Written by While we regard eBay, Amazon, Yahoo!, Google and other American web sites as effective case studies internationally, what we have observed in China is just the opposite. American web sites in China are essentially the model of failure. It can be said that their Chinese rivals’ success is built on abandoning the American experiences and practices. In my opinion, American websites’ failure in China is because of their operating ideas. They have good methods, probably the most intelligent individuals, the most money, the best technologies, but that does not change the way of performing things. 1. Preferring white-collar bourgeoisie VS Welcoming the mass population This will be the fatal weakness of American web site companies in China, but so far couple of them have realised this point. Amongst those people who operate American websites, senior executives are from HK and Taiwan, while employees are white-collar workers in Shanghai high-rises. All they know about China is the CBD of Shanghai, therefore all practices consist of item style. Website style and target audience are for white-collar workers in Shanghai and Fortune 500 companies. They will by no means consider demand from common, public and little to medium companies. Their upbringing, interest and vision make them exclude the public at heart. American web site employees are deeply disdainful of those guys in Internet cafes, those thousands of Web users in little cities and towns all over China (note that these 2 groups account for more than half of the Chinese internet population). Superior American website white collars not just dislike them, but also really hate them. They only know Gmail, not 163(Netease) mailbox; only MSN, never use QQ(Tencent), in order to show their superiority. At heart, they feel that they would rather let the web sites close, than building a web site that meets the public demand with no “taste”. Should you want to be a mainstream Chinese website, not meeting the public demand is doomed to fail. 2. To be forgotten VS To be hated The former is the philosophy of American websites, the latter is the philosophy of Chinese internet entrepreneurs. While American websites fear a single piece of negative news, Chinese websites fear there’s no negative news. Becoming hated by thousands of individuals is the highest realm of Web promotion. American web site staff has 10 occasions much more salary than their Chinese website counterparts, hence being afraid of losing their jobs. They would rather deliver no performance, than taking risks and generating errors. They are low-key, conservative and cautious. Everyone is polite and educated, but with no competitive mentality. As a result, they’re beaten to the ground by their sharp and fresh Chinese rivals. Take a look at the offensive stance of Ma Yun (founder of China’s greatest B2B website, Alibaba.com) more than eBay. While Ma’s Taobao.com was still far behind eBay in China, he had declared Taobao the biggest in China. The PR executive from eBay China could only have responded like “we only focus on user experience”. Ma even stated that “I couldn’t see a competitor even using a binocular”. EBay staff were afraid of making errors and saying the incorrect thing. Thus utilizing excuses like “US listed companies cannot make discretionary comments”. 3. Long lasting war VS Quickfire actions American websites usually have long-term planning and spend loads of money on useless marketing research. They strategy strategies and budgets for the subsequent few years, and they’re too rigid to adjust effortlessly. They can have lots of cash and talent at the beginning, and slowly plan and develop things. Regrettably, websites aren’t like other industries, where numerous multinationals adopt a technique of generating losses for 10 years after which turning a profit. This is not operating in the Web business, in much less than 10 years Yahoo! and eBay had already failed in China. So rather than performing it slowly, it would be better to fire up at the initial starting. The Chinese websites are usually looking for quick success, so their idea would be to do things merely and quickly. Ma Yun could organize “death squads” to build up Taobao in closed offices. Everything was for the objective of being quick, focusing on small step sprints, making improvements together with errors. American websites could do ideal planning and budgeting, but could not approve anything effortlessly if it’s not within the spending budget. Such way of needing American headquarters’ approval for everything is domed to fail. 4. Indicates important VS Objectives essential. Jack Ma’s management style is stated to be rather rogue. He set a goal, like web site traffic or registration volume, and let his team work towards it utilizing whatever indicates. As long as the objective is reached, individuals could be rewarded significantly. As a result their teams dared to use all the accessible tactics, including plug-in, bundling, promoting unethical web sites, and so on. The gospel of numerous Chinese websites is “means to never matter. Objectives are everything”, as long as it is legal. American web sites have so many performance criteria and guidelines. They first have to preserve their high finish brand images, safeguard their multinational faces, and possess noble professionalism. Only beneath these prerequisites can they pursue numerous short and lengthy term company objectives. five. Becoming users’ saviour VS Meeting users’ demand Perhaps the only factor worth learning from American web sites in China is that they’ve much better focus on the user encounter. However, this is usually overshot, too considerate for users, hence restricting self-development. Chinese users occasionally don’t need to be treated too friendly and too considerately. They’ll make their own choice, not the other way about. Do you know why ICQ failed in the Chinese market and exited? American individuals really care about protecting users’ privacy. For ICQ’s Instant Messaging product in China, logged-in users cannot retrieve their prior conversation history from an additional computer. This could certainly safeguard users’ privacy. However, it is much more suitable for a handful of Internet users at the house, rather than the vast majority of Webclients. ICQ most likely still had no concept about this when they were withdrawing from Chinese market. Ma Huateng, founder of Chinese Instant Messaging product Tencent QQ, was merely the technical contact person working for ICQ’s Chinese partner business at that time. But he discovered Instant Messaging technologies as well as the preference of Internetcustomers in China (American website employees would never look at Internet cafes). Following Ma corrected the pitfall, which will be the privacy problem only cared about by middle-class white collars, he subsequently kicked ICQ out of China. 