Internet & Tech

Losing face

Chinese company outflanks Facebook

Banned in many offices...

Despite Facebook’s growing global clout, China is a market the social networking titan has yet to crack.

In a country that boasts over 300 million internet users, Facebook can claim only around 750,000 members for its “China” network. Compare that with the New York City network, which alone had 1.9 million members early this week. Facebook blames the shortfall on problems of translation and cultural differences.

Interesting, because Facebook’s faithful Chinese copy is thriving. Kaixin001.com is one of China’s most popular social networking sites with over 20 million registered users. The website, which was established in March last year, targets Chinese white collar workers. Its games like Facebook’s “Friends for Sale” and “Parking War” are a big hit in Chinese offices.

Kaixin, which means “happy” in Chinese, has reasons to be just that. It ranks 15th in terms of overall cyber traffic nationally (Facebook came in at 55th) and its advertisers include heavyweights like General Motors, Lenovo, L’Oreal and Lancome.

But there are potential clouds on Kaixin001.com’s horizon, as it is involved in a legal dispute with Beijing-based online entertainment company Oak Pacific Interactive, which owns China’s largest social networking site Xiaonei.com (which largely targets students).

Oak Pacific launched an additional service in October last year with a very similar name – Kaixin.com.

Not the most subtle competitive ploy, perhaps, and Kaixin001.com immediately sought legal remedy. It also claims Kaixin.com has a similar design and game applications to Kaixin001.com.

Oak Pacific refutes the charges, claiming legal purchase of the domain name Kaixin.com, and independent design of the applications on the site.

“A domain name is just the door of a social networking site. People revisit our website because it has a good reputation for games,” Xu Chaojun, vice president of Oak Pacific Interaction, told China Business Weekly. “Kaixin.com is not a copycat. We will fight for our right and reputation in court.”

Liu Qian, vice president of Beijing-based Kaixinren Technology, the developer of Kaixin001.com, insists its competitor is using a naming strategy to “mislead netizens” and as a result, the firm is suffering economic losses.

Industry observers are calling the lawsuit the battle of the Shanzhai. ‘Shanzhai’ became a popular name for fakes last year (see WiC1) and in particular the copying of well-known products or concepts. In this case Kaixin001 ‘copycatted’ Facebook and Kaixin.com copied Kaixin001.

Oak Pacific doesn’t seem too uncomfortable with the Shanzhai comparison. “If you say it [kaixin.com] is a Shanzhai edition, then baidu.com is also a Shanzhai”, Chen Yizhou, President of Oak Pacific told the China Daily. Baidu.com is China’s most popular search engine and bears a distinct resemblance to Google.com.

One fewer social networking site would be a positive development, as far as many employers are concerned. Company managers are now complaining that employees are spending too much time on these sites, to the detriment of office productivity.

In fact, 400 companies have set up an Anti-Loser Union – with a “loser” defined as someone who uses social networking sites while at work. The Union reckons Chinese office workers spend an average of six hours a week on such sites when they should be working.

“Networking sites are the biggest priority in my life now. Even at work I tend to log onto the website the minute I am unoccupied,” Scott Wu, an advertising company executive confesses to Shanghai Daily.

But not any more. His company now blocks access to Kaixin001.com, and its various competitors.

Indeed, an executive at a Xiamen-based media company recently got fired. Why? In spite of being warned by HR to desist, he continued to check his “parking lots” on Kaixin001.com every hour.


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