CNET buys XCAR for US $10 million: Chinese social media is booming

According to Pacific Epoch (via Netease), it is rumored that CNET bought XCAR for US$10 million. XCAR is a massive automobile site filled with consumer opinions and experiences regarding automobiles. We estimate it has about 1.2 million messages a month written on its BBS. I would not be surprised if we similar deals for industry specific sites such as Younnet, which focuses on mobile phone conversations. These sites all attract the most active, interest users and fans of these industries who are definitely desired by advertisers.

The rumored Xcar deal follows a trend in investment demonstrating that VC's are recognizing and fueling the tools and platforms of Chinese social media and net culture:

• Toodou (video uploading): US $10 million
• Dianping (consumer reviews): US $10 million
• Bokee (blog service provider): US $10 million
• Blogcn (blog service provider): US $10 million
• Qihoo (BBS/Blog search): US $20 million
• Mop (BBS site; China's Myspace?): US $58 million
• Teein (BBS/Blog search): US $20 million

Leading social media Jeff Jarvis writer sums up social media, as a threat to traditional media:

Today, a [media] network is born with every link. When you recommend shows to friends, you’re a channel. When your blog links to good reading online, you’re a magazine. When you share your iTunes playlist, you’re a DJ. Today, everybody’s a network. . . .

All of this money indicates that this new"publishing" industry in China, run by 123 million consumers, is booming.

Crisis 2.0: China vs. the West

In the "old days," a company crisis would typically start in traditional media, and then would be amplified via copy/paste on BBS and blogs. "Black March" of 2005 with SK-II, Heinz, KFC and others offer plenty of examples. This is what I call Crisis 1.0.

Now, more and more, crisis' are actually starting on BBS or blogs. In the US, it started with Kryptonite. Then, Dell Hell, and more recently Comcast and AOL. This is what I call Crisis 2.0 (get it? kinda like Web 2.0).

ESWN has a great overview of some differences between Western Crisis 2.0 and China Crisis 2.o. Man, I wish I could of written this...he is right on the mark.

While he is describing "Internet Manhunts," the same can be used to describe brands that become the targets of net consumer rage

....these events are mobilized on the large Chinese BBS forums with tens of thousands of comments per hour. By contrast, Americans tend to visit personal blogs which are less connected, coordinated and cohesive. Thus the scale and ferocity of the Chinese manhunts are unmatched anywhere else.

Regarding examples of companies coming under attack in China, ESWN points to an attack against Netease. Previously, I wrote about VW. Also, Dell has had its problems recently. I actually don't think we have yet seen the true fury of a Chinese mob against a brand, but as I said in my post on VW, I believe it is only a matter of time.

Net stars dominate Chinese web searches

Hat tip to Virtual China for reminding me of Fu Rong Jie Jie, the number 4 most searched person on Baidu. This made me take a closer look at the Baidu list, and interestingly HALF of the top 10 searches are net stars. If you count Huang Jianxiang, which you could due to the buzz he created with all the videos, ringtones and audio clips he inspired, we would have 6 out of ten. There are even more in the 2nd group of ten, including Dodolook.

Interestingly, 4 net stars beat out Chairman Mao.....

List is below (for July 17, 2006). You can find most updated list here.

Net stars have ** and are in red.

1. **欲望女神 (Yu Wang Nv Shen): The so called “Goddess of desire," being positioned as a new competitor for Er Yue Ya Tou.

2. **二月丫头 (Er Yue Ya Tou): The hot net "calendar" girl from recent months.

3. 黄健翔 (Huang Jianxiang)

4. ** 芙蓉姐姐(Furong Jie Jie): (She just won’t go away)

5. **郭敬明 (Guo Jingming): Famous writer accused of plagiarism with NO.11 blog on Sina.

6. 丛飞 (Cong Fei)

7. **韩寒 (Han Han): Writer with NO.5 Sina blog

8. 高莺莺 Gao Ying Ying

9. 毛泽东 Mao Zedong

10. 张艺谋 Zhang Yimou

What this means is that consumers are taking control of their own entertainment. No more spoon fed, boring shows from traditional media. These are stars chosen by the people for the people. Certainly, net stars are not unique to China (think Star Wars Kid and the star making power of Youtube in the West, i.e. see here). However, I think net stars are much more mainstream in China than the West. Ask the average white collar worker in the US if they know the Star Wars Kid, they probably won't. Ask a Chinese white collar worker if they know Back Dorm Boys or Fu Rong Jie Jie, they most likely will.

Check out a comparable buzz analysis from the US. There are no Western net stars anywhere to be found on Google's monthly Zeitgeist (see here) or its weekly Zeitgeist (see here).

In a related note, XuJingLei, the actress/director who is also the most influential blogger in the world, was recently chosen by AMD as a spokesperson. Part of the deal was to direct a commercial which you can see here (I love the fact that this blogger took a video of their TV to capture this).




