Internet & Tech

What’s Facebook?

Mark Zuckerberg’s Chinese rival is RenRen

What’s Facebook?

RenRen: 110 million users

Mark Zuckerberg, the founder of Facebook, is getting ready for his trip to China. He has been taking Mandarin lessons and studying Chinese history. He’s also been using his Facebook “wall” to ask for advice on where to go and what to see. The problem? He won’t be getting any responses from China itself.

That’s because Facebook, along with Twitter and YouTube, are not accessible on the Chinese internet. But the purpose of Zuckerberg’s visit is not to change that. His girlfriend Priscilla Chan is Chinese and he is visiting China for the first time to meet her parents.

Next time round, he might be more business-focused. Zuckerberg recently told TechCrunch, a tech blog: “How can you connect the whole world if you leave out 1.6 billion people?” (the combined population of China, Japan, South Korea and Russia, four key markets that Facebook lags in, admits Zuckerberg).

Similarly, in June he told an audience of marketers that without roping in the Chinese – the world’s largest internet population – it will be hard for Facebook to maintain its current breakneck growth.

But if Facebook does make a local move, it faces large established homegrown competitors. RenRen, bearing an uncanny similarity to Facebook’s well-known interface – now boasts 110 million registered users, or 23% of Chinese broadband users, says the Shanghai Daily. And much like Facebook before it, RenRen is in transition from its original focus on college students to a wider audience of young adults.

Kaixin001 is another popular mainland social network, controlling a 12% market share.

Unlike RenRen, Kaixin001 (the name means “happy”) has developed its own distinctive look-and-feel. But while RenRen is still concentrated on students, Kaixin001 mainly targets white-collar workers. And though they have lagged behind RenRen in absolute number, Kaixin001’s users have traditionally spent twice as much time online, compared to other Chinese social networks.

The reason? Workers have been hooked on playing games online and checking friends’ photos from their office desks. Kaixin001 was the first to tap into the social games craze with titles like Happy Farm, Parking War and Friends for Sale.

But in the last year Kaixin001 has seen a fall in market share, in part because rivals have invested in similar online offerings.

RenRen, which opened up its software platform last year, has also prospered by allowing third-party developers to make games and applications for its site. Foreign companies like the Seattle-based PopCap Game – creator of games such as Bejeweled and Plants vs. Zombies – are among those trying to develop the next big hit.

Kaixin001 has chosen a different route, keeping its own platform closed to third-party applications. Instead, it has been trying to identify trends from the most popular games, and then produce versions of them in-house. But as social games become more sophisticated and difficult to copy, its efforts have failed to develop a widespread following.

For instance, it took Kaixin001’s developers six months (dog-years in gaming terms) to imitate a popular restaurant game on RenRen.

“The games [on Kaixin001] are never updated, everything is exactly the same. After a while I just stopped playing,” one former Kaixin001 fan told the Global Entrepreneur.

If it’s just a matter of opening its software platform, why doesn’t Kaixin001 follow suit? In fact, an open platform is not a straightforward choice. There can be little control over what gets developed and there are concerns about potential side-effects like viruses, malware and drawbacks with general site stability.

So far, these are challenges that RenRen seems to have successfully coped with. The company is also planning to hold an initial public offering next year.

Kaixin001 is now toying with opening its platform too, but Global Entrepreneur reckons that the decision might be coming too late. The magazine’s verdict: “Goodbye Kaixin001”.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.