Teenagers are apt to experiment, and the Chinese are no exception. iPartment, or “love apartment” (爱情公寓) in Chinese, creates an online home that appeals to young, affluent women (about 60% of the site’s users are female). “The logic is [as] straightforward as ‘Boys like girls, girls like iPartment,” they write at The Little Red Book. If boy wants girl, he had better signup for iPartment, and not forget to water the virtual flowers and feed the virtual dog!
The ultimate experiment in digital love is for boy and girl to move into a virtual apartment together. Shanghai University student Gao Yi, 23, wistfully told China Daily: ”If the relationship with my boyfriend (on iPartment) deepens, I might go out and see him someday.” But if Gao Yi never goes to see him? Irrespective of their real lives, iPartment aims to make young women (and their suitors) feel at home, online.
Are Ladies Luring in the Men?
iPartments are a hot digital property. In 2003, iPartment was launched in Taiwan where it has 1.8 million users. In 2004, iPartment entered the mainland where it now boasts over 20 million registered users.
Moreover, the ladies are certainly luring in the men in suits, the investors. A first round came in 2005 from IDT (Acer Capital), a second round of about USD 3 million in 2006 from Japanese firms JAIC and Cyber Agent Company, and a third round of USD 8.5 million in 2007 from a Singaporean investor. The company is targeting an A-shares or Hong Kong listing in one to two years. The “Ladies First” strategy is working like a charm.
Girls Just Want to Have Fun!
The main attraction is the decoration of a “love apartment” and the search for someone to share it with. But girls like accessories too and iPartment boasts a number of accessory features: pets, diaries, gardens, and games (like Parking Wars and Friends for Sale!) These simple SNS games are already ubiquitous across the Chinese internet, but one iPartment rep comments, “it’s like knowing one nasty character and one dear friend. With the former, even a feast might be disagreeable. But with the latter, sharing just an apple would be indescribably marvelous.” Cheers to like-minded communities.
SHOW ME THE MONEY!
Monetization is the existential question for SNS today. Fortunately, iPartment is better positioned than most. The company is already profitable, a rarity amongst SNS, with revenue of $3 million in revenue for 2008 and an expected $10 million for 2009.
On the Chinese mainland site, 80% of revenues come from advertising. Leading brands also lust over iPartment ladies: Dior, L’Oreal, Estée Lauder, Avon, Nivea, and Lancôme all want a piece. Advertising ranges from traditional banner ads and sponsored sections to in-game items and promotions (e.g., Starbucks promoting a new store opening). Starbucks, Adidas, Samsung, Aupres, Acer, HP, and Nescafé also all have stores on the “iPartment block.”
The remaining 20% of revenues come from micropayments & memberships. With VIP membership (10 RMB or 1.50 USD per month) a user has access to free and exclusive items and is featured in search results. For example, the site has piggybacked on the explosion of farming games (see our coming BloggerInsight post) with a flower garden. Ordinary members: 3 flowers per day. VIP members: 6 per day!
An iPartment rep comments, “[the daily watering and harvest] creates a form of dependence. Our flower garden’s most vigorous user has already surpassed 16,514 virtual flowers—you can imagine our users’ enthusiasm!” Micropayments are testament to the site’s addictiveness: “water your flowers everyday lest they wilt.”
Virtual Property for Real Money
On the Taiwanese site, the revenue sources are flipped: 80% comes from micropayments & memberships, 20% from advertising. Users are younger and richer, and the site offers more premium items. The Chinese mainland iPartment is focused on growing its 20+ million userbase (already more than 10x Taiwan), but “virtual property for real money” is clearly the model of the future.
Can iPartment conquer the world? Chinese SNS game developers are eyeing the Facebook market, where “FarmVille” has followed in the footsteps of the Chinese game “Happy Farm” and exploded in popularity (see our coming BloggerInsight post).
But the cultural translation challenges are much higher for an SNS platform than for a game. iPartment captures a certain Chinese lifestyle that might not fly elsewhere: “Honey, did you feed the online dog?” sounds like a tedious demand of Western internet users, even if pet food is but a click (and micropayment) away. A potential expansion to Japan was once reported in the media, but that is no longer in the immediate plans according to iPartment. For now, China’s 1.3 billion potential tenants will have to suffice.
Contributed by Kai Lukoff & Ying Xue.