What is important to note is that the commercial stars XuJingLei the Blogger, not XuJingLei the Movie Star. Also, the whole premise of the commercial is based on the idea that with the AMD processor, you can post blog comments faster. This is represented by the Chinese social media term of "grabbing the sofa" or "抢沙发" (the term used describe the effort to place the first comment on a blog or BBS post, a point of pride for many). The fact that a mainstream TVC can be targeting and based upon blog culture speaks volumes about the impact of blogging culture on Chinese popular culture. Just one more indication that blogs, BBS and social media overall are moving fast into the mainstream in China.

Planes, trains and automobiles: VW Polo GP too elitist for Chinese netizens

VW Polo is a vehicle for the elite? I don't think so....and neither do Chinese netizens.

Recently, VW put up some advertisements in Shanghai subway stations that gave the impression that subway commuters should be "aspiring" Polo GP ownership so they can overcome the seemingly working class subway. The reaction of netizens was fierce, and as netizens are apt to do in such situations, one poster came up with their own PS versions of the ads juxtaposing the original VW ads with their own text copy added to Gulfstream Jet adverts.



It would be interesting to see what some of the large number of Polo fans say about these ads. As far as fan clubs go in China, VW seems to have the most, with Polo leading the way. See here for one.

Of course, this is not the first time a car company's ad has been deemed offensive and received some creative PS treatment in China. Toyota in 2004 had a series of extremely offensive ads that stoked the nationalistic fire that is always burning on BBS.

Brands are quickly learning that consumers are not limited to calling in complaints to customer service departments where they will be heard by one person within the organization they may or may not do anything. Consumers now have a voice that can be broadcast to the masses. In fact, calls to customer service can actually be broadcast to the whole world via the 'net as AOL and Comcast discovered recently. See the videos here and here. Do watch these. They are very funny, extremely embarrassing for the companies and have created a national sensation in the US. See MSM articles here and here (free registration req'd).

Such events are becoming the norm in the US, with blogs dedicated to consumers' rights like the Consumerist. I fully expect this trend to continue in China, and perhaps even surpass that of the US. China has all of the components necessary: penetration of mobile phone and digital cameras with video capability, easy to use video sharing sites like SeeHaHa and YoQoo, and increasingly vocal and active consumers (just ask Dell and Taobao).

Mark my words: before the end of this year, at least one consumer somewhere in China will become a national sensation just like Vincent Ferrari did with AOL in the US with a BBS or blog post detailing a complaint or negative experience.

Related articles:

• See all Polo/Gulfstream ads here
• Xinmin article about the situation here.
• Auto163 forum BBS article about incident with 130,000 Page views here
• Shanghai Daily article about the situation here (now dead unless you have subscription)
  

CIC data and WOM discussed in China International Business Magazine

See here. BTW, "CIC media" is in fact "CIC data"

The difference between monitoring and synthesizing BBS and blog conversations

Tangos of China Web 2.0 fame recently discussed the increasing number and effectiveness of social media (i.e. blogs and BBS) search engines in China such as Qihoo. While none are (yet) as good for Chinese as Technorati or Icerocket is for English, they are getting better.

Tangos writes (my translation):

The emergence of these tools provides effective means for enterprises to monitor consumers' feedback while at the same time enable consumers to know others' comments allowing for the spread of information. For companies, these tools are a double-edged sword. There is a greater need for companies to pay attention to and learn how to use these tools.

While I agree tools such as Qihoo will be useful for companies to monitor consumer conversations, "monitoring" may not be enough.

Mike Manuel, one of my favorite bloggers and a well respected social media PR thought leader in the US, suggests, in reference to blog popular search and tracking tools in the West such as Technorati, Blogpulse, Icerocket, Sphere etc.:

Yeah, there are tons of tools and tactics to streamline the process of discovery and tracking but *synthesizing* all this information and determining what's actionable vs. insightful vs. plain wasteful is a time-intensive task.

Monitoring is hearing. Synthesizing is understanding.

Coming from an agency that "gets" social media, Mike goes on to suggest that PR agencies who want to help their clients synthesize "edge" conversations face a challenge because due to the fact that "synthesizing" is time consuming, it is often delegated to the lower ranks within the agency. However, these lower ranks do not have the experience or skills to actually know what to know what to do with the information:

More often than not, you need to find, synthesize, strategize, then react. And you need to do this relatively fast.

In other words, that college intern might be able to count conversations and post a few messages on BBS, but you don't want to leave it to the kid to determine your PR strategy for this new medium (and you do need a strategy). Just ask Colgate or Dell (Chinese or English)

You may not even want to leave this up to your PR agency. We have found that in China, while there are exceptions, PR firms (both local and international) are still stuck in a very traditional media relations and event planning approach. While some do recognize the need for understanding social media, very few are doing much about it.

Furthermore, as I suggested previously in commenting on another Tangos post, while tools like Qihoo are a great place to start for tracking social media, for many companies, even if used wisely by experienced professionals, such tools may be too limited to adequately cover the Chinese BBS and blogosphere which in my opinion is even more varied, large and dynamic that in the West.