What was interesting and memorable about 2009?

Interested in your answer to this question.  To jog your memory, we compiled our “best” posts of the year.  Here’s part two of our “CN Reviews Best of 2009,” covering the topics we touched on in the second half of 2009 (including some stuff in June).  Part one is here.

People

In June, Kai brought us up to date on what happened to Chai Ling, the controversial TAM incident protester turned software company executive.  She brought defamation charges onto the filmmakers of the award-winning documentary “The Gate of Heavenly Peace” where “she arguably came across as a sniveling self-centered, power-hungry, emotional wreck quoted as secretly desiring bloodshed to advance her ends.”

In June, Kai also covered Barcamp Shanghai (coverage overview) and TedxShanghai (coverage overview), including some write-ups of:  Jenny Bai on Youth Pop Culture and how make China cool;  Renee Hartmann of enovate on selling to the China youth Market;  John Fan on the challenges of serving the China’s internet market from a Taiwan base;  Toine Roojimans on payment systems in China;  Gang Lu, on the overall state of the social internet in China;  Stefano Negri of McKinsey on China’s rapid urbanization; and Andrew Yu on how travel can be transformative, and his NGO 1kg.org

In July, Kai met up with Tania Branigan, correspondent of the Guardian, and spoke about her experience covering the Urumqi riots and the general topic of Western coverage of China.  The Guardian also did an excellent piece called China at the Crossroads which includes video and photography from colleague Dan Chung who also posts at DSLR News Shooter blog and did a great timelapse and slow-motion video on the National Day parade in October.

In August, I met up with Rebecca MacKinnon and wrote about her perspective on the internet’s uncertain future globally and US-China relations.  I also noted that prominent Chinese tech blogger Keso was suspended from Twitter, probably because the use of VPN services, and shortly after we publicized this, his account was reinstated.

In September, Thomas Friedman wrote an editorial contrasting China’s “one-party autocracy” with the U.S.’ “one-party democracy.”  Here’s an excerpt of his post:

Watching both the health care and climate/energy debates in Congress, it is hard not to draw the following conclusion: There is only one thing worse than one-party autocracy, and that is one-party democracy, which is what we have in America today.
One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century. It is not an accident that China is committed to overtaking us in electric cars, solar power, energy efficiency, batteries, nuclear power and wind power.

This drew some reaction from Richard Berger at Peking Duck who felt that Friedman was papering over the significant flaws in the Chinese system:

Namely, that that kind of authority comes only with a very heavy price, and that while the CCP may be “reasonably enlightened” about energy, natural resources and ensuring sustainability, these benefits are balanced, and sometimes far outweighed, by its knee-jerk self-protective tendencies, which put the party’s survival on the very top of its priority list…

We felt that Western reactions to Friedman were largely defensive and overreacting, in a way the flip side of the “easily hurt feelings of the sensitive Chinese netizens defending China’s fragile online honor.” (paraphrasing Kaiser Kuo).

In September, I wrote about Jack Ma‘s speech at the Clinton Global Initiative (see below).  Kai also rounded up the usual suspects in his post about great China blogs that translate Chinese news content, including:  Roland Soong, Oiwan Lam, Bob Chen, et al; Fauna, and Key.

In September, we were 2nd after the WSJ in breaking the news on Kai-Fu Lee‘s resignation from Google, and we broke the news (in English) on the name of Kai-Fu Lee’s new firm, Innovation Works.  We also interviewed Keso on Lee’s transition. BloggerInsight followed up with a poll of bloggers that uncovered a sense of the constraints that Lee was under at Google.

In October, we discovered David Moser’s Blue Ocean Network who profiled Jeremy Goldkorn & Michael Anti and the Chinese blogosphere.

In November, we wrote about Kaiser Kuo‘s speech at TedX Honolulu entitled “Red Guards vs. Rednecks” and the effects of online extremism creating a growing rift between Chinese and the West.

During the 2nd half of the year, Kai also experimented with CNReviews Quotes, where we featured short quotes from:  Elaine Chow, Roland Soong, Josh from Cup of Cha, Alec Ash, Charles Custer, Col. Timothy Reese, Paul Carr, Jeremiah Jenne, Carol Bartz, Andy Keller, Kelly Hammond, and Howard French.

Business

In July, Kai highlighted an Ogilvy China report on the opportunity in 4th-6th tier cities and encouraged entrepreneurs to get out of Beijing and Shanghai to see how life is different in these other cities.  I didn’t even know cities were tiered beyond 1st and 2nd tier!

In August, BloggerInsight posted on the top 4 reasons why Chinese social networking is different.  One insight I appreciated: “Young Chinese netizens view their SNS profiles as representations of themselves to the world, establishments of self territory outside of their parents’ and schools’ oversight. For them, social networking is about standing out and building a reputation in an online world. Local social networking sites do a great job of catering to this need for self-expression.”

