CIC 2011 White Paper: From Social Media to Social Business Topic 1: An Overview of the Evolution of Chinese Social Media

From Social Media to Social Business Topic One An Overview of the Evolution of Chinese Social Media A CIC Social Business White Paper Awareness Amplification collaborate Frictionless Interaction Consumer Insight E-community Engagement social capital Think Out of the Box Social Engage resources SSC Advertising Inspiration Comment E2.0 e-fluencer Share SCRM Information crowd sourcing Microblog BuzzIWOM Marketing execution Brand Evaluation Internet Netizen Social Business Design Communities Commerce Business RSS Brand Listen Weibo Know Connect Participate Business Intelligence BBS Website WIKI LBS Media Advocacy SNS Marketing Activation Transact Intelligence Online conversation Blog Internet Word of Mouth Incubation Cultivation Development Proliferation Network Revolutionwww.ciccorporate.com

PrefaceIn the US, the relentless expansion of Twitter and Facebook continues to change the entireInternet landscape. Nowadays, social media is as equally integral a part of people’s onlinelives as other key Internet services; search engines, portals or e-commerce platforms. Theextended 3rd party applications incorporated by social media platforms help to quickly forman immersive eco-system and have aided the perpetuation of this social business revolution.Since 2006, Crowd sourcing, Enterprise 2.0 and Social CRM etc. appeared one after another.In China, the social media environment has been really heating up as traditional Internetgiants like Taobao, QQ, Baidu and Sina have joined the battle. The boundary between SNSand e-commerce being blurred by the emergence of some group purchase sites. We havealso seen big platforms starting to adopt an “Open API & Platform Strategy”, based on arealization of the importance of 3rd party applications to their success.The social business revolution is gathering momentum and we’re on the brink of a goldenopportunity to transform the relationship between commerce and communication. To betterequip enterprise to embrace and leverage the social business revolution, CIC are launching aseries of White Papers in 2011, “The Evolution from Social Media to Social Business inChina”.The series will focus on three key areas. The first, “An Overview of the Evolution of ChineseSocial Media”, will act as guide through the development of China’s unique social medialandscape, exploring the corresponding business applications at each stage. The second,“Online Efluencer Workshop”, will dive deep into the role of online efluencers; those whoactively engage communities, tapping into their deep motivation and examining the cultureof those who drive digital discussion. The third, “A Preview of Social Business Operation andManagement in China”, will introduce the practical application, exemplifying cases in whichbusinesses integrate web2.0 technology. We aim to highlight the strategic remodeling ofcommunication relations not only between brand and consumer but also corporateorganization and overall business operation.CIC are the first to advocate this concept and define “The Evolution from Social Media toSocial Business” in China, proposing the definition of “social business” and prospecting itsfuture. The business model of every enterprise and organization in China will eventuallyevolve to meet the age of “social business”. All business will become social business. March 2011 An Overview of the Evolution of Chinese Social Media i

Topic oneAn Overview of the Evolution of Chinese Social Media MarchFrom Social Media to Social Business Chinese Social Media An Overview of the Evolution of 2011

Table of contentsChapter IChina – In Step With Global Social Media DevelopmentP 01 - 1.1 The global development of social mediaP 02 - 1.2 The boom of social media in ChinaP 03 - 1.3 The unique landscape of China’s social mediaP 05 - 1.4 The history of China’s social mediaChapter IIEnterprise Adoption of Social Media in ChinaP 06 - 2.1 History of enterprise adoption of social mediaP 06 - 2.2 Incubation (1994 – 2003)P 07 - 2.3 Cultivation (2004-2006)P 11 - 2.4 Experimentation (2007-2008)P 15 - 2.5 Proliferation (2009-2010)P 22 - 2.6 Revolution (since 2011)Chapter IIIThe Connecting Threads of Chinese Social NetworksP 25 - 3.1 Personal interaction in Chinese social mediaP 27 - 3.2 A brief history of China’s weblebritiesP 29 - 3.3 Styles of the Chinese social efluencerP 37 - 3.4 Social efluencers’ workshopAn Overview of the Evolution of Chinese Social Media ii

