U.S. social media companies such as Facebook and Twitter are eyeing off China in a renewed attempt to make inroads into one of the most lucrative markets in the world. The banning of western social media sites in China has been widely publicized for some time. Often dubbed ‘The Great Firewall of China’, government controls mean that sites such as Facebook and Twitter have been unable to set up shop there due to the government’s hardline stance regarding the proliferation of western media and the effects it would potentially have on Chinese social stability. In 2009, Facebook was banned following the Urumqi riots where activists used the social network to mobilise participants.
Now, there appears to be a distant rumbling on the horizon with indications that Facebook may be attempting to renegotiate its way back into China. Facebook CEO Mark Zuckerberg has made several trips to China in recent times along with COO Sheryl Sandberg. With reports that they have opened an office in Beijing, Facebook has been in discussion with government officials about the benefits of Facebook, particularly its advertising platform, to businesses in China in an effort to woo them in the hopes that they may relax their strict internet policy guidelines. Zuckerberg was made a board member of Tsinghua University in Beijing where he held a talk with students there in October. His rapport building efforts may position him such that his company’s positive relationship with China will only grow.
Although Facebook already ‘unofficially’ has over 800,000 users registered in China, pundits suggest that if Facebook was able to reach some kind of agreement with the Chinese government it would still be unlikely that Facebook would be the same in China as it is elsewhere in the world. Most likely it would involve a localized set-up possibly involving a partner such as Baidu or going to lengths to manage and screen content for local consumption. Additionally, the dominance of existing Chinese social media applications, mainly Sina Weibo and WeChat makes entering the market that much more difficult.
In a similar vein, Twitter is pushing to make inroads into China. Now with a sales office in Hong Kong, Twitter proximity has it looking closely at China’s big business. Many Chinese companies already use Twitter such as Lenovo and phone maker Xiaomi. Even state owned companies such as Air China and media outlets like People’s Daily use Twitter in order to reach audiences outside China. Having a sales office in Hong Kong will allow them to increase their operational effectiveness as well as target other large companies such as Alibaba and Huawei. Twitter remains smaller in scope than say, Facebook, so for them a primary goal remains increasing their brand salience and ‘top-of-mind’ awareness in the Asian region and with an office in Hong Kong this is certainly easier than before. The opportunities are immense as half of the world’s mobile, internet and social media users are in Asia. Three quarters of Twitter’s users are outside the US but only one third of their revenue comes from outside the U.S.
Another part of both companies’ strategies rely on the software tools that both companies possess. Through building relationships with developers in China, of which there are many, they are able to increase their presence through indirect means. Twitter’s subsidiary MoPub, which places ad content inside mobile apps is one way Twitter is fostering developer relations. Facebook has more application development partners in China than anywhere else in Asia and China currently makes up approximately 20% of their network. Shanda Games, China’s third largest online games company, is working on various titles for Facebook users – a clear sign of China’s importance to Facebook. In fact, app installs form a core part of Facebook’s business model. Facebook has access to the majority of markets around the world and it’s these markets that Chinese app developers and start-ups covet the most.
Some are critical of Zuckerberg’s efforts, particularly Chinese activists, pointing out his lack of understanding of Chinese culture and his general pandering to government officials. For now, the possibility of operating freely in China with the government’s blessing remains unlikely, however, despite both of these issues, both companies appear to be moving forward and making inroads into the Chinese market – even if it’s currently through other means. Until such time as an agreement can be reached, advertising, software development and general rapport building appear to be the order of the day. The Great Firewall of China may still stand (for now) but in the meantime there are still a vast number of opportunities in China.