Benjamin Joffe, Managing Director of Plus 8 Star
With years of experience behind him in the mobile industry and in Asia, Benjamin Joffe of Plus 8 Star gives his insight into the differences between social networks in the US and Asia. Benjamin also gives an interesting perspective on how QQ turned an online social network into a paying business model, and his advice to those hoping to enter the Chinese market. Here is a great presentation about Asia social networks and applications by Plus 8 Star.
Interview Transcript Summary:
Can you start by telling us a little about yourself?
I’ve been working in China/Korea/Japan for the past 8 years; we mainly cover mobile and telecom. I’ve worked at major companies and startups, and now I help foreign and local companies to understand new models and local innovation.
What’s the difference between U.S. and China (Asia) social networks?
Social networking is an interesting topic, it looks very new but it’s not necessarily so new. To name one example that has gotten quite a bit of coverage is a site from Korea that started in 1999 and which is a trust-based real name social network site. What’s interesting is to see that some models have not been explored in other countries.
Major difference between the two countries result from local economic environment as oppose to technical and social environment. In the U.S., there’s a very strong established online advertising market, so whatever you do on the internet, the tendency is to get the easy money and go for the page views. In China, the online advertising market is not that big, last year was $1 billion and most of it was controlled by portals like Sina, Sohu, and search engines Baidu and Google.
The interesting case is QQ, which today has 300 million active accounts with 700 million registered accounts. When they first started 1997/1998 with the concept of instant messaging like ICQ, QQ was not the only company doing instant messaging, but most of their competition dropped out in the next few years when there wasn’t any revenue or business model for instant messaging. QQ was one of the few that stuck around and built their platform around special needs for users and charged users for personalizing their accounts and user spaces. They have a dozen ways to pay online currency. This innovation came about due to the lack of a solution.
What advice can you offer U.S. companies in this field that want to come to China?
For foreign companies that want to come to China and do social networking, first ask them “why do you want to come?”. Most of foreign social networks using the traditional advertising model will not work in China. Last year, QQ revenue was 500 million on barely 13% coming from advertising. QQ is such an overwhelming player, anyone that comes into this field will face stiff competition. If you come, you need to know that for each successful U.S. service, there is at least one local player that’s doing pretty good already. If you take a player like Facebook for example, there already exists the local competitor of Xiaonei which has raised more money with 400 million USD. So, you better do your homework and do a thorough study of the local market and local model. You need to do something that has an angle that the locals don’t have yet because it’s a very tough market.
How can we find more information about your company?
Go to our website: Plus 8 Star, there’s a lot of information on there.