Chapter I: China – In Step With Global Social Media Development Chapter I China – In Step With Global Social Media Development 1.1 The global development of social media According to the latest statistics released by the ITU (International Telecommunication Union), the global netizen population had reached 2.08 billion by the end of 2010. That is approximately 30% of the world population. Facebook, currently the most popular social media platform worldwide, was approaching 0.6 billion users, about 29% of the world’s netizens and 8% of the global population. There is a phrase online: If Facebook were a country, it would have the world’s third largest population after China and India. Global Web Index, a foreign Internet research agency, carried out a worldwide investigation among Internet users in 2010. The results reaffirmed the belief that Social Media has become a major part of netizens’ lives. Figure 1-1 Social Media Involvement by Country Note: Social Media is defined as Internet based platforms and technologies that permit users’ interaction and/or facilitate the creation and exchange of user generated content. Whilst the scope is evolving, currently the most frequently used examples include: blog, microblog, online video site, BBS and social network. Source: European Marketing Research Association(ESOMAR) “Social Media Research Guide”. Source: Global Web Index-Global State of Social Media in 2011© 2011 CIC An Overview of the Evolution of Chinese Social Media P01

Chapter I: China – In Step With Global Social Media Development 1.2 The boom of social media in China In China, with the recent improvement of network infrastructure, Internet penetration rate is increasing all the time. According to the latest statistics from the China Internet Network Information Center (CNNIC), the number of Chinese Internet users had reached 457 million by the end of 2010. Social network users hit 235 million, blog users 294 million, BBS users 148 million and online video users 284 million. In China, on average, one netizen has three social media identities. From the total number of social media users and the exponential growth trend, it is quite easy to see what an integral part of China’s Internet social media has become. Figure 1-2 China’s Social Media Penetration Trend Unit: million people 500 450 400 350 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 Microblog BBS SNS Video Blog IM Internet Data Source: The 27th Statistical Survey Report about Internet Development in China by CNNIC, Jan 2011 Note: Due to the rapid growth of the microblog medium in China, users numbers for microblog had exceeded 100 million when this white paper is published. (Based on public Internet data source)© 2011 CIC An Overview of the Evolution of Chinese Social Media P02

Chapter I: China – In Step With Global Social Media Development 1.3 The unique landscape of China’s social media Just as in the West, China has a variety of social media platforms where netizens can communicate with each other and share information. Figure 1-3 China Social Media Landscape 2011 Source: CIC, please click here to see the originals Note: In year 2008, CIC created the 1st Chinese Conversation Prism which was inspired by Jesse Thomas and Brian Solis, and it is updated annually. Although China’s overall social media landscape is reminiscent of other countries’, it is also unique and highly fractured in comparison. Taking social networking sites as an example, Facebook is a clear leader overseas. However, in China, sites such as Qzone, Kaixin, Renren and many more compete for netizens’ attention. With unique and often multiple versions of common social media platforms, China offers one of the most complex and fragmented social media landscapes in the world.© 2011 CIC An Overview of the Evolution of Chinese Social Media P03

Chapter I: China – In Step With Global Social Media Development Furthermore, compared with Western netizens, Chinese netizens are more inclined to create and share content. Research organization Forrester once compared the online behavior of Chinese and American netizens, finding that the proportion of Chinese netizens (44%) who create content was substantially higher than that of American netizens (24%). Then there are wholly unique net cultures and languages. As with the rest of the world, net language can bleed through to offline use and become a general expression. In China, the creativity and propensity for sharing of netizens makes this trend even more prevalent. Figure1-4 Chinese Netizens are More Engaged and Creative 79% 73% 51% 44% 46% 37% 37% 32% 24% 21% 18% 17% Creators Critics Collectors Joiners Spectators Inactives US China Source: Forrester Research’s Consumer Technographics data US: Forrester Research‘s North American Technographics® Online Benchmark Survey, Q2 2010 (US), 26,913 respondent; China: Forrester Research’s Asia Pacific Technographics® Survey, Q4 2009, 7,690© 2011 CIC An Overview of the Evolution of Chinese Social Media P04

Chapter I: China – In Step With Global Social Media Development 1.4 The history of China’s social media The roots of China’s social media can be traced back to the first BBS (Bulletin Board System - online discussion forum or community) in 1994 - Shuguang BBS. It