Meanwhile, in August I was invited to attend a Churchill Club roundtable hosted by Symbio.  Speakers included: Linda Chen (Partner, KPMG), Jacob Hsu (CEO, Symbio), Harry Shum (Corporate VP, Search Development; Microsoft), and Lip-Bu Tan (President & CEO, Cadence Design Systems, Inc.). My coverage in two parts (part 1, part 2) included some discussion of the nature of innovation in China, the myth of cheap labor (in certain industries), the cost advantages of China eroded by the high cost of senior people and “always having to have a Plan B,” and techniques for retaining staff through rewards on one hand, and guilt on the other.

In September, I attended the Clinton Global Initiative Annual Meeting (CGI) and seemed to be the only blogger/journalist covering the China related news (all CNReviews CGI posts tagged cgi2009).  I posted on the fact that Jessica Alba was there, but no China.   Jack Ma, founder of Alibaba Group, was the only major representative of China.  Together with Grameen Trust, Alibaba announced its involvement in Grameen China.  Also in attendance was  Calvin Chin of Qifang.  Wang Yusuo of ENN Group announced a partnership with Duke Energy to work on clean coal and carbon capture and sequestration (CCS).  There was extensive discussion about approaches toward innovation in social entrepreneurship.

In September, BloggerInsight continued to cover social game trends featuring iPartment, which was designed to appeal to teen girls who, you guessed it, would attract pimply teen boys.  As a result of that post, we now rank #3 in Google for the term “hot teen girls China.”  Thanks a lot, BloggerInsight!

In December, Ying Xue (founder of BloggerInsight) wrote about the future of microblogging in China and her talk at Ad:Tech China.  She was later quoted in a CNN piece about trends in this space.

Life

In June, Baoru (Katherine) posted on a report that Chinese students have longest study hours.  During the Gaokao examination season, Kai pulled together a review of some posts from Wang Jianshuo (1, 2, 3, 4, 5, 6), James Fallows, and Jeremiah Jenne.

In July, Kai commented on the widely read spoof of Chinese journalism by The Onion.  Kai’s take: “While most of the pieces are pretty amusing (some are pretty lame, as if they were trying too hard), I have to agree with Elaine when she concludes that the satire overall falls a bit short from the ludicrous content of genuine state-sponsored Chinese journalism and rhetoric.”  I thought it rang pretty true!

Kai also wrote about Transformers in China and how Chinese netizens saw it as American propaganda.   Roland Soong comments “outlines three arguments for how Transformers: Revenge of the Fallen was a big showcase advertisement for the sale of American arms, propaganda for all countries to cooperate with the United States, and an idealization of American soldiers.”  Will Moss followed up with an Imagethief post aptly entitled “Hard robots, soft power.”

Kai also highlighted a post about FLG persecution by Charles Custer at ChinaGeeks:

There is nowhere on earth we can learn about or read about without bias, but even given the assumption that bias exists everywhere, China might be the worst country in the world to attempt to study if you’re trying to assess the veracity of anything remotely controversial.

In July, the Urumqi riots were well underway, and Kai covered an interesting story about why the Uighurs didn’t get the same love as the Tibetans from the West.  One writer concluded that they were simply “less photogenic.”  Whatever that means.

In September, Kai followed up with a post that talked more about Han discrimination toward Tibetans, inspired by a Chinese writer at Alec Ash’s 6 blog who said “it is not easy to comment on Tibet [for Han people]”

In September, we continued to muse about manufacturing reality with media with an excellent follow up post about The Onion spoof and some commentary from a blogger called the Last Psychiatrist, which basically talks about the propaganda power of media.

We also followed the blowback from the Lou Jing incident.  Lou Jing is a Shanghainese girl who’s father was African-American and mother is Shanghainese.  After appearing on DragonTV’s Jia You! Oriental Angels, she was faced with online racism in Chinese BBSs, translated by chinaSMACK.  However, Kai noted that foreigners attacking Chinese racists reveated their own racism:

Just as the examples of Chinese racism were outrageous were the foreigner comments predictable. In the face of ridiculously ignorant and malicious racism by many Chinese netizens, many foreign netizens flooded chinaSMACK’s comment section with equally ignorant and malicious racism against the Chinese. “A hah! I knew Chinese society was racist!” the chorus crooned.

Chinayouren also offered some commentary on racism in China.

Kai also generated some discussion around Taiwan’s status, weaving between the Straits to say that while eventual reunification is in Taiwan’s best interests, Taiwan currently is a de facto, independent state.

October was the scene of National Day celebrations, which we reported would be larger than the Olympics.  Kai shared a contemplative piece about Shanghai side streets, away from the manufactured excitement of the parade itself.

November brought more commentary on American interference with China’s internal affairs, and Kai’s general indifference to that.  We also talked about the movie 2012 and whether or not it was really praising the Chinese (more youth reaction to 2012 reported by enovateChina).

Yes, Obama made his first visit to China, but we (and Chinese netizens) were more entranced by a beautiful girl wearing red and black.  Wonder if her name is “Creamy.”

In December, Kai shared his experience on overnight trains between Shanghai and Beijing and whether or not to take it vs. flying. Min also wrote about 2010′s Chinese holiday schedule.

