When MySpace China launched in April last year, it seemed to make perfect sense: the world’s leading social networking site (SNS) paired with the fastest-growing internet market. Less than 18 months later, it has lost its CEO and faces serious questions about its strategy within China’s burgeoning social networking scene.
The issues facing the site emerged after its CEO, former Microsoft China exec Luo Chuan, departed his post. While Chuan has not given a reason for his departure, Chinese reports speculate that he left because MySpace had not given him the autonomy he had hoped for, making success challenging in an industry increasingly crowded with local alternatives.
China has traditionally been a tough nut for foreign web brands to crack. Aware of this, MySpace China set out to launch a wholly localised entity. According to reports at the time of the MySpace launch, Chuan said he and his local team would have “total control” of the site’s operations and, being native-Chinese, the crew would understand how to manage a business in the local market.
According to MySpace.cn, the site has five million Chinese members. While this crowd is substantial enough to continue operations, analysts say the News Corporation-owned site needs a strategy to lure users from other sites.
“One thing I know is that Rupert Murdoch has put great pressure on MySpace.cn, aiming to have 50 million users in the next two years, which is a very aggressive plan and sounds really hard to achieve in China,” says Ning Liu, senior analyst at BDA. “Decisions have been a little slow to follow the quick-changing situation in China.”
He argues that MySpace not only entered the market late but has not differentiated itself from its wide range of competitors. “Before MySpace.cn entered China, there were already over 100 SNS sites here, but only a few of them can quickly gain a large user base by targeting certain user groups or providing interesting functions suitable for Chinese internet users,” says Liu. “Unfortunately, I did not see that MySpace.cn had a differentiated target and unique services to help it compete with existing players.”
Western-style social networking has been slow to take off in China - partly because of the need to use one’s real name as opposed to the anonymity of bulletin boards — but recent months have seen growing interest in the format. However, there are signs that it is developing differently to Western markets, making MySpace’s proposition tough to pull off.
For the most part in the West, the most popular social networking sites are targeted at a general audience, but according to Adam Schokora, manager of Edelman Digital in China, this won’t do in China because “the core of the Chinese internet is the bulletin board forum. This is just what Chinese netizens know and prefer, and bulletin boards are typically vertical in nature, focused on specific topics of interest”.
He argues that MySpace China is unlikely to become a niche player. “Given the brand name, amount of money behind it, and team it has put together, MySpace China has no choice but to go after the massive mainstream social networking market to reach critical volume. However, in the long run, I don’t think Chinese online habits or preferences will support general social networking sites.”
According to William Bao Bean, a partner with SoftBank China & India Holdings with a focus on internet businesses, unless MySpace comes up with a niche soon and News Corp gives it the freedom to grow organically, the brand will continue to flail - a situation exacerbated by Chuan’s departure.
“It’s very, very hard to find qualified people in China to manage large online companies and who are applicable to international investors,” he says.
“Sometimes the international shareholders have a tough time giving local management the flexibility required. The infrastructure is very much different here and consumer behaviour is completely different from other parts of the world. Even companies that understand the market have failed, and the companies who gave less autonomy to the local management fared even worse.”
Got a view?
Email [email protected]
The issues facing the site emerged after its CEO, former Microsoft China exec Luo Chuan, departed his post. While Chuan has not given a reason for his departure, Chinese reports speculate that he left because MySpace had not given him the autonomy he had hoped for, making success challenging in an industry increasingly crowded with local alternatives.
China has traditionally been a tough nut for foreign web brands to crack. Aware of this, MySpace China set out to launch a wholly localised entity. According to reports at the time of the MySpace launch, Chuan said he and his local team would have “total control” of the site’s operations and, being native-Chinese, the crew would understand how to manage a business in the local market.
According to MySpace.cn, the site has five million Chinese members. While this crowd is substantial enough to continue operations, analysts say the News Corporation-owned site needs a strategy to lure users from other sites.
“One thing I know is that Rupert Murdoch has put great pressure on MySpace.cn, aiming to have 50 million users in the next two years, which is a very aggressive plan and sounds really hard to achieve in China,” says Ning Liu, senior analyst at BDA. “Decisions have been a little slow to follow the quick-changing situation in China.”
He argues that MySpace not only entered the market late but has not differentiated itself from its wide range of competitors. “Before MySpace.cn entered China, there were already over 100 SNS sites here, but only a few of them can quickly gain a large user base by targeting certain user groups or providing interesting functions suitable for Chinese internet users,” says Liu. “Unfortunately, I did not see that MySpace.cn had a differentiated target and unique services to help it compete with existing players.”
Western-style social networking has been slow to take off in China - partly because of the need to use one’s real name as opposed to the anonymity of bulletin boards — but recent months have seen growing interest in the format. However, there are signs that it is developing differently to Western markets, making MySpace’s proposition tough to pull off.
For the most part in the West, the most popular social networking sites are targeted at a general audience, but according to Adam Schokora, manager of Edelman Digital in China, this won’t do in China because “the core of the Chinese internet is the bulletin board forum. This is just what Chinese netizens know and prefer, and bulletin boards are typically vertical in nature, focused on specific topics of interest”.
He argues that MySpace China is unlikely to become a niche player. “Given the brand name, amount of money behind it, and team it has put together, MySpace China has no choice but to go after the massive mainstream social networking market to reach critical volume. However, in the long run, I don’t think Chinese online habits or preferences will support general social networking sites.”
According to William Bao Bean, a partner with SoftBank China & India Holdings with a focus on internet businesses, unless MySpace comes up with a niche soon and News Corp gives it the freedom to grow organically, the brand will continue to flail - a situation exacerbated by Chuan’s departure.
“It’s very, very hard to find qualified people in China to manage large online companies and who are applicable to international investors,” he says.
“Sometimes the international shareholders have a tough time giving local management the flexibility required. The infrastructure is very much different here and consumer behaviour is completely different from other parts of the world. Even companies that understand the market have failed, and the companies who gave less autonomy to the local management fared even worse.”
Got a view?
Email [email protected]
.jpg&h=334&w=500&q=100&v=20170226&c=1)
.jpg&h=334&w=500&q=100&v=20170226&c=1)
.jpg&h=334&w=500&q=100&v=20170226&c=1)
.jpg&h=268&w=401&q=100&v=20170226&c=1)
.png&h=268&w=401&q=100&v=20170226&c=1)
.jpg&h=268&w=401&q=100&v=20170226&c=1)
