Last month, social media giant Facebook acquired messaging service WhatsApp for $19 billion, reportedly to help the social media company buttress its presence overseas. Unfortunately for Facebook, that's going to be an uphill climb in many markets--perhaps none more so than China.
Despite its buzz and price tag, WhatsApp isn't even on the radar in social media-obsessed China. To establish a toehold in the country, Facebook and other Western social media companies will have to cut into the share of social media platforms like messaging app WeChat and microblogging site Weibo that most Americans have never heard of, but that have millions of users.
Clearly the opportunities for social media businesses are vast. But to have any hope of succeeding on social in China, companies will need to understand the unique cultural and demographic influences within the country's borders, and contend with the role the Chinese government plays in citizens' Internet consumption.
The Internet and Social Media Landscape in China
In January, the China Internet Network Information Center, the administrative agency responsible for Internet affairs in China, issued a report saying that the country has nearly 618 million Internet users. That's almost twice the population of the United States, yet represents only 45 percent penetration of the Chinese market, according to the CINIC. The majority of Internet users in China access the Web by mobile devices--another reason why so many companies are dying to get into the Chinese market.
At Social Media Week in New York City last month, Yuanbo Liu, an account executive at content marketing platform Percolate and a Chinese native, discussed the ways Chinese spend their time online.
"The products [Chinese] companies create are unique. They are not the same as what we have produced in America," she said. "Look at Instagram. It is so simple. You take a picture and you share it," Liu says. "You are rarely going to find a product that is so simple and singularly focused [in China]."
Liu says Chinese businesses take a "Swiss-army knife approach" to social. She stressed that there is a lot of overlap between different platforms and that they typically have a handful of different functionalities. A messaging service, for example, might also incorporate dating services and social sharing.
A Mirror of Traditional Culture
In her presentation, Liu also outlined a handful of ways social media reflects traditional Chinese culture. In China, she says, young men and women receive a great deal of pressure from their families to get married, which opens up markets on the Internet and social media. Dating services are a common feature of social media apps in China; for instance, on e-commerce platform Taobao.com, young women can rent boyfriends to take home to their families.
The marital pressure in China is so intense that it has even spawned a national holiday. November 11 marks "Singles' Day" (11/11--four singles), on which the unattached go online and buy gifts for themselves. Last year on Singles' Day, Taobao and Tmall--the two main platforms belonging to Alibaba, the largest e-commerce site in China--hit the equivalent of $5.75 billion in sales, Bloomberg reports. That's almost three times what U.S. merchants generated on Cyber Monday last year.
Another important aspect of Chinese culture that is reflected in social media is gift giving, Liu says. One virtual gift-giving site, YY, started in 2005 as a website for gamers looking to communicate with each other, but it has since evolved into a music platform with live video of users singing. Other users can chat with performers and give them virtual gifts that cost users real money. Performers can then redeem their gifts for cash, sharing a portion of the revenue with YY. A virtual Lamborghini can be redeemed for about $400, The New Yorker reports.
The Role of Censorship
Microblogs, too, are a huge part of the social media landscape in China. With major social media players such as Twitter and Facebook blocked by the government, Chinese microblogs like Sina Weibo became the main outlets for people to share (some of) their opinions. Launched in 2009, the Twitter-like Weibo allows users to post brief messages to followers who can then comment on or share the posts. As the Journal describes it, after its launch Weibo "became a sort of virtual town square where Chinese could discuss anything from pop stars to corrupt politicians."
According to a report from Harvard University, 13 percent of all social media posts in China are censored by the government. Weibo has not been immune. With such a large user base and public format, the microblog has come under increased government scrutiny, which has encouraged many Chinese people to switch to rival WeChat.
Ironically, WeChat is owned by Tencent, an Internet conglomerate that The Economist reports has deep ties with the Chinese government and the Communist Party. But WeChat works similarly to the buzzworthy WhatsApp; people usually only can see posts from accounts they subscribe to, whereas on Weibo, any posts written are public and thus can spread very quickly. Because information spreads more slowly on WeChat, the platform has arguably been less of a censorship target.
While social media "is traversing national boundaries throughout the world [and] allowing the international community to grow closer, the opposite is occurring in China," says Chris Mlynarski, an American who works in Beijing as the director of finance and administration at PlaNet Finance China, a nonprofit social and economic development company. "Applications like WeChat and Weibo are creating a dense web of communication channels within China, but accessing the international community via social platforms is still difficult for the average Chinese 'netizen.'"
Government initiatives such as the Great Firewall keep out foreign websites including YouTube, Facebook and Twitter, while the Golden Shield keeps an eye on Internet activity within China, according The Economist. Describing the Chinese Internet as "a giant cage," the publication explains just how the government censors the Internet in China:
"Sometimes the authorities' efforts at controlling it are absurd, even ridiculous, but the joke is on the users. Government agencies across the country have invested heavily in software to track and analyze online behavior, both to gauge public opinion and to contain threats before they spread, and the authorities deal ruthlessly with those who break the rules."
Interestingly, U.S.-based professional networking platform LinkedIn launched a Chinese-language website last week. The company has applied for a license to operate in China, but is waiting for approval, the Journal reports. LinkedIn CEO Jeff Weiner tells the newspaper that the company expects the Chinese government will request that the network filter some of its content if it grants approval.
It's Not One Size Fits All
Even if companies are able to overcome the censorship hurdles and begin to understand the Chinese culture, success in one part of China doesn't equal success throughout the country. Liu stresses the vastness of the Chinese market and the fact that cultures vary based on location and demographics. She says there are different tiers of cities, loosely based on size and socioeconomics, which influence individuals' interests and consumption habits.
"It is not just 1.3 billion people who share one language, one culture. That's just not true. It is much more nuanced than that," Liu says. "When you look to understand China, in order to really grasp how or why China is different, you have to go through the cultural underpinnings of each specific audience."