Well, that’s what we blogged about.  Pretty sure a lot of interesting stuff happened in 2009 that we didn’t blog about.

What did you find interesting and memorable about 2009?

Last week, I attended the Ad:Tech conference in Beijing and participated in a panel discussion on microblogging, a relatively new phenomenon on the Chinese Internet, as it relates to marketing. The reason microblogging (for example: Twitter, Sina Microblogging, fanfou, etc.) has received so much attention is that the format is fresh to most Chinese netizens and is growing very quickly. As a result, the potential opportunities are worth paying attention to.

Since blogs and web 2.0 hit the world, information no longer spreads merely from top to bottom or from the minority to the majority. The microblog enables information to have more sources and become more diversified and authentic. However, microblogging has not yet become hot in China. There are several reasons for this, such as the controls on the Internet in China (Twitter and Fanfou are blocked), the level of knowledge amongst netizens in China, the polarization of thinking, etc. Microblogging appears ready to explode in China due to its growing energy.

The panel discussion on microblogs began with its potential impact on ads and promotion. As a result, the opinions of attendees on microblogs in general were not expressed. For some, microblogs are a new method of promotion by ad service providers. To web portals, it is a tool to help generate page views. What on earth is a microblog? I am a Chinese blogger and a Twitter user. I am co-founder of BloggerInsight, a startup that relies upon Chinese professional bloggers for social sourced intelligence. From my point of view, the microblog is a simplified version of the traditional blog. It focuses on short length and convenience so that people can post their opinion quickly. It shares many characteristics with traditional blogs in that it is characteristic, social, and passes trust to followers. But it has its unique features as well, such as breaking and hot news that connect people more directly. Blogs and microblogs are not one-way marketing that leads directly to more sales or larger market shares. Blogs and microblogs represent character–and to some extent, the formulaic, industrialized, big brands have unfortunately lost their unique characteristics and are not able to adapt to the microblog. Topics on microblogs are posted quickly, but also fade away quickly as well attracting attention for only a short period. For the promotion of topics that need longer-term attention, it is necessary to use microblogs in conjunction with other outlets such as websites and traditional blogs.

Now back to the panel questions we discussed. The first question asked was whether the microblog is a good or bad thing for ads and marketing.

For brand owners, microblogs are positive as it allows for additional contact with consumers. That is a relatively obvious and positive opinion.

To web portals which need traffic to attract more ads, microblogs are also beneficial. The attention span of modern netizens is becoming increasingly short. With the ability to generate a large number of hits in a short period, microblogs enable new issues to spread faster and attract more concentrated visits. As traffic increases, it can be roughly viewed as a gathering place of readers, which means that it’s a gathering place for an audience to view advertising. As a result, a web portal can sell more ads.

Personally, I believe that microblogs do no harm. To companies that consider consumers God and really want to know about the demands of the market, utilizing microblogs is a way to convey a grassroots feeling and close the gap between companies and consumers. But to those who still have the intention of “educating” consumers and “guiding” the target market, to those which fail to change or listen to the demands of consumers and to those who still place themselves above consumers, microblogs probably represent the beginning of a nightmare as the microblog has the ability to screen information. Information that is unconvincing, not beneficial or boring will not be spread. Every blogger is a processor who selects information he/she wants to spread.

Another phenomenon we have to pay attention to is that the young generation in China has changed its way of consuming information. The impact of ads on traditional media like TV, radio, newspapers, etc is. decreasing and many people tend to say, “Ads are just bragging.” This tells us that people don’t trust ads very much. On the other hand, recommendations from friends and sharing experience via the Internet are booming. People gather together to share good products and warnings of bad products. There is no right or wrong in it–it’s just their choice in the market.

The above are just personal observations, the reasons for which are relatively complex. One point that cannot be ignored is that bloggers want their content to have an impact. They hope that companies openly receive their suggestions and that their value is respected. Those who have high value naturally become opinion leaders on the Internet (distinct from “Internet Stars” who are promoted to entertain netizens).

How to define opinion leaders in the world of blogging and microblogging?

Openly available data include the amount of contributed content, the number of followers, time started, etc. But that information alone is not enough. We are all aware that information no longer spreads in limited directions: opinion leaders are not limited to a few individuals, but can arise from a large number of microbloggers. What’s more, an opinion leader should be someone who has unique perspective or rich knowledge in one or two fields, has been contributing a decent amount of content, and has a large number of active users following him. Generally speaking, microblogs create communities. It’s human instinct for people with similar characteristics or interests to gather together. Microblogs are just a platform that reflects the instinct of the Internet to classify opinions. Those who can gather a community are anything but ordinary. Last but not least, the ability to influence others is actually as important as how trustworthy the content or opinion is. If a piece gets lots of promotion (retweets) once it is published, it shows that people who are paying attention agree with and trust what the blogger puts forward. Then there are bloggers who are rarely trusted, and they cannot get extensive retweets even if they say “Please RT this for me” in their messages.

I want to especially put emphasis on the fact that opinion leaders are not objects for netizens to make fun of, nor are “Internet Stars” there to entertain the public. They are important amongst their community and they are strongly connected to their followers.

