By Zaheer Nooruddin (This post originally appeared on the B-M China Blog on May 5, 2011.)
I recently came across a report by a local tech analyst company in China, Red Tech Advisors, about the status and "future-value" prospects of China’s RenRen social networking platform.
Renren.com, as some of you will know, is one of China’s leading SNS sites, often (quite erroneously) referred to as "China's Facebook."
That is not to say that Renren was not once China's Facebook; it very arguably was. In its previous brand incarnation as Xiaonei (校内网), the on-campus social network, by which it gained its credentials, developed a robust feature-led platform, and its massive following of students from China's best universities and schools, Renren.com fast emerged as the leader of the SNS marketspace in China.
Its competition for the title of "King of Social Networks in China" at that time - not so long ago - mainly came from other stand-alone social networking sites like Kaixin001 and 51.com.
How the times have changed! As with Social Media everywhere, so is it in China. In a matter of just a few years (we're talking 2 or 3 years here), the social media and networking landscape has rapidly evolved. Gone are the days of "just a handful" of viable social networking platforms. In this time, new standalone rivals have emerged to make a play for various audiences and geographies in China, and old players such as Baidu, QZone and Sina, to name just a few (the big 3 Online News Portals - China's veritable Google, Yahoo! and AOL - to offer a loose comparison) have expanded their traditional online media plays with new media business models - models in which Social Networking is at the center of their user retention strategies.
These days Renren finds itself in the business news again, as the company looks to consolidate its market share with major new funding and gets to ready to launch its first IPO on the New York Stock Exchange during this month.
There is no doubt that, with all the hype around China as the world's largest internet market by far, with such dynamic prospects for growth in the Social Web and Media spaces, that Renren's IPO bodes well for the Chinese tech company, and will act as a signal for further IPOs of similar success stories on China's internet.
To me, the China Renren report is interesting on many levels. Most interestingly to anyone interested in Social Media in China, will be the fascinating study of Renren's challenges. Certainly it is not going to be all smooth-sailing for the company, as it tries its best to stay relevant to as many Chinese as possible, increasing its audience and registered (and active) user bases as it moves forward. In fact, as one studies this report, it becomes clear that if anything, Renren has a major uphill battle against it.
Check out some of the interesting timelines and comparative statistics and figures in this report; definitely worth a peruse.
Here are 11 key highlights about SNS (social networking sites) in China that I found in the report that were fascinating:
1. Renren suffers from a lack of differentiation in the crowded SNS market
2. Renren's 120M registered users, only around 30-35M are active users
3. Gaming remains the top draw in terms of what people do on Renren, especially in Tier 2 & 3 cities
4. "Killing time" and "maintaining friendships" and "making new friends" are also top reasons to use SNS in China
5. Group Shopping is a big focus in how the platform will develop going forward for Renren
6. The most used apps on Renren are (1) Diary (2) Photos (3) Music (4) Gaming
7. SNS is gaining over online News Portals like Sohu and Netease in terms of # of views. Only Sina is maintaining its lead due to its stand-out popular Weibo
8. Weibo (microblogging) is turning out to be SNS biggest "threat" currently. In fact, some SNS are turning to developing Weibo features to compete. Not to be outdone, some Weibo services in China (like Sina Weibo) are in turn developing out more robust social networking features within their microblogging platforms!
9. In terms of stand-out competition in the "pure" SNS space, QQ's Pengyou is a rising threat to Renren's market share
10. Unlike in the West, "integrated SNS" (the likes of what Google tried to do with Buzz, for example), has proved popular in China. There are a variety of integrated SNS platforms, competing for time and user-base share in China, with the "stand-alone SNS" platforms (such as Renren)
11. Prospects of the rumored Baidu-Facebook partnership in China look "highly challenging"
To conclude, what are my own key takeaways?
The Chinese SNS (and Social Media at large, for that matter) landscape will remain deeply fragmented for at least the next 1-3 years. Perhaps longer. Before a clear frontrunner emerges again, as Renren was to China's internet in the mid and late half of the 2000s.
What I think we will see are "communities" developed within various SNS around "interests" – and as social media consultants, we need to talk to clients about the niche, targeting opportunities based on these insights about where their audiences and stakeholders are – i.e. within which cluster of SNS sites – some standalone, others integrated.
All in all, deeply fascinating stuff. Now then, who said China was simple?!
Zaheer Nooruddin is Lead Digital Strategist at Burson-Marsteller China