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A Framework for Understanding Social Media Trends in China

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A Framework for Understanding Social Media Trends in China Deans and Miles A FRAMEWORK FOR UNDERSTANDING SOCIAL MEDIA TRENDS IN CHINA P. Candace Deans, University of Richmond, Virginia, USA, [email protected] J. Barrett Miles, University of Richmond, Virginia, USA, [email protected] ABSTRACT same functionality and usability as the Western sites. This paper provides an assessment of social media trends in China. An array of social media Understanding social media in China is a must for platforms have emerged for the Chinese market. It companies that do business, or wish to do business, is imperative that foreign companies doing there. China now claims the largest population of business in China understand the trends in order to Internet users, and all indications point towards effectively tap the Chinese market. Traditional continued growth of this population as the Internet social media sites used in the United States, for becomes more accessible throughout the country. example, may be banned, making it necessary for Being able to listen to what people are saying about companies to utilize sites owned by local Chinese your company and products is a vital survival companies. A framework that categorizes social strategy. Better understanding of your consumer media sites, their primary user groups, and the and engaging with them are the next steps towards potential value to companies is presented. Finally, social media success. recommendations for companies doing business in China are provided. INTERNET AND SOCIAL MEDIA USAGE Keywords: social media, China, social networks, The Chinese are avid users of the Internet and search engines, internet social media. Trends have shown dramatic growth in the number of Internet users and the number of INTRODUCTION social media sites. The China Internet Network Information Center (CNNIC) was established in China represents a substantial market potential for 1997 as the government administrative agency United States companies, as well as for companies responsible for Internet affairs under the Ministry around the world. Not only does China present of Information Industry. According to the CNNIC, unique issues in terms of government regulations China’s number of Internet users has grown from and involvement in day-to-day operations, but approximately 23 million in 2000 to 420 million in companies also must understand the unique social June 2010 [5]. This means that China now has media platforms in order to reach the millions of more internet users than the United States. The potential customers in this market. Companies Internet penetration rate in China is estimated at have been aware of the need to understand cultural 31.8 percent as of July 2010, which indicates there differences in China for many years, but the use of is still great potential for further Internet user social media introduces new complexities when growth. doing business with Chinese consumers. According to the Ignite Social Media blog The array of social media sites available poses a (www.ignitesocialmedia.com), China reportedly problem. With new sites being added almost daily, has 221 million blogs, 117 million bulletin board the availability of sites is a moving target. In sites (BBS) and 176 million social network users. addition, because many of the major sites in the Further reported statistics inform that 272 million United States are banned in China (e.g., Google, Chinese are on instant messaging, 222 million use Facebook, Twitter, and YouTube), it is important online video, 108 million participate in online that companies operating in China understand the shopping, 265 million use online gaming, and 321 implications of government involvement, million use online music. Furthermore, a reported censorship, and regulation of the Internet and social 92 percent of the total 364 million broadband media sites. Throughout 2010, Google’s consumers contribute to social media. Although interactions and disputes with the Chinese these numbers are only estimates, the magnitude government have highlighted the delicate issue of reveals that social media is indeed very popular in censorship and strict government control over the China. Internet. The government’s constant blocking and interference with Western social media and search An astounding number of Chinese residents have engine sites has led to increased traffic and been reaching the Internet and its content through revenues for domestic Chinese websites. Local mobile phones. CNNIC’s 26th Survey Report on companies have set up social media sites with the Internet Development in China reported that by the The 11th International DSI and APDSI Joint Meeting, Taipei, Taiwan, July 12-16, 2011. Deans and Miles end of June 2010, the number of mobile Internet essential for companies in the future and will users reached 277 million, accounting for 65.9 change the way business is done. The authors percent of the total number of Internet users. contend that the increasing use of social media is Desktop computer access accounted for 73.6 being driven by consumers and that companies percent and notebook access accounted for 36.8 must have a better understanding of these consumer percent [5]. This trend of increasing mobile phone motivations and how to tap into the wealth of usage seems poised to continue. Mobile phones are information being discussed on these sites. The much more affordable than computers and thus are focus, however, is on the United Sates consumer more practical for many Chinese consumers and written from the viewpoint of U.S. companies. because of their multipurpose functionality. It seems likely that more mobile phones will be sold, Several consulting reports address the issues of and thus, more people will access the Internet how companies are using Web 2.0 technologies [2] through mobile phone devices. [3] [4] and how companies are finding value from the use of social media. Although companies were As of June 2010, the top three applications for studied worldwide, the focus was on trends in the China’s Internet users were online music (82.5 United States. percent), online news (78.5 percent), and search engines (76.3 percent). Business transaction The literature points to the need for an evaluation applications increased from December 2009 to July of social media trends and studies of consumer 2010, of which online payments increased 36.2 adoption of social media platforms and applications percent during this period. 2010 was the year of that address key markets such as China. The large-scale development for business applications. research on this topic is in its infancy and has not Chinese Internet users are changing their habits progressed beyond the initial bounds of inception. from entertainment to business applications. This paper lays the foundation for a better LITERATURE REVIEW understanding of these issues for the Chinese market. China has emerged as the world’s second An extensive survey of the academic literature largest economy, and has the largest population in reveals very little research that addresses social the world. There is a need to extend the literature media in general. Some recent studies have to address the unique social media issues and appeared that are specific to the United States implications for business opportunities and market or focus on U.S. companies. The December consumer behavior in China, the world’s largest 2010 special issue of MIS Quarterly Executive consumer market. focuses specifically on applications of social media in companies. Of the four articles, two are broad- SOCIAL NETWORKS based studies of U.S. companies [7], [12] and the other two are specific to Starbucks [11] and Dell According to iResearch (www.iResearch.com.cn), [10]. A few additional studies were found that social networking is a popular activity for Chinese evaluate social media sites in the United States [8] Internet users, especially among students and or examine the business value of Web 2.0 white-collar users who comprise the majority of technologies to companies [1]. All these studies, Internet users in China. Five main social however, were specific to the United States market. networking sites exist in China: Renren, Kaixin001, One book [9] was identified that targets an Qzone.qq, Pengyou, and 51. academic audience, but its focus is primarily on the United States market. Renren No studies were found that address social media Renren was founded in 2005 as Xiaonei by issues for China. The Chinese market is probably Tsinghua University graduates Wang Xing, Wang the most unique in terms of social media sites Huiwen, and Lai Binqiang. In October 2006, the available and how these sites are being used by site was acquired by Chinese internet consortium consumers as well as the issues associated with Oak Pacific Interactive (OPI) and, in August 2009, government intervention. It is surprising that most it officially changed its name to Renren. Xiaonei of the literature focuses on Western social media translates to “on-campus network” because when trends, primarily the United States. the site was created, it was for university students only (exactly how Facebook started; one needed a Several books have been written that focus on “.edu” e-mail address to join initially). The site is providing advice to executives related to absolutely identical to Facebook and has essentially incorporating social media into a company’s the same user interface, layout, tools and functions. overall agenda [6] [14] [16]. Li and Bernoff [13], Just like Facebook, Renren users have an editable for example, assert that social media will be profile which features a “wall” where others can The 11th International DSI and APDSI Joint Meeting, Taipei, Taiwan, July 12-16, 2011. Deans and Miles leave comments. Users also have the ability to Qzone.qq upload photos, videos, and more. Again, similar to Facebook, the site is open to third-party developers. The Chinese Iinternet giant Tencent Holdings This means an abundance of games and created Q Zone in 2005 to be the social networking applications are available on the site and online component of its qq.com online community.
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