Opinion on paying bloggers to write Ads

As to this question, all three panelists disagreed. Let’s look at some facts first. Once there were some companies that closely interacted with many top bloggers and tried to use their blogs as a medium to promote clients’ products. The result was that no company was able to survive through this business model, which shows that this approach to promotion is not appreciated by the market. Ad agency, Blue, also claims that they wouldn’t promote this way. It takes some time for famous bloggers to build up their audience and gain their reputation. Insincere characters and opinions cannot survive or be spread in the virtual world of the Internet. Fake information is not accepted by most bloggers and as a result, it is not worthwhile to write phony articles for money. On the other hand, there are companies who pay bloggers to tell the truth. They ask the bloggers to share their real experience of using a product and express their true feelings to a product or a brand. That is different. Under that circumstance, the money represents respect, not a buy off.

I regret to say that most of Chinese netizens are lazy and are not content contributors.  We are far away from the ideal web 2.0 world, with each netizen as an independent knowledge disseminator. These people are easier to be led and used. They will thus become stepping stones for companies which pursue nothing but profit. Fortunately, I am witnessing Chinese netizens, especially bloggers, become increasingly mature and many networking techniques such as microblogs will bring us together and produce social intelligence, which will soon realize its value in the development of companies. The chance to take advantage of ignorance will disappear and this may catch many people off guard.

“Microblogging, flattening the world” (“微动力，广天地”)

Only those who understand the character of the microblog and its value can truly enjoy this Chinese phrase. It is a tendency for micro values to be gathered and become the energy supporting companies to grow. I would say more and more tech or applications will be innovated to empower social intelligence. BloggerInsight is one of them.

Guangzhou

Min and I boarded a long-distance bus in Guangzhou at 7:55 for what we thought would be a 3 hour drive to Lianzhou. Much of the distance was covered quite quickly on a smooth new highway, smooth enough for me to get some more sleep under my belt after an early morning. When I awoke, we were coursing through the mountains, mountains covered with lush green trees. Then, we were soaring over huge valleys supported by massive columns of concrete rising dizzily through the air from the ground hundreds of meters below. Seeing the latter, I couldn’t help but marvel at how all of this was accomplished, betraying a prejudice against China I have with regards to something I clearly take for granted elsewhere.

The highway ended. It wasn’t finished yet, and as our bus turned onto a smaller, ruttier, country road, we passed by several dozen highway workers piling rocks and pouring cement to form the reinforcing walls for the next small section of what can only be a very, very long highway to wherever it is going. The country road was bumpy, narrow, but still full of cars, motorcycles, and other long-distance busses going to and from wherever it is we’re headed. Unable to sleep any longer, we bobbed up and down over the uneven and spotty concrete road…until the bus came to an abrupt stop behind several cars and trucks also stopped ahead. It was around 11:40am by now, already nearing the four hour mark, already one hour longer than we anticipated…and we weren’t there yet.

Dammit, we’re going to miss the free lunch.

The best part of the bus ride was the old Cantonese couple sitting to the right of us, across the aisle. They were a weathered sort, very rural, but endearing precisely for such characteristics. The old man clearly had become a few fries short of a happy meal in his years. This became glaringly obvious while I was dozing and suddenly sensed his hand reaching over…first lightly patting over my right pocket before moving further over toward my crotch where it briefly hovered like an arcade machine claw being positioned to pick up a stuffed animal prize. I expected myself to panic but, surprisingly to even myself, my hand only quickly, deftly, but also lightly seized his hand and gently returned it to him. His old lady immediately noticed what was happening and was already leaned forward, embarrassed, and smilingly explained in Mandarin to me that his mind wasn’t very clear anymore. I had surmised as much and bore them no grudge, and nodded back with a smile.

Throughout the rest of the trip, the poor woman patiently kept him in line each time he tried getting up and exiting the bus. I wasn’t quite sure why he was so intent on doing so until later when he had given up, pulling a cigarette out and then reaching into his pocket for his lighter. I reached over and tapped on his shoulder, kindly indicating to him that he can’t smoke in the bus. The first few times he listened and his old lady admonished him in what I can only assume to be Cantonese, as she would every time he was setting himself to do something inappropriate for the circumstances he was in. Later, though, he ignored us and managed to light one up, though in reverse, with the filter of cigarette filter flaring up and him puffing vainly from the unfiltered end before the chastising by his wife prompted him to move to the empty seat at the rear with a window he could open, you know, one that would allow the outside wind to circulate the smoke inside the cabin instead of letting it out.

All of this happened throughout the bus ride, both before and after finding ourselves stopped on the country road, unable to continue our trip, unable to turn back. A single traffic cop was blocking the road, stopping traffic. Eventually, after getting off the bus to eavesdrop on the cop talking to other impatient motorists, I learned that a truck and its trailer had rolled over ahead of us and the traffic department would arrive soon to clear the wreckage.

