China’s internet companies adopting new ‘Social+’ business model to succeed

May 12, 2018
Industry News
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Zen Soo
zen.soo@scmp.com

Like millions of Chinese, Huang Xinyi almost never has her smartphone, an iPhone 8 Plus, out of reach. It is the first thing she picks up after waking up each morning, and the last she puts away before turning in for the night.

During the day, pockets of free time are spent on various social apps on Huang’s phone – be it checking out her Moments feed in WeChat to see what friends are up to, browsing Taobao deals for a new summer wardrobe or challenging friends to a game of Honour of Kings.

“[Social apps] allow me to keep in touch with my friends and inform me of trending topics. They’re a great way to entertain myself whenever I feel bored,” said Huang, a 27-year old freelance producer based in Beijing. “I am so used to interacting with my friends and entertaining myself on such apps that it’s become a habit.”

Huang is a typical user among the world’s largest social media market. In China more than 600 million people – almost twice the population of the United States – regularly use social media apps, according to data by eMarketer.

The largest social app in China is Tencent Holdings’ WeChat, which boasts over one billion users and offers features such as messaging, payments, gaming, e-commerce, and even food deliveries. WeChat users in China spend about a third of their time using the app on mobile platforms where they can interact with friends, check out their friends’ updates and browse content, according to consultancy China Channel.

The country’s penchant for social media and social networking has led to a new type of business model that could be referred to as Social+, where different industries such as education, news and e-commerce are anchored by a social pillar that drives user engagement and growth.

For companies that have successfully navigated Social+, a model unique to China, victory comes in the form of millions of active users amassed in a relatively short amount of time. Social+ apps are often recognised for their user stickiness, incorporating social elements that incentivise users to come back day after day.

The Social+ model typically happens in one of two ways: Chinese companies either leverage a user’s current social network to grow its user base, or they start a small community of their own, attracting users to be a part of it and contribute. Continue Reading


 

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