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From Weibo to TencentBuddies and Renren, A Tour of the Social Media Market in China

This piece originally appeared at Harbus, the independent newspaper of the Harvard Business School.

Facebook and Twitter have been blocked in China since July 2009, after a riot in the Xinjiang province, to prevent coordination among protesters. Government officials have not said when the services will be restored. With the absence of the global social network giants, the China social network market is still highly competitive among domestic players, with no clear winner yet.

A recent UBS report issued in Oct 2011 said that “given China’s demographic diversity and low population mobility, no ‘winner takes all’ will happen soon. SinaWeibo will remain popular in top tier cities among white collars, Tencent’s platform will continue to dominate lower tier cities, and Renren will continue to attract students.”

Here is a brief introduction to each of China's largest social websites:

SinaWeibo (translates to “microblog”) is the equivalent of Twitter in China. Weibo builds strong connections between users and high quality content. Hence, sometimes people categorize SinaWeibo more as a social media site instead of a social networking site. Users on Weibo mostly follow celebrities and opinion leaders in certain sectors. Due to unprecedented celebrity and opinion leader aggregation on Weibo, Weibo achieved 87% of market share in terms of user time in the microblog segment in China in slightly more than one year.

There is more freedom of speech on Weibo than most Westerners imagine.  After a major train collision in Wenzhou, China in July 2011, outraged people shared their criticisms on Weibo. Some Weibo users wrote sentences like, “When a country is corrupt to the point that a single lightning strike can cause a train crash, the passing of a truck can collapse a bridge, and drinking a few bags of milk powder can cause kidney stones, none of us are exempted.”

Another poem posted on Weibo made it to the front page of New York Times on July 24, 2011. The poem said, “China, please stop your flying pace, wait for your people, wait for your soul, wait for your morality, wait for your conscience! Don’t let the train run out off track, don’t let the bridges collapse, don’t let the roads become traps, don’t let houses become ruins. Walk slowly, allowing every life to have freedom and dignity. No one should be left behind by our era.”

An Economist article in July 2011 gave a good analysis of the Chinese government’s intention behind allowing Weibo to exist: “Weibo allows citizens to vent their grievances and give prompt warning if, say, corruption in a provincial city is getting out of hand.” Not surprisingly, despite the freedom given on Weibo, the site still works closely with the regulators. Weibo is capable of quickly stopping certain users from logging on and blocking posts containing certain terms.

Weibo

TencentBuddies is a social network from Tencent, the largest internet company in China in terms of active registered users. Tencent is the third-largest social network worldwide by number of active users, just after Facebook and Skype. TencentBuddies quickly grabbed 100 million users in 100 days after it was launched in January 2011. The quick ramp up was due to the 670 million registered users it had on its existing instant messenger called QQ.

QQ

Renren, the largest real name registered social networking site in China in 2010, went public on the NASDAQ in May 2011. The company was the successor of a site named Xiaonei (translates to “on campus," established in 2005). Like Facebook, users share self-made content or content from external links, albums, music and videos. Renren’s revenue is diversified, and includes display advertising, revenue share from 3rd party game developers, and commission from group purchasing and sales of virtual goods. 56 percent of revenue comes from online advertising, and 34 percent comes from online gaming.

As the name “Xiaonei” suggests, Renren’s target customers are campus students. However, Renren loses users when they start working. As the competition in social network intensifies, Renren is losing on-campus users to both Weibo and Tencent.

RenRen

Photo Credit: bfishadow

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