We got moving around 12:30, with everyone rubbernecking past the wreckage site. The truck itself was being towed away while its trailer was still at the bottom of the hill the narrow road was paved on. Suddenly, I didn’t feel quite safe riding on the bus, what with its massive size and higher center of gravity, bouncing and bobbing its way along that narrow road.

Fortunately, we made it to Lianzhou without any rollovers, off the road and down any hills, happening to ourselves. Lianzhou is a small backwater city/town by Chinese standards, but still had plenty of high rise apartment complexes. The banners hung on the light posts lining the streets advertised a developer’s apartment complex, selling for ~1800 RMB (<270 USD) per square meter. Compared to Shanghai where property prices for decent apartments go for 20,000 to 30,000 to 40,000 RMB per square meter, it sounds cheap. But, for Lianzhou, for the city we were beholding, it might actually be somewhat pricey.

It took another 30 minute taxi ride from the bus drop-off point to get to the Lianzhou Underground River scenic area where CNBloggerCon is being held this year. All the while, Min and I were cursing under our breaths over how remotely located the conference was this year, openly wondering how many attendees there might be this year. Min said past attendance was around 300 people, thinking there might be around 100 this year, noting that there were only 39 paid and registered attendees on the official conference website. Cynical and mean, I exaggeratedly declared I’d be surprised if there were 30-50 people. Even if there were more attendees, I wagered the rest of them were lost like us, unable to find where this damn conference is being held in the middle of nowhere.

Lianzhou Underground River, Middle of Nowhere. Quite pretty, actually, after you get there. Half of the conference was (and is being) held in that big hole up there.

Wuhan-native and England educated Xue Ying of BloggerInsight kindly took our calls as our contact, and as the head organizer of the conference. We could imagine how beleaguered by her organizing duties but she made sure we made it to the conference.

She also made sure several lunch boxes were saved for us.

We arrived at CNBloggerCon 2009, around 1:30pm, over five hours after departing Guangzhou, with over half of the the first day’s talks and speakers already over.

The lunch boxes were pretty tasty though.

Okay, not IN the big hole, but right at the MOUTH of the big hole, HERE. Imagine this space with a projector, some banners, benches, chairs, speakers, and conference attendees. Oh, and wifi.

For CNR, however, Min Guo and I will be flying down to Guangzhou later today to attend this weekend’s 2009 5th Annual CnBloggerCon, for which CNReviews an official sponsor. As one of our past contributors, BloggerInsight‘s Xue Ying will also be there as one of the organizers.

While there are foreign attendees, CnBloggerCon is a home-grown affair, a gathering of mainland Chinese bloggers, entrepreneurs, academics, non-profits, and other people interested in China’s online space. In addition to fronting some cash to help make CnBloggerCon ‘o9 happen, we’ll do our best (read: I’ll do my best) to report on the conference’s activities, speakers, and shenanigans. This will be my first time attending so, frankly, I’m not really sure what to expect.

More: CNR’s past China Blogger Conference (CNBloggerCon) coverage.

Hello there!

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.

From a loner in a naked room to a fly guy in a love pad, complete with lady, dog, and stylin’ pink pants. Virtually living the dream.

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.

Funny-looking little ones? 0.8 RMB a piece. Avatar (dress, shoes, haircut)? 4.6 RMB. Garden background? 5.7 RMB. Flower bouquet? 10 RMB. Online love? Priceless.

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.”

Nothing says “I Love You” like a bunch of virtual flowers. Price: 10 I-dollars (10 RMB = 1.50 USD), but free for VIP members!

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.

World Domination?

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.

Kaifu Lee "running away" from Google. Source: YNET

On Saturday, Google China President Kaifu Lee resigned. On Sunday, CNReviews tracked the news on his next step, Innovation Works, an early-stage investment fund and startup incubator. To track the Chinese blogosphere, BloggerInsight asked Chinese bloggers for responses to three questions:

Q1 : Why did Kaifu Lee resign from Google China?

There was early speculation that government politics led to his resignation (which Kaifu Lee has adamantly dismissed), but internal Google politics do seem to have played a role. Remaining at Google China meant enduring continual corporate pressure and cultural conflict. Google didn’t offer him the freedom to grow Chinese entrepreneurship as he envisions it.

Blogger comments:

“Because of the suffocating constraints of a large company, Kaifu Lee was not free to localize Google into China. He was likely a mere figurehead, unable to capitalize upon his abilities or realize his dreams.”

“To outsiders it looks like Kaifu Lee lived the high life as Google China President, but there must have been hardships that we cannot imagine. He mentioned his entrepreneurial aspirations as early as August 2008, but had to shelve them because of the financial crisis. While sick in the hospital this June, he became determined to make his move into entrepreneurship.”

Q2: How will Kaifu Lee’s resignation impact Google China?

Opinions are mixed on how Kaifu Lee’s resignation will impact Google China. While his efforts led Google market share to double (from 16.1% in 2006 to 31% at present), the consensus is that Google still has a long way to go in China.

Blogger comments:

“With the loss of a man of Kaifu Lee’s character and vision, there will certainly be a slight change at Google China. It’s uncertain if his successor will be able to localize Google’s products as well, a key determinant of the company’s success in China.”

