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Forget Twitter Fans, China's Tencent Wants U.S. Brands to Sign Up

  |  February 24, 2012   |  Comments   |  

Tencent is trying to stay ahead of its rivals by moving into the U.S. market and offering new opportunities to overseas marketers.

By Joan Voight

This is the second installment in a two-part series. Read part one.

China's Tencent, a multi-pronged Internet company, is trying to stay ahead of its rivals by moving into the U.S. market and offering new opportunities to overseas marketers. The Beijing-based company is rolling out an English-language version of its two-year-old Twitter-like Weibo service and is hiring a team in Silicon Valley to launch new games on Facebook.

Experts say the English-language Tencent Weibo isn't interested in competing with Twitter for U.S. users. Rather it wants to sell U.S. brands new avenues to tap the growing Chinese consumer base. "There is a far greater opportunity for Tencent in providing Western brands with access to the Chinese market than them investing heavily in Western adoption of their solutions," says Rick Williams, AKQA creative development director, based in London. The Tencent microblog has already signed up a sizable number of international brands, says Leo Chu, managing director of Tribal DDB Shanghai. Among the companies that advertise on Tencent's network of messaging, gaming, social media and web portals are Nike, Coca-Cola, KFC and Ford.

What exactly does the Tencent microblog have to offer Western marketers? Tencent claimed 50 million active Weibo users in Nov. 2011. Most are in China's fast-growing Tier 2 and 3 cities - large and mid-sized urban areas outside of major metropolitan areas. "To the majority of China's Internet users in second and third tier cities, Tencent IS the Internet," according to Chinese tech blog Techrice. Researchers at the Wharton School at the University of Pennsylvania, contend that lower tier cities in China are fertile territory for Western retailers.

But brands need to be wary. "Digital advertisers see less engagement on this platform  [than other Chinese sites] because the majority of users have been transplanted from Tencent's QQ services," says Patrick Searle, former digital strategist at Wieden + Kennedy Shanghai. Indeed, Tencent "synchronizes" its Weibo members with its QQ messaging service, which has 700 million active users. The Tencent Weibo also is limited in its ability to translate U.S. content into Chinese for brands wanting to converse with their Chinese audiences, says Williams.  "The English version is only translating the site furniture and navigation," he says.

In addition, Chinese microblogs "have been known to incentive brands to join their platforms in return for more media space in the 'to follow' section," which is shown to users when they are signing on or do searches, says Searle. "It makes a lot of sense to promote your brand on these platforms but it's worth scrutinizing the numbers the media sites send your way," he warns. And finally, the Chinese government censors all China-based social media.

The Tencent Facebook games will probably be a mixed bag for ambitious U.S. marketers, since Facebook - like Twitter - is blocked in China. In China, brands are attracted to Tencent's games by its massive number of users and ability to drive participation, says Chu. He points to Clear Dandruff shampoo, which built a successful game incorporating product benefits and education. "Others have gone the route of placement in environments that make sense, such as a milk brand in a Farmville type game, " he says. Perhaps Facebook games will be just the beginning. By opening up an office in the U.S., "Tencent can now work on truly global games titles and deals which even Facebook can't compete against in terms of reach," says Williams.

In the meantime, Tencent's archrival Sina Weibo is waiting in the wings. Sina Weibo has an English language mobile app and partnerships with Flipboard and Instagram. It has promised to launch an English website this year. Already it has about 450,000 users in the U.S., most of whom use it to communicate with residents of China. Users include Ed Lee, the mayor of San Francisco with about 50,000 followers, and U.S. basketball sensation Jeremy Lin, with about 875,000 followers.

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