These Surfers Do It Their Own Way

Herman Tang is just the kind of customer tech companies in China are trying to woo. He's a twentysomething student at a topnotch Beijing university, and he's adept at using all the latest Internet technologies. He joined the Chinese social-networking service Xiaonei, which allows members to post opinions and comment on each other's personal pages. He's checked out the English-language site Facebook, which is looking for a foothold in Asia's biggest market. But when it comes to keeping in touch with his friends, Herman says both sites are too "passive." He prefers the immediacy of instant messaging, from his PC at home and his cell phone when he's on the go. With IM, he says, "you can connect with anyone, any time—that's what makes it great."

Herman's not alone: China's Internet audience has, for the most part, given sites like Facebook and MySpace the cold shoulder. Even local Chinese sites like Xiaonei or have failed to establish big national followings. What may seem on the surface to be a stubborn backwardness on the part of the Chinese, however, could also be interpreted as a viable alternative to Western-style social networking. Many experts are starting to think that the Chinese are leading the way to a new kind of social Internet—one that emphasizes the kind of instant communication that Herman and his friends prize so highly. Recent surveys leave little doubt that a different kind of Internet culture is emerging in China—younger, more devoted, more addicted to speed and intimacy than its Western counterparts. With tens of millions of Chinese gaining access to broadband each year, says a recent study by the Internet research firm Netpop comparing China and the United States, "Chinese have the potential to shape Web commerce and culture far beyond their own country."

In many ways the big difference in China can be summed up in three words: instant mobile messaging. The low proportion of home PCs has made the mobile phone the preferred Internet-access device. And Chinese clearly prefer instant messaging—chatty, real-time communications that takes place via PC or cell phone—as opposed to ordinary e-mail, in which you never know when your correspondent might respond.

Demographics play a role, too. The average age of China's 172 million Internet users is 35, seven years younger than their 211 million American counterparts. And unlike Americans, who tend to go online for information, Chinese go seeking entertainment. Nearly half of Chinese Internet users feel the Web is important as a source of entertainment—more than those who feel the same way about TVs (34 percent), newspapers (39) and even face-to-face communication (44), according to a recent survey of Chinese Netizens by Guo Liang, a Web expert at the Chinese Academy of Social Sciences in Beijing. Rather than sit at desktops, browsing Wikipedia (which the Great Firewall of China has banned), Chinese prefer to buy tickets for Linkin Park after glimpsing the concert ad on their IM site, and then message dozens of friends, simultaneously urging them to do the same.

One survey suggests that the Chinese have a more passionate relationship with the Internet. Conducted by JWT, an ad firm, and IAC, which owns Home Shopping Network, Ticketmaster and other global brands, young Chinese were more likely than Americans to say their online lives were more intense than the real thing (48 percent versus 12 percent). And, perhaps because of the lack of reliable opinions in the media, Chinese also seem to be more likely than Americans to use the Web to share and form opinions. There are an estimated 39 million bloggers in China, 40 percent of all broadband users, compared with just 13 percent in the United States. Young Chinese Net users said that they go online with more people per week (23 versus 19) and were twice as likely to rely on online sources for shopping advice. (One caveat: the survey compares a broad cross-section of Americans to Chinese Internet users, a more elite crowd.)

Entrepreneurs are now scrambling to shape social networks that cater to the Chinese impulse for instant interactivity. Instead of adding instant messaging as an afterthought, Chinese Internet firm Tencent Holdings started out as an IM company in 1999, then launched social services such as games and virtual pets, all built around IM. Tencent now has 273 million members and 30 million peak simultaneous users—three quarters of China's IM market—and is "on the cutting edge of business-model innovation," says Duncan Clark of BDA, a consulting firm.

Western-style social-networking sites, by contrast, mostly concentrated on cities. "Most people are interested in making friends in their own vicinity, people they might meet in person," says Kaiser Kuo, head of digital strategy at Ogilvy China. The main exception so far is Xiaonei, which began as a service for university students in December 2005 and has since grown to more than 4.5 million users around the country. That's more than Facebook's English-language China network, which since October has attracted 155,000 users (it's adding 10,000 per week), but still small relative to the number of national users.

The prospect of tapping into the potential of China's social-networking trends has gotten the attention of investors, who pumped a billion dollars in venture capital into Chinese Internet ventures between 2001 and 2006, according to BDA. "More venture capital from Silicon Valley is in China today than anywhere else in the world," says BDA's Clark. And the country is early in its Internet trajectory. Whereas about 60 percent of the populations of the United States, South Korea and Japan own a computer, only 13 percent in China own PCs. "Innovation doesn't have to be inventing radical core technologies; there's entrepreneurial innovation too," he says. "Now I find myself giving seminars asking, 'Will China be the new California?'"