“[Kaifu Lee’s resignation] will not have much influence on the competitive balance between Google and Baidu. With its extensive coverage online and in the traditional media, it may even bring Google extra traffic!”

Q3: What can we expect from Innovation Works

Chinese bloggers’ expectations are tempered by realism. Angel investing is in its infancy in China, so it will likely take at least ten years to reach success. Finding a model to identify, assist, and profit alongside Chinese innovators will take time.

Yet that doesn’t stop bloggers from having lofty dreams for what Innovation Works could incubate—if not the next Google, then something close. And if anyone is up to the task, it’s Kaifu Lee. With his extensive R&D background in China, Kaifu Lee has a deep understanding of how to nurture innovation. Perhaps his strongest asset at Innovation Works will be his personal charisma and ability to connect budding entrepreneurs: the next Larry and Sergei with Eric, or Bill Gates with Steve Ballmer.

Blogger comments:

“The primary challenge will be how to screen people. With the domestic education system as it is and the underdevelopment of creativity, Kaifu Lee with have plenty to ponder.”

“Success at Innovation Works will not come easily or quickly. The first concern is that VCs are well-established, so Kaifu Lee will have to convince the market that his model is also viable. The second challenge will be managing relationships. Will young Chinese entrepreneurs embrace his model? How will they share profits? Will entrepreneurs submit to management from Innovation Works, and if so, in what format?”

“The first hope is that he will incubate companies of Google’s caliber with Chinese characteristics. This may just be a dream of course, but it’s a dream shared by all of China’s technology industry.”

Contributed by Kai Lukoff & Ying Xue.

The fact is that Chinese users approach online social networking differently than Western users. In order to stand a chance against local competitors, foreign social networking companies should take the time to understand these differences and adapt their sites appropriately. Here at BloggerInsight, we tapped the knowledge of our expert network and identified four key characteristics that distinguish Chinese SNS users.

(1) It’s all about entertainment – Chinese users rely on online social networking sites as their primary source of cheap, quick, and accessible entertainment throughout the week. As a result, online social networks are used less for practical communication and more for killing time and amusement—whether it’s playing a quick game at work or chatting with other users after school. Take ‘Parking Wars‘ for example – one of today’s hottest games on Chinese social networking sites, especially among white-collar workers. Users earn virtual cash for parking on their friend’s lots and for ticketing their friends when they park “illegally”. After earning enough money, users can buy more expensive cars. Millions of white collar professionals are hooked; many check their Xiaonei or 51.com profiles several times each day to update their parking status. And why? For fun, of course. After all, that is the primary motivation of Chinese netizens when logging onto a SNS.

Chinese netizens are addicted to Parking Wars, a game that allows users to earn virtual currency and upgrade their car model. Entertaining games like this one keep users actively engaged on Chinese social networking sites.

(2) Higher tolerance for intrusiveness – While Western users are often sensitive to “clutter” around their social networking profiles (remember the initial backlash against Facebook’s flurry of new applications?), Chinese users dig the extras that come with social networking platforms. Viral games, contests, forum discussions, and other add-ons drive traffic because young Chinese netizens don’t hesitate to send message after message to friends, inviting them to get involved on social networking platforms. For instance, on a site called QQ Show, developed by China’s SNS giant Tencent, users dress up their avatars and compete in virtual fashion shows. Teens will IM their friends fervently, asking for votes on QQ Show. And while some of us are tempted to label this as “spam,” it’s just another way for Chinese SNS users to engage and interact with each other. As you can imagine, these SNS applications are huge in creating user stickiness and encouraging users to repeatedly visit the site.

Teen netizens use QQ Show to show off their dressed-up avatars and compete in virtual fashion shows. Winning competitions requires votes from friends, introducing a viral component to the QQ platform.

(3) SNS as a public space – Many Western users see social networking sites as an extension of their real-life relationships, and their online social circles often reflect this perspective. Chinese users, on the other hand, are more likely to add strangers via the Internet and generally accept most friend invitations. And instead of keeping online conversations within their own networks, Chinese netizens gravitate toward bulletin board systems (BBS) to express themselves and participate in completely public discussions. As one of our bloggers notes, “privacy is not as important as interesting conversation.”

(4) Building an online identity – Young Chinese netizens view their SNS profiles as representations of themselves to the world, establishments of self territory outside of their parents’ and schools’ oversight. For them, social networking is about standing out and building a reputation in an online world. Local social networking sites do a great job of catering to this need for self-expression. For instance, on QQ – China’s largest social networking portal in terms of user base – users make micro-payments of 1-5 rmb to customize their profiles by purchasing virtual goods, such as accessories, clothing, and new hairstyles. In fact, this handy feature generated a large portion of QQ’s revenue last year.

One of many QQ virtual stores where users can purchase clothing and accessories for their avatar using QQ coins.

So despite foreign efforts to “figure out” the much-discussed Chinese market, local social networking sites are simply cooler and more entertaining to the country’s netizens. Companies need to realize that the cut, translate, and paste strategy will never work for a unique market with its own preferences and idiosyncrasies. New features need to be added, and entire websites need to be tailored and adapted to suit Chinese netizens.

