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Sina Weibo’s Failure: Why Chinese Companies Should Take the Rest of the World Seriously

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Last week, we reported that Sina Weibo has added Facebook login to its service to make it easier for overseas users to sign up. My response? Way too little, way too late.

A couple of years ago, Weibo was buzzing. Even outside China, lots of people were talking about it. But despite the interest from overseas pundits, brands, and social media watchers, Sina made pretty much no attempt to make the service accessible to anyone other than Chinese people. It didn’t even bother to localize the service in other languages (which would have been easy), let alone push more strongly into any new markets. And at the time, everyone seemed to think that made a lot of sense. China’s market, after all, was gigantic and still growing. Why should Sina even bother with foreigners when there was so much work still to be done in the Chinese market?

The short answer is risk. Although all markets are regulated by the government, China’s internet market is quite heavily watched, and especially with services that provide user generated content, the risk that the government is going to step in and change how things work is quite significant. This is, in fact, pretty much exactly what happened to Sina Weibo. the government wanted real name registration and stepped-up censorship practices. Users didn’t, so when an alternative service (WeChat) came along, people stopped visiting weibo so often.

Having realized this, it seems the company is now finally willing to implement a few features that benefit overseas users. Unfortunately, no one overseas cares anymore either. The buzz is gone, so there is no reason for social media fans to flock to Weibo, and Chinese users all appear to be headed to WeChat, so that’s where the foreign corporations are inevitably headed too.

Sina’s laser-like focus on the Chinese market two years ago prevented it from building up what probably could have been a significant market overseas. Was Weibo ever going to overtake Twitter in the United States? Probably not. But the service had enough unique features that it might well have gained a cult following, and I suspect it could have performed especially well in some of Southeast Asia’s developing countries.

weibo-guy-questionWeChat’s success overseas despite the fact that the American chat app Whatsapp came first is proof that a Chinese company taking overseas markets seriously can still succeed there. And the good news for Tencent now is that even if China’s government implements regulations that drive domestic users away, the app now has a massive userbase overseas that it can turn to. I bet Sina wishes it was in a similar position, and it probably could have been if it had actually tried.

This is something I see frequently with Chinese tech companies. The rationale tends to be that China’s market is already big enough, and that Chinese companies don’t tend to do well overseas. I don’t dispute either of those points. But China’s market being big is meaningless if you are regulated out of it. And part of the reason for Chinese companies’ lack of success overseas is that most of them barely try. How hard would it of been for Sina to implement a proper English language interface and interfaces in a few Southeast Asian languages? It would not have taken much effort, time, or money to do at least that. But at the time, Sina was not interested in the rest of the world. Now that China has moved on, I think Sina is going to find that the rest of the world is no longer interested in Sina.

And Sina isn’t the only Chinese company in this position; lots of Chinese tech firms operate China-centric businesses in sectors where the regulatory risk is quite high. For example, Chinese taxi apps are currently at risk of being squeezed out of that market by the government, but very few of them have attempted to expand overseas at all. We’ve seen lots of taxi apps fighting for market share in Southeast Asia. Why aren’t Chinese apps trying to be a part of that market, too?

Some people will tell you otherwise, but there are Chinese tech companies that are making world-class products. And frankly, it’s a damn shame that either due to incompetence or disinterest on the part of their producers, these products aren’t being shared with the rest of the world. If Chinese tech companies want to be successful on a global scale, they’re going to have to stop thinking of the rest of the globe as a last resort to come to only if China doesn’t work out.

This is not to say that they should focus only on overseas markets and ignore the Chinese market, which truly is massive and continues to grow an extremely rapid pace. But as Weibo’s fall from grace has shown us, even a product that’s the darling of the Chinese market one year can be seriously threatened by regulation and by competition. Having built markets in other countries would have helped Sina mitigate the risks inherent in the Chinese market like the mandatory censorship that has helped to sour many users on the service. Instead, Sina chose not to bother, and the Facebook login it is only now getting around to offering is a pretty meaningless gesture at this point. Other internet companies would do well to learn from Sina’s mistake.

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