If the rumors are true, Facebook is planning to enter China's social-media market through a partnership with the local search giant Baidu.
Facebook will face strong local competition and the same regulatory and political pressures that defeated other Western internet giants like Google, Yahoo, eBay, Amazon and Twitter, according to industry experts who appeared on this week's episode of Thoughtful China, a video program produced in Shanghai.
Sam Flemming, founder and chairman of CIC said.
"China already has social-media properties providing value in a very fragmented social media landscape, so I'm just not sure what compelling value Facebook can provide in a meaningful way. To become literally the Facebook of China is not going to be easy in a market that's already very social."
In addition, Facebook may have waited too long, warned James Lee, a global media analyst at CLSA.
"When you have a hyper-competitive space, you need to be there on day one."
China's appeal is understandable. The country is home to the world's largest internet market and it has a vibrant social-media scene, with successful social-media sites such as:
- Tencent QQ IM
- Sina Weibo.
Chinese media analysts also question whether Facebook has picked the best suitor in Baidu.
T.R. Harrington, founder and CEO of Shanghai-based Darwin Marketing and a search-marketing specialist says Baidu is not necessarily the best choice for Facebook to enter the Chinese market, because it takes established social networking partners that understand China's social-media market.
"There is a natural relationship between search and social. It would make a lot more sense to work with someone like Sina's Weibo [or] Tencent."
Thoughtful China is produced by Normandy Madden, senior VP-content development, Asia/Pacific, at Thoughtful Media Group and Ad Age's former Asia editor. See earlier episodes of Thoughtful China here.
COMMENTARY: I've been covering China's social networking scene in numerous posts (January 17, 2011, February 12, 2011, February 16, 2011, February 28, 2011, April 11, 2011, June 12, 2011, June 13, 2011, June 20, 2011, and June 27, 2011) for some time now, and the market has grabbed my interest due to its diversity, immensity and competitiveness of the market.
In the U.S. Facebook, Twitter and Zynga are the clear dominant leaders in social networking, microblogging and social gaming respectively. In China, there is generally one dominant player and two major followers within each category of China's social media ecosystem as you can see from the following graphic.
According to eMarketer, social network users in China will more than double in number, from 207 million in 2010 to 488 million in 2015.
Individuals in China use social networks to communicate with family, friends, brands and the government. Several studies show they enthusiastically follow brand and product websites, forums and social network sites, often promoting favorite products to their numerous online connections.
The increased use of social media presents nearly limitless opportunity for brands to engage consumers. However, social media marketing is a tool to get a foot in the door. Aspiration can be a strong motivator for purchases, and brands can benefit from the increased prestige perceived by social media users in China.
All together there are probably close to 1,500 social networks of all types in China. Groupon alone has over 1,000 copycats and is having a hell of a time penetrating that Chinese market.
Here's a list of China's Top 15 Social Networks:
China Resonance, a leading Chinese social media agency prepared a brief profile of the Top Social Networks in China.
Endelman Digital prepared the following Infographic that maps out the social media habits of internet users all across Asia. It's not difficult to see why Asia, and China specifically, are such an attractive social media markets.
[Click The Above Image to Enlarge]
Facebook continues to dominate the Asia with a strong presence in 9 out of the 13 countries featured in the infographic map, while in countries like China, South Korea and Taiwan, it’s dominated by a local social networking service. It can also be concluded that video viewing eats up the majority of Asia’s time online, while blogging falls a close second in most countries.
Penn-Olson points out that the data used by ComScore only represents PC-based internet users, but this leaves out a very substantial chunk of Asians staring at the internet through their phone or at an internet cafe.
This explains the low percentage of social network usage in China as one of its top Social Networks, Sina Weibo, is said to be accessed via mobile by 50% of its users.
Despite this flaw, the Infographic still proves to be a pretty good overview of social media activity in the region.
The Chinese government views social networks with suspicion because they could be use to criticize and fument resistance against China's entrenched Communist leadership. Microblogging sites, even though they are faring well so far in allowing freer discussion, remain hot targets for Chinese government censorship because of the ‘citizen journalism’ aspect of them. And it looks like if Sina Weibo wants to go global, they’ll still have to comply with Chinese Internet regulations, which may put a slight damper on the efforts. Let’s have a look at some facts about Internet censorship in China:
- The Chinese government began a project known as “The Golden Shield Project” in 1998; today, that project employs approximately 30-50,000 “police” who monitor blogs, chat forums, and even email — these individuals also ‘guide’ conversations online.
- In 2003, as part of “The Golden Shield Project,” The Great Firewall of China was launched and began blocking web sites on an array of sensitive topics and heavily restricting access to content from many others, like Flickr, Wikipedia, Google, and of course Twitter, which along with Facebook was blocked in China in 2009. Want to try it out? Check out this neat resource, greatfirewallofchina.org, and see if your favorite website is accessible in mainland China. As of the writing of this article, SourceCon.com is free & clear!
China is unknown territory for Facebook, and Chinese social networkers are "fully vested", having settled on one or two favorite social networks, so Facebook will have a huge problem convincing them to switch from their existing social network to Facebook China, or whatever it will be called.
If Facebook partners with Baidu, as has been frequently rumored, it is going to face huge obstacles penetrating the Chinese social networking market because of differences in culture, the diversity and large numbers of competitors, and you can bet that it will be a huge target of China's "censorship police." A great example of just how extreme China's censorship efforts can be is the experience of Google, who was eventually banned and left China in disgrace, and even to this day, is the target of numerous cyber attacks.