Some additional questions to consider (and we would love to hear your thoughts):

1. Are there any foreign social networking sites that are on the right track to tapping the Chinese market?
2. What will it take for foreign SNS to snag and keep users from QQ, Xiaonei, and other domestic giants?

Contributed by Mindy Zhang from BloggerInsight

Can Apple stay fresh with Chinese consumers?

We’ve all seen young professionals on Shanghai Metro trains, tapping away at  a game of Solitaire on their new iPhones. The iPhone has transformed into a global phenomenon, and China is no exception. Its sleek design, innovative touch-screen, and ability to support thousands of applications have generated over 20 million units in global sales since its original release in 2007. Although the device hasn’t officially launched in China, trend-conscious consumers flock to electronics markets to purchase imported (but completely unauthorized) iPhones from vendors.

For a while now, Apple has been eying the Chinese market, home to the largest population of mobile phone users in the world. But Apple being Apple, making sales requires an exclusive, tightly controlled contract with one of the country’s leading mobile service providers. For the past couple years, Apple has been flirting on and off with China Mobile – the largest provider with over 415 million subscribers – alas, to no avail. Despite the immense opportunity that China Mobile would’ve provided, a battle of egos resulted in both companies backing out of the potential deal.

There have been rumors of recent talks with China Unicom, China’s second largest mobile provider with a less impressive 130 million subscribers. Experts speculate that the two companies have settled on a three-year deal to bring legit iPhones into China, although no public statements have been made by Apple or China Unicom.

An iPhone with simplified Chinese characters, posted by Sina. Apple and China Unicom have yet to announce a finalized deal around iPhone distribution.

Apple’s modern design and well-guarded brand image has certainly made an impression on the Chinese consumers, and there are already an estimated 2 million black market iPhones in the country. Chinese users are willing to go through the hassle of unlocking the phone, purchasing a flurry of adapters and accessories, and suffering malfunctions and technical problems with no warranty – all to possess one of the most stylish new devices. If the authorized iPhone is a hit, China Unicom could benefit from a boost in customers. Chinese consumers use pre-paid cards instead of signing a one- to two-year contract with mobile service providers, so the cost of switching between providers is minimal. China Unicom would ideally use the iPhone as an incentive to snag some of China Mobile’s most valuable customers. Additionally, China’s expanding middle class will generate new demand for affordable luxuries; the China State Information Center estimates that by 2010, 25% of the Chinese population will earn above 50,000 rmb in annual income.

Despite being a coveted brand in a growing market, Apple still faces potential challenges in launching a legitimate version of the iPhone. While China Unicom is planning to subsidize the devices for mobile subscribers, cheaper copycats continue to exist on the market, satisfying demand from the lower end of iPhone aspirants. And in addition to these fakes, electronics vendors are still bringing in unauthorized iPhones and selling them without the burden of import tariffs; some price-sensitive consumers might decide that a lower price justifies the extra hassle. Despite these cheaper alternatives, would enough upper-middle class Chinese consumers be willing to purchase iPhones through legitimate channels? Even if the demand exists, Apple will need to deal with its relative lack of control over distribution.

Furthermore, much of Apple’s success comes from its App Store, where 1.5 billion applications have already been downloaded. Most of these applications range from 1 to 10 USD. In China, users of unauthorized iPhones have downloaded free applications from various websites and bulletin board systems (BBS).  Would Chinese consumers be willing to pay for these applications? Seems like developers would have to charge a much lower price for Chinese versions of their applications.

And finally, there’s the brewing battle between the Apple and Google for presence in the Chinese market. In response to Apple’s contract with China Unicom, Google announced that it would launch two Android-based devices through a partnership with China Mobile. Google’s earlier entry could dampen Apple’s efforts if Android steals potential market share from the iPhone, which is scheduled to debut sometime within the next year.

Contributed by Mindy Zhang from BloggerInsight

Jimdo started as a group of three friends selling basic site creation tools for businesses. The site’s innovative array of creation tools has since developed into a consumer version available in seven different languages (English, Chinese, Japanese, German, French, Italian, Spanish and Russian). Jimdo hosts JimdoFree sites with “dot Jimdo” URL addresses, limited storage and integrated ads. JimdoPro, the premium version, allows users to host their own pages with more storage and no ads.

Almost immediately after launching, Jimdo brought it’s Pages to China by way of George Godula, who attended university with one of the company’s founders. Seeing the huge potential of the site for China’s small companies–most of which do not have a Web presence–George and Web2Asia, a market entry consultancy firm he runs out of Shanghai, jumped at the opportunity to fill the gap in the market. There were over 31.5 million small companies in Mainland China in 2006. Reports indicate that the total number of small to medium sized enterprises will reach 50 million by 2012. Currently, around 70-80% of these small companies do not have a corporate website, with high costs being the main inhibitor for them to be online: fees range from 2,000 – 10,000 RMB. Small companies also lack the resources to have professional technicians for the maintenance of their sites. Clearly there was a great demand for easy, inexpensive, DIY site creators in China.

