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

C. Custer
C. Custer
2:35 am on Jul 29, 2013

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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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Have Your Say
  • FACTOCHECKA

    Custer…go get a day job please. Your Op Ed articles are so ridiculous this is the last one I’ll be reading.

    Why Weibo didn’t expand? It has nothing to do with ambitions of global usership. Your analysis assumes Sina’s goal for Weibo is the same as that of non-Chinese social media tech firms: to grow as big as possible. This is a false assumption. Control of Chinese people is their main goal. It’s the Chinese Big Brother on the internet.

    You should try working for a Chinese social media tech firm before writing these pieces of useless analysis. Sina’s DAILY government kickback and money received from private consulting firms to DELETE certain messages is probably more than the money Techinasia has raised in it’s history of existence, even when it was named Penn-Olson back in the day. Please do more research in the future before you write pieces like this. There are many serious tech entrepreneurs who may get the wrong message from your essays.

  • http://www.techinasia.com Willis Wee

    Hi nameless bitching troll – it is an opinion, not a fact. Btw, this is hilarious –> “Control of Chinese people is their main goal. It’s the Chinese Big Brother on the internet.”

  • http://mikecanex.wordpress.com Mike Cane

    I’d still like to be able to get a Weibo account that would would let me Follow certain tech companies if their “tweets” could be rendered into sensible translated English. Many of them still break product introductions on Weibo and it’s frustrating to be locked out — Google Translate cannot do Weibo.

  • http://21tiger.com Mike

    I guess they rightly figured: if the rest of the world had access to Twitter, why the hell would they use Weibo? I mean, shit, is it even in English yet? I can read Chinese, but .. like.. does Sina have a single employee who can read and write English? Why the hell isn’t this thing translated yet? If Chinglish is good enough for Chinese banking websites, it’s good enough for Weibo. Let’s go guys.

  • Rand

    @Willis, @Factochecka is right to a degree, this article is misleading and based on some pretty wide and baseless assumptions; it degrades the credibility of the rest of your content. The article is sophmorically dismissive, and could lead many who respect this site in the wrong direction.

    Just because some people are moving doesn’t mean all people are moving, and its important on social to see what behavior draws people to different social sites. One false implication is that WeChat and Weibo are interchangeable. WeChat serves a specific need, and Weibo serves a different need – though these two needs do overlap, they do not overlap 100%. The pie gets smaller for Sina, but its wrong to constantly imply they’ve failed, or fallen from grace as every new article I read is: “as seen on weibo” or “netizens on weibo say”, I don’t really see anyone talking about wechat that way.

    Could it be people just found a chat app they like to do things like… private chatting? Or is the case that now we have planes, we won’t need cars or boats anymore? A better analysis may need more balance. It’s easy to root for the new up and coming player with momentum (and makes for better linkbait, ala Samsung v Apple), but take a moment and consider the moves of the forerunner without the benefit of today’s 20/20 hindsight.

  • http://www.surroundapp.asia Jeffrey

    @mike cane: Why don’t you try Surround App (http://www.surroundapp.asia) to read your Weibo timeline in English? We try our best to overcome your frustration and are looking forward to your feedback.
    On topic: Sina Weibo cannot be compared with WeChat (yet). It’s like comparing Twitter with WhatsApp. Weibo is a media outlet that will allow people and companies spread topics. WeChat is (private) messaging and “follow” companies very specific. There is no public timeline in WeChat. That may come (or not) but I don’t see a “Ctrl Z” going viral on WeChat just now.

  • Sally

    I would like to undestand a bit more about where Custer sees the partnership with Alibaba Group going? Although Sina have admittedly been slow to monetise Weibo, the customer insights, targeting, etc. that could be gained from the analysis of activity on both platforms (and the interaction between the two) seem to hold huge potential: both in terms of providing a more seamless/integrated experience for the consumer, and creating attractive (and lucrative) advertising models for brands. To totally neglect the social commerce trend / aspect of the service seems to me to be the real oversight of this article. Can WeChat compete? Would love to hear if others agree?

  • http://www.techinasia.com C. Custer

    @ Jeffrey: It’s true that weibo and wechat are very different services, but at the same time, users only have a certain amount of time in the day to spend on social media, and if they’re spending it on wechat that means they’re not on Weibo. I really don’t think it’s a coincidence that Weibo’s users are using the service less as WeChat becomes more popular; they may be different services but they’re still competing for the same user mindshare, and weibo is losing.

  • http://www.techinasia.com C. Custer

    @ Sally: The Alibaba partnership is interesting, but thus far (as far as I’m aware), it hasn’t made any huge impact. And although I expect it will help Sina monetize its existing users, I don’t think shopping is going to bring any users back or inspire anyone to use the service more than they already do, so I think ultimately it’s not going to matter much.

  • Tom Liddell

    Regarding market penetration, as a sinologist, I naturally use WeChat regularly to keep in touch with my friends here in the UK and in China, but aside from other students of Chinese and Chinese people, I have yet to meet anyone who has it. Equally, when meeting Chinese people for the first time, there is often an expression of amazement that a laowai has WeChat.

    @Jeffrey We chat does have a sort of public timeline, in the same way that facebook does ‘moments’. Yes, its only for those with whom you’ve already connected, but it is much the same.

  • http://nicenic.net NiceNIC

    Wow !Really a thoughtful article for every company in China ,not just for internet companies.what next step will be of Sina?Expand its market to the foreign markets ,especially in Southeast Asia’s developing countries or in Africa? maybe by cooperating with more strength which can give Sina a strong hand.