I've just come from Beijing where I was talking about social networks, only to discover that the Chinese are in many respects ahead of the rest of the us.
1. Size of their social networks
QZone the largest social network in China has over 567M registered accounts.Larger than Facebook, which has almost 500m but is spread out across the world.
Other notable networks are Renren - targeting young people (last estimates put users at just around 50m), and Kaixien - a professional network (around 30M). Most of my colleagues in China were on these two networks.
51.com is another one - which they hadn't heard of - but is reported to be the second largest and used by people who live in "lower tier cities" and rural areas.
International giants like Facebook, Twitter, and Google are banned and are consequently missing out on the hundreds of millions of Chinese online users.
2. The world's most lucrative social network
Qzone is owned by Tencent, inc which has revenues that are larger than Facebooks. Tencent hails from Shenzhen, near Hong Kong. Founded in 1998, it had revenues of $1.8 billion in 2009. Although best known for QZone, its real innovation is its revenue model. Much of its profits come from online games and a virtual currency, called Q coins. Users purchase this with real money and use it to buy digital wares, such as virtual weapons to increase the powers of their avatars. Virtual goods and other “Internet valued-added services,” like avatars, dating services, online memberships, music and community sites are smart and lucrative revenue streams.
Social games, like Farmville, can trace their roots back to China. This is an interesting example of how the direction of innovation has started to change.
The one key thing that sets them back is the absence of open conversation. State control means that open community based conversation is out. The government appears petrified of open conversation, and the power of social media. Remember Iran, and how the protesters used Twitter and YouTube to fight state owned media control.
There is, however, a side of this argument that brands in the West can learn from. Brands see social media as open conversation, and are fearful of it - when actually social media has many components that are open to differing degrees. It shows that brands can use “Internet valued-added services,”, and tools as first steps and even alternatives to the cliche of open conversations - they are still social, and still very much on social platforms. Social media is broader than talking to a community manager on Facebook or Twitter.