In just two years, Jimdo has been used to create over 100,000 personal and business sites in China. Jimdo was instrumental in expanding the reach of businesses and in providing a means by which people in China can connect with more people. Check out the site of this 70-year-old retired teacher, who despite not being able to pronounce Jimdo is one of its biggest fans.

JimdoPro landing page

Coming to China was not without difficulties and setbacks. Jimdo competes with large Chinese players like Sina and Sohu in the personal space/blogging market. Stiff competition also comes from other DIY site creators, with the biggest being state-owned and backed NET.cn. According to George, a key lesson in localization for Jimdo was to “prepare for a much longer timeframe than for other countries.” As such, it was imperative to manage the expectations of headquarters in Germany: ROI will take time. Taking the local situation and preferences into account, the China team found that scaling Jimdo required targeting the business community. Unlike Europe, where private users tend to spend more money for their personal websites, it is much different in China where free options for websites are plentiful. People were not interested in paying for JimdoPro pages. For small businesses, however, there was great appeal in affordable professional-looking websites that were easy to set up and maintain.

The company is now undergoing a total shift in strategy, targeting businesses more because Jimdo offers a low priced solution for this market. Jimdo gets businesses on board with its new landing page which includes video on the features and benefits of the product. It also beefed up its marketing efforts in three key channels: 1) paid keywords on search engines, 2) affiliate and resesller program and 3) BBS marketing and online PR.

“Content management was one of the hardest lessons learned,” says Sam Fan, Jimdo Country Manager in China. The Chinese government’s censors blocked the site for three weeks in its first few weeks of operation because content deemed inappropriate and vulgar was found on Jimdo-hosted sites. Jimdo is now vigilant about user content control, putting filters in place to swap out controversial words.

The team at Jimdo China continues to localize and tweak the product for the Chinese market. With the help of BloggerInsight and its network of expert techies, Jimdo was able to pinpoint exactly what needed to be changed for local users.  For example, while the current design templates were positively received, Chinese users did not like the fact that they were pre‐populated with content that they had to delete before personalizing it themselves. This problem will be remedied soon.

Jimdo user interface

Jimdo China’s still got much to do. In the pipeline are plans to implement more features to make the site more business-focused, encouraging even more of China’s small enterprises to build their web presence through Jimdo. There will also be improvements to user experience such as web-based restore points for backing up content. Expansion in Asia continued with a successful launch in Japan through KDDI Web Communications, a subsidiary of Japan’s second largest telecommunication corporation KDDI. The Japan deal is Jimdo’s first with a publicly traded company. More Asian countries are in the works.

Even new start ups can go global and bring their product to China. If you have the right technology and the right niche, making the move to China might be a good idea. Of course, you need to have have your eyes and ears on the ground to get a good idea of the market realities; Jimdo’s got the right idea with support from headquarters in Germany and its team in Shanghai.

Contributions by @MikeFung and Ying Xue

Enter co-working. Co-working is working independently with the added of advantage of possible synergy that can take place when you put innovative and talented people together in the same room. These people share one big office space with perks not available at the coffee joint or at home, such as conference rooms and opportunities for networking and socializing. Co-working sites generally charge daily and monthly rental rates per workstation.

This new trend in working started in 2005 in San Francisco where an inventor and open-source software developer coined the term “co-working.” BarCamp, another trend in the era of Web 2.0, also lent inspiration to the current co-working model. BarCamps are user-generated conferences, organized around a shared interest, where participants bounce ideas off one another. Wouldn’t it be great if going to the office was like going to BarCamp everyday?

From San Francisco, the work model came to Shanghai as an increasing number of intrepid entrepreneurs and independents look to do their own thing rather than pursue careers with large multinationals and state-owned enterprises. According to official figures in the annual employment report, since 2002 the number of freelancers in Shanghai doubled to 564,900 by the end of 2007, representing over 6% of the overall workforce.

Both 88 Spaces and Xindanwei offer the amenities available in traditional office settings, such as workstations with ergonomic chairs and ample table space, conference rooms, pantries stocked with coffee and tea, printers, copiers and fax machines. The rates are 100 RMB per day and 2,000 RMB per month. Commemorating its launch in late June 2009, 88 Spaces is offering a Founder’s membership rate of 10,000 RMB for half a year. The sites will also host monthly events for members and their friends as part of their community-building and networking initiatives. With exciting sites like 88 Spaces and Xindanwei setting up shop, the future looks bright for Shanghai’s entrepreneurs.

Xindanwei. Photograph by Luo Hao.

We at BloggerInsight recently moved to our new home 88 Spaces, an awesome co-working space in the heart of downtown Shanghai. Since our inception over a year ago, we’ve been based out of our homes, coffee shops and the web2asia startup incubator. Fully incubated now, we’ve got the chutzphah to set up camp at 88 Spaces where we are thrilled by the prospect of joining a community of likeminded techies, geeks, creatives and entrepreneurs.

Contributed by Mike Fung, Ying Xue