6, Becoming magnificent VS Becoming well-liked American websites’ promotion in China is always magnificent but unpopular, and they amazingly share a similar mentality when it comes to marketing. They employ advertising agencies to style stunning posters displayed in subway stations and bus stops. They also style online ads that target the minority white collars, invest a lot of money advertising on three major internet portals, and pay for costly Google keywords (not Baidu key phrases, American web site employees only like Google and MSN). As a result, individuals applauded their ads, but never visited their web sites. User acquisition costs nearly amounted to 1000 yuan (about US$130) per visitor. Despite minimal traffic growth, they would nonetheless claim “brand building, brand awareness or brand image” as excuses. But Chinese’s rival web sites always place traffic as a priority, believing “a penny brings a visitor” with regards to website promotion. They don’t care who the visitor is, so long as these individual visits their websites. Real traffic numbers are pragmatic brand promotions. Those empty and useless brand pictures can’t turn into earnings. The sole objective of promotion would be to bring in visitors, and it is up to people to determine the merit of the products. To ensure that is the leverage. 7. Passive promoting VS Active pulling American style marketing emphasises brand awareness, such as outdoor posters, which is tough to activate the marketplace in China. Pragmatic Chinese competitors would hardly ever use advertisements merely to establish brand images. They like engaging in high-profile “pull” propagandas, not just producing the direct benefits, but also improve the public awareness, even forcing people to pay attention to. Mr. Gong Wenxiang, a Chinese brands expert, has compared the on-line advertisements of Taobao and eBay. He commented that they each utilized banners to display their featured goods with similar ad costs, but Taobao’s result is 10 occasions eBay’s. EBay displayed things like iPods and Zippos, that are targeting high end clients. Common public with no English ability could not understand it, nor could they afford to buy those things. On the other hand, Taobao advertised eye-catching products like sexy underwear, and thrilling weblinks continuously popping up. Individuals simply can’t get away from them. American website employees may nicely know about this, but their “turtle (overseas educated)” mindsets can’t accept it: I would rather spend a billion yuan on an elegant campaign to bring in a million visitors, than spending a million yuan on a vulgar campaign to bring in a billion visitors. So when the American websites’ marketing result is only 1 tenth of their Chinese counterparts’, failure is inevitable. 8. E-mail, msn communication VS Telephone, face-to-face communication 90% of the communication indicates in American website businesses are emails and MSN, and these individuals are all pleased to communicate in English. 1 problem which could have been solved by 1 phone call would instead take 10 email exchanges. As a result emails and MSN are generally least ineffective communication indicates. When Zhou Hongyi (founder of Chinese network software 3721.com) took over Yahoo! China company, those two communications cultural conflicts had been extremely obvious. All the original Yahoo! China employees used emails to communicate with customers and business partners. They would never visit customers and entertain them, concerning this practice vulgar. After Zhou sacked those employees who only know email communications, the business started to turn about. It is stated that in American website business meetings in China, so long as there is 1 foreign staff attending, all other present 20 or 30 Chinese employees have to speak English. This is very unpragmatic, as they do not realise they’re performing Chinese company and language should be in Chinese. 9. Elegance and simplicity VS Excitement and wealthy contents Glancing at a web site with American background, you will instantly realise it’s created by Americans: elegant, simple, quiet and beautiful. All the great things are hidden inside, to ensure that it fits the status of a multinational Internet company. White collar minorities may like that, but the general public will shun such websites. Their Chinese rivals, on the other hand, usually like putting floating banners everywhere. They show all the great things on home pages, beautiful artworks do not really matter. Until recently, former Yahoo! China employees still looked down on Hao123.com (URL directory web site in China). They thought it was uglily created, jamming all of the internet links together. But a few years ago, Yahoo! China, which was in the exact same weblink directory company, had invested 1 billion yuan in China. It employed a lot of MBAs, overseas returned Chinese, HK and Taiwan talents, but ultimately lost the game to Hao123.com, a low price website merely built and maintained by a secondary school level student from Guangdong Province. After a few years Yahoo! China had fallen nicely behind Hao123.com in terms of traffic, user numbers and advertising effectiveness. 10. Recruiting people from comparable management backgrounds VS Recruiting people from various entrepreneurial backgrounds With regards to recruitment, American websites all overemphasize the unspoken rule of “common language”: employees who’re diligent, cautious, polite, proficient in writing emails in English, proficient in utilizing Powerpoint, forever favouring HK people, Taiwanese and overseas returned Chinese. These individuals are all from the same mould, outsiders aren’t simple to obtain into their circle. Therefore, web site styles, product opinions and promotion methods are all indisputably comparable and high-class, which means failure. Their recruitment places an excessive amount of emphasis on management and smoothness. Their Chinese competitors won’t only recruit diligent people, but also people who are decisive and adventurous. Although this might lead to varied personnel qualities within an organisation, the company can, nevertheless, turn out to be entrepreneurial, extreme and offensive, building much better web sites than American counterparts’. Apart from the above example of main American web sites, numerous smaller American web sites have encountered the exact same fate in China. They invested millions per year, but only a number of thousand users everyday, although their Chinese rivals can achieve the exact same outcome with only a few hundred thousand yuan per year. It is crucial that individuals operating in American websites need to rectify the above 10 issue areas, so that they could have a better future in China.
