March 09, 2009

Conquering China



Last week I had a discussion with my friend and colleague @kaixie. He recently signed up on Twitter, and I explained the concept to him, with the whole evolution of blogging and everything. As you might have guessed, Kai is Chinese, and somehow we got into talking about the tech climate in China.

As some of you might know, the Almighty Google is not the biggest search engine in China; Baidu is (for certain reasons, granted). eBay is not the biggest auction site in China; Taobao is. YouTube is not the most popular video sharing site in China; YouKu is. TechCrunch had a post about the Tencent network recently, which runs the most popular Internet community in China, providing both the insanely popular QQ messenger (300m+ users), and the Qzone personal web spaces. Why have so few of the big western [1] tech companies made it big in China?

Whenever a good idea is launched in the west, some Chinese company manages to clone it before the western company gets any Chinese deployments going. Some would argue that the Chinese people have an NIH mindset. Others say that the cultural differences make expanding to China difficult. Whatever the reasons, it's tough for western companies to make it big in China. I read an interesting albeit old article comparing Google to Baidu. I think most of the points made there still hold up.

A bold western company aiming high should launch operations in the west and east simultaneously. Twitter did not do this. In 10 minutes, Kai pointed out six different Chinese Twitter clones:
  • 叽歪de: Means nag in Chinese.
  • 饭否: Means something like Have you had a meal. Chinese small talk.
  • 来咕拉: Means meaningless in Chinese.
  • 巴布: Is the sound of a kind of bird.
  • 做啥: Means What are you doing? in Chinese.
  • 爱唠叨: Means nagging in Chinese.
My point isn't that the Chinese are the only ones that clone stuff, because they're not. We too have tons of western Twitter clones. My point is that it will be extremely hard for Twitter to expand to China, as a number of Chinese services are already controlling that nische.

Maybe Twitter don't want to expand to China; that's fine. A company that wants to expand to China should however consider the following things:
  • If you launch a good feature in the west, a Chinese company will do the same thing. A week after Facebook releases a new feature, the Chinese equivalents have the same feature. Therefore, start planning Chinese deployments simultaneously, if you want to expand there.
  • Consider cultural differences:
    • Chinese websites look different. User behavior patterns are different. Western users would probably find an English site with Chinese design straining to use.
    • Monetize your services in Chinese ways. For example, almost any customization of the QQ messenger costs money. There's a whole market for avatars for QQ profile pictures. Western users wouldn't pay a cent for anything, unless it actually cost something, like Skype Out. Know your users. Culturally too.
    • The QQ messenger also has a built-in status system, giving users extra status for God-knows-what. Leverage the power of rewards.
  • Don't underestimate the NIH factor, and try to brand your company well. There must be many Chinese companies that can make a lucrative business out of helping western companies expand to China.

If you think I'm wrong about something, let me know in a comment. That way, we'll actually both end up knowing more. Hope you found this interesting. Don't let somebody else eat your cake.

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[1] I'm gonna go ahead and say western. You know what I mean.

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