Monthly Archives: July 2013

Professional social networking websites in China and “Guanxi”

China has the world’s biggest online population. As a consequence, many Internet businesses are targeting the country. Several internet giants failed while others succeed like Amazon.

Professional social networking websites such as LinkedIn are not very used in China but the usage is growing. The way LinkedIn is built is a reflection of American culture with direct contacts. The website is not blocked contrary to Facebook.

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In China people do not want to meet with people they don’t know. Chinese people have a culture based on relationships among family members, colleagues, and close friends. This famous system of personal connections is known as “guanxi” and is reinforced by mutual favors, which plays a vital role in conducting business and navigating a huge country. In China, the boundary between private and professional life in China is not always very clear: for instance, an employee is able to go to karaoke and get drunk with her/his clients. This behavior is less usual in other countries.

French professional social networking website called Viadeo understood the users are very different from Europe and decided to acquire one of the leading Chinese equivalents called Tianji. Even the founder of the French company is located now in China.

The position of Tianji is to offer users a way to maintain “guanxi”. As of July 2013, VALUE2020 estimates that over 16 million users are using the service while Linkedin has only over 3 million users. Quite surprising, Linkedin offers versions in Japanese and in Korean but not yet in Chinese.

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Chat Mobile App: Whatsapp, Line, and WeChat in the World

Whatsapp is still leading the world of free messaging being the first downloaded application in 10 countries on Google Play (Google store for applications). The application  is within rank #1 and rank#10 in 28 countries on July 27th.

Whatsapp has been challenged for about a year mostly by Tencent with WeChat, and Line Corporation with Line.

Line and WeChat fit very well the needs of Asian users. Tencent is using stars and media to increase the number of users worldwide: social media like Twitter, Facebook has been heavily used for months but for aggressively since March 2013.

On July 27th, the Japanese application called Line was the most downloaded application on Google Play in Argentina and Chile. Whatsapp just behind ranked #2.

On July 27th, the Chinese application called WeChat was the most downloaded application on Google Play in Italy. Whatsapp just behind ranked #2. Lionel Messi, famous soccer player of FC Barcelona, signed an agreement to promote WeChat. The effect on Italian fans was very quick.

Below an advertising in Hong-Kong were people still prefer American social media like Facebook and Whatsapp than WeChat.

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Google and Facebook Accelerate Road to Mobile Commerce 1/2

The strategy of US firms is slightly different from Chinese firms. Their scales are bigger and moving slower but stronger than Chinese stakeholders.

In China, Alibaba, the e-commerce giant, found SinaWeibo has a partner taking shares into the social network. Tencent develops WeChat as a social power for purchasing on QQbuy and other partners websites.

In the USA, Google and Facebook are deploying their respective strategy.

Google integrates all of its products one unique service: for instance, social elements collected through actions and interactions are now seen in the gmail box (Social tab).

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Today, Google+, Gmail, Youtube, Google Maps between other services are free because the value is in the actions of the user who discloses what she/he is doing.

Google now is the service using those data and in the same time collecting new data.

Google Moto X is the device.

Google Android is the operating system.

And tomorrow you will drive your Google car with Google Maps listening Google Music and thinking what you will buy on Google store.

Why China is a country of innovation

A few examples of China moving ahead:

-Research and growing number of patents
-Mobile Internet
-Cities
-Transportation
-Service to customers

Remember China invented paper and gunpowder…

China is back on the path of innovation. Here are a few signs.

Chinese manufacturers are skilled at “process innovation” incrementally improving the way they make things.

Chinese Internet shows a change: there have been few recent, major innovations coming from China. Among other firms, Tencent, an Internet giant in China in e-commerce and social networking, SinaWeibo, and Alibaba, an ecommerce company already demonstrated their power of innovation. Some of the staff of the WeChat team worked previously for Google Inc.

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While China is best in class at producing most of the world’s technology based products (for instance, iphone), it’s the marketers of the USA who continue to capture most of the value from those products.

Another example of Chinese innovation is giant Chinese telecommunication firm called Huawei, the largest telecom equipment manufacturer in the world with products deployed in more than 140 countries, covering more than one third of the world’s population.

Recently emerging as the third largest smart phone manufacturer behind Samsung and Apple, Huawei is moving from low end budget phones into the more premium market shipping 32 million smart phones during 2012 – up 60% on the previous year. In partnership with Google and its Android OS, Huawei is clearly targeting the proprietary, closed Apple products which to date have led the world but are now under real threat from the Korean brand and now the Chinese brand.

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To continue the economic transformation, China is pouring billions of dollars into innovation and R & D programs, attempting to move up the value chain. Tencent, Baidu, Alibaba, and Huawei built massive campus in Beijing or Shenzhen. Those companies want to lead in the future and know the importance of the state of the art R &D building.

Product innovation is visible as well with the increasing number of employees with a PhD degree among the R & D teams. For instance, Huawei is the largest applicant for worldwide patents, doing better than Samsung, Apple, and Google.

Haier, the world’s No. 1 white goods brand, has developed a range of design-led refrigerators and dishwashers, offering a palette of coordinating colors and finishes. In order to satisfy its customers’ various needs, Haier offers tailor-made design for its refrigerators: “your refrigerator, your design”. Haier already entered the Internet of things, connected home appliances. The 3D refrigerator has a built-in Wi-Fi connection with a touch screen offering many functions, such as being able to check the weather forecast. Thanks to RFID chips that are built into the packaging of the contents of your fridge, this product can even alert you to when food will pass its ‘best before’ date.

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How are Chinese companies successfully targeting its consumers in China? They do what every good company should do: listen to its customers’ complaints and deliver products that address their needs.

Can China innovate on a global basis? We think positive under the condition of understanding the differences in addressing the needs of other cultures. WeChat is an example of innovative product (both chat app and social network) which starts to succeed outside China.

What we are still waiting to see are products and services sold worldwide which are both innovative and disruptive.

Innovation in China: a day of an urban Chinese executive Part 1

Li Wang is Director of sales for a German brand in the Guangzhou area. He is the father of one son and his wife is working in the banking industry.

Wang is awaken by his latest Samsung smartphone.
He uses Baidu to check the weather and a new application from Google Play for air conditions. The weather will be good but air conditions will not be excellent: no wind is expected and more and more cars are on the freeways and streets of the city. Selling cars is the business of Li Wang, therefore he will not complain about this trend.

He waits for the lift and watch the frame screen telling him to scan the JD.com QR code to get a discount today. He doesn’t have time but while in the lift sends a WeChat message to his wife. Now that their son is using an ipad at his private school, his wife has downloaded WeChat to be in contact with her son. Wang stops a taxi and asks for a ride to work.

Meanwhile he is in the car, he buys a concert ticket thanks to the screen aboard the car. He also see that there is a new game application that looks fun and could be of interest for his kid. He takes a picture and sends it to his son.

Wang arrived the new city center. He is working on floor #52. There is no waiting time for the lift because the building is brand new and well equiped with 10 lifts. On the way up, he sends a message to his wife about the concert and publish a comment to a friend on Sina Weibo: they are going!

Whatsapp Dominates Messaging, Facebook Dominates Social Activities

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Whatsapp is back at the top most downloaded application in Philippines, India, Mexico, and Indonesia. WeChat is unable to become number one at the moment.

Whatsapp was in the market before WeChat and even with innovation in the app it is difficult for WeChat to compete on the social ground when your user base is smaller than your main competitor.  Google Plus faces the same situation with Facebook. Tencent is preparing new marketing campaigns with global stars using the successful chat and social application.