Sina Weibo took advantage of a social media vacuum to become the top micro-blogging service in China
Ye Fangzhao, a 25-year-old freelance brochure editor for auto companies, abandoned Twitter a year ago to start using Sina Weibo, China's homegrown equivalent. Now he's on the micro-blogging service 10 hours a day, using it to connect with motoring experts and keep up on trends. "I don't need to go to bookstores or buy magazines," says Ye, who lives in Xiamen, on China's east coast. "It saves me time and money."
Sina Weibo has become China's leading site for micro-blogging, the Twitter-inspired phenomenon focused on extremely short messages. The site is responsible for 87 percent of the time spent on micro-blogging services in China, says Eric Wen, an analyst at Mirae Asset Securities in Hong Kong.
In the lead-up to the 20th anniversary of the Tiananmen Square protests in June 2009, the Chinese government blocked Twitter. Shortly after, during ethnic riots in Xinjiang, Facebook went dark, too. The ensuing social media vacuum left an opening for Sina Weibo, which appeared in August of that year. Rivals such as Tencent, Sohu, and NetEase (NTES) didn't begin rolling out their own micro-blogging services until early 2010. That gave Sina Weibo a head start, and it is now a top information source for many Chinese—and often an outlet for the controversial topics avoided by state-controlled media.
Weibo is a division of Sina Corp. (SINA), which operates China's third-most-visited website. Sina's shares, traded in the U.S. on the Nasdaq exchange, have almost tripled in price since Weibo's launch, and the company has a $5.7 billion market capitalization. Although Weibo does not yet make money, it is at the forefront of Sina Chief Executive Officer Charles Chao's effort to turn the company's sites into the premier destination for China's 450 million Internet users. He hopes Weibo's popularity will help Sina evolve from a Yahoo! -like portal that creates content internally to a Facebook-like site that attracts outside developers. "Our strategy is to build a platform that is open to everybody," he says.
Weibo mimics the format of Silicon Valley's micro-blogging pioneer. "We learned much from Twitter," says Chao. Weibo limits posts to 140 characters—though in Chinese, in which many words are just two or three characters, a lot more can be expressed under that constraint than in English. Weibo users follow and comment on updates from other members and can post photos and videos.
Celebrities are a big part of Weibo's appeal. The most popular accounts belong to entertainers such as actress Yao Chen, who has 5 million-plus followers. Just as "tweet" has become a verb in English, "zhi weibo"—literally "to knit a scarf"—has entered the lexicon in China. ("Weibo" means "micro-blog" but sounds like Mandarin for scarf.)
Like other Internet services in China, Weibo deletes or limits sensitive posts as required by the government. Nicholas Kristof, the New York Times columnist who often writes about human-rights issues in China and elsewhere, opened an account late last year. Kristof, who can write in Chinese, says censors deleted his account after five posts, one of which mentioned the 1989 Tiananmen Square crackdown. During the recent anti-Mubarak protests in Cairo, a search for "Egypt" returned only an explanation that legal restrictions prevented Weibo from displaying the results.
Despite censorship, Weibo is "by far the best platform for free speech" in China, says Lee Kai-fu, Google's former China head and one of Sina Weibo's most popular users. Although the search term for Egypt was restricted, many Weibo posts mentioned the protests, and at least one account offered a live webcast from Tahrir Square.
Weibo users generally have the freedom to speculate about stories censored by the mainstream media. In December a village leader in the eastern coastal town of Yueqing was hit by a truck and killed. Users openly speculated that he had been murdered for speaking out against higher officials in a land dispute. Bill Bishop, an independent media analyst in Beijing, says Weibo poses challenges for censors yet provides a "real-time stream to all sorts of stuff going on around the country, and what people are thinking."
Weibo hasn't released user figures since October, when it had 50 million members, but analysts at investment firm Susequehanna International predict it will have 120 million members by 2012. Twitter had 175 million as of September. Says Ma Yuan, an analyst with investment bank Bocom International Holdings in Beijing: Weibo "is becoming the next killer application on the Internet and mobile phones."
The bottom line: Sina's CEO says micro-blogging service Weibo is key to the company's goal of becoming a dominant Internet platform.
COMMENTARY: In China, Renren and Sina Weibo are dominant players in the social network market. They can be seen as the “Facebook” and “Twitter” of China as each network currently has 160 million and 50 million registered users, respectively.
More to comes as eMarketer forecast that China will have 265 million social network users by the end of this year. The total number social network users is also estimated to hit 488 million by 2015. A user is counted as one who uses social network service at least once a month.
“As penetration approaches saturation, users are adopting activities that mirror the West but remain distinctly Chinese,” said Mike Froggatt, eMarketer research analyst and author of the new report “China Social Media Marketing.” “They have innovated in categories as diverse as online entertainment, group buying and social media.”
“Although social networks in China will increase reach, sites often have very specific audiences,” said Froggatt. “Choosing how and where to target these audiences can determine whether social media campaigns are successful or flop.”
With the ongoing fight for dominance, China’s social network market look fragmented now. But it could be worst by 2015, at least in my opinion. Four years from now, it remains to be seen if Renren and Sina Weibo are still the dominant players. Chinese users are adopting English-based social networks like Facebook and Twitter as they feel the need to stay connected with the world.
That means U.S based sites could still stand a chance to gain pieces of the Chinese market. If both companies successfully entered China, it would cause further fragmentation as users are spread among different social networks. Marketers would then have to understand and manage dozens of social networks to better target consumers. Of course, there is also a possibility that that more social network services would spring up in the near future. It’s a huge but complicated market, isn’t it?
Imitation is the greatest form of flattery. What more can you say. By the way, Twitter, Facebook and now LinkedIn have been blocked in China. What a difference 10,000 miles makes.
Courtesy of an article dated February 17, 2011 appearing in Bloomberg Businessweek