Social Media and China: It’s Not What You Think: Notes from SxSWJim Tobin | March 14, 2010 | http://testpress.ignitesocialmedia.com/?p=504″>View CommentsMany of the brands I work with are extremely interested in the Chinese market. With a burgeoning economy and a billion people, it’s easy to understand why. In fact, one of my clients got back from China just in time to fly to Austin for this conference. Her description of the differences was fascinating.So if we’re going to want to look at social media marketing for the Chinese market, we need to understand social media in China. That’s why I attended “Social Media and China: Different than You Think” at SxSW. The panelists included:Jacqui Zhou from DellBenjamin Joffee from Plus Eight Star; andSam Flemming from CICSocial Media PenetrationWhile the Internet population in China exceeds that of the United States, the initial question was about socia media usage, and whether or not it’s popular. And it is. There are 221 million blogs, 117 million BBS and 176 million social network users. While Facebook is blocked, most people use a local Chinese social network, QZone, which was built by Tencent.Note the Bulletin Board System reference there. While they are called that in China, they are not a throwback to the 1990 BBS systems in the US. You can upload pictures, video and more, in an anonymous forum, and it’s among the most popular ways to spend time. And chatter about brands is more likely to take place on BBS than anywhere else. The most popular platforms are listed below, showing clearly that people have multiple accounts as there are only about 400m online users in China:Tencent (1B+, 485m active)Qzone (310m)RenRen 200m (50m mobile)Kaixin001 (75M)51.com (160m)What Do People Do Online?272 million on instant message, 222 million on online video, 108 million on online shopping (The market leader beat eBay and chased them from the market), 265 million on online gaming and 321 million using online music.Looking at the social technographics ladder, America has 21% of people who create original content, while China has 40% of people who create content. That’s a very significant difference. While the inactives are equal (25% of each population), and people in the US are more likely to join social networks than Chinese (25% to 23%), the large percentage of creators is potentially interesting from a marketing standpoint.Zhou noted the difference between the stereotype that Asians are less likely than Americans to speak directly and wondered if anonymous BBS systems are popular as a result. Flemming agreed, but noted that it’s also a reaction to a media system that isn’t fully objective. So the people spread the word themselves through many of these social systems. Virtual currency (at QQ, pictured above) is so popular that it’s now taxed by the government. That’s a shocking sign of its ubiquity.What Are they Talking About?By industry, the chatter varies dramatically. In order of declining popularity, conversations center aroundAutomobiles (~13m)Mobile phone (~7m)Sports (~3m conversations)ComputerBaby productsCosmeticsHealthcareFlemming is finding that these conversations are changing the way people buy cars. His friend went online and asked if anyone wanted to buy the same car as her so they could get a discount. Two weeks later, 55 people went into the same dealership and bought 55 cars together. Needless to say, they got a very good deal by using this “group purchase” concept. Not surprisingly, mentions of “group purchase” in China have grown dramatically over the last two years.Chatter around the Ford Focus found that more than half of people discussing the car didn’t use the official brand name. They instead used a popular nickname for the car. Absent that local knowledge, the conversation tracking system could be set up incorrectly. In fact, a whole new language called Mars language has been created online and many people use them to speak both online and off. (I’d hate to have to build a monitoring system to track a made up language.) These slangs and languages are so pervasive that the university system had to ban the use of net slang in entrance exams.China Learned from Korea and JapanJoffe noted that China learned a lot from Korea and Japan. Korea’s popuar Cyworld and Japan’s Mixi, MobileGameTown and Gree (all of which are listed on the stock exchange and selling virtual goods). The online advertising market is not as valuable in China, so monetization occurs largely through sales of virtual goods. In fact $5 Billion worth of virtual goods were sold online, which is 5 times bigger than the US (down from 25x in 2008).Tencent made over $1.5B USD (which is roughly 3x what Facebook made). Tencent is third largest internet company in the world, after only Google and Amazon. Most Americans know nothing of it, but their net margin is 40%, which is astounding.Online Gaming in ChinaLove Farmville? The first farm game was made in China by a company called 5 minutes. That was inspired by a Japanese game, and then Zynga copied it and brought it to the U.S., but they weren’t the first by any means. The original explanation for popularity was “because there are lots of farmers in China.” The popularity of Farmville in the US, however, largely debunks that.Doob.cc has a very popular game in China. It has a virtual goods component, and it looks like a standard rhythym game (think Dance Dance Revolution), but you dance with someone else via the network. The boys buy the girls they meet online virtual gifts, just as you would buy a drink in the bar. Suddenly the game is extending social life and even dating online.The 5 Cs of Chinese InnovationCopy: We always start with something.Combination: By combining two things (i.e., instant messaging and virtual goods), you can get a great idea.Competition: As soon as there are two strong video sites, for example, they need to compete and differentiate, which leads to innovation.Constraints: Because you can’t do everything, the constraints foster innovation, even knew business models (because online advertising isn’t workable, for example).China: It has to work for China, and the unique settings of the country, which might be different than for example a Japanese consumer.Fewer Credit CardsWith much less popularity of credit cards, how do you get the payments for virtual currency? QQ began by selling scratch cards in stores. You’d buy it in store, scratch off the code, enter it and have the money deposited into your account. Very clever.Other ExamplesZhenai is the most popular dating site in China (and the world, with 22 m profiles it’s bigger than Match.com). Since they couldn’t use teh same model, they have 350 people on staff who call people up to arrange a date. Then they call you back to see how the date was. They then get feedback from the person dating, and give you feedback on how you did on your date. That should, in theory, make you a better dater. They charge ~$450 USD for a six month subscription, which is very expensive given then income levels there. But they are adding a lot of value. Would that work in the United States? Interesting question.Lihua allows you to order food delivery by IM.BabyTree is a social network for young parents where you can also buy goods for the child. It’s beginning to become profitable. The limitation on number of children you can have also impacts this site, both positively and negatively.Dianping is a Yelp-like site that has many more reviews than Yelp. It also ranks the many dishes at each restaurant in terms of popularity.While China is known in the U.S. in part for their rampant piracy (software, fashion, films, etc.), it’s clear from the level of participation, and the monetization of that participation, that China’s innovation also offers lessons for marketers in the United States and elsewhere. Visit https://themarketingheaven.com/ if you want to know secrets of successful social media accounts.