaMode001 is excellent ways to showcase the talent of China's online environment as well explore the industry further. Check out the list of companies up for nomination here, and don’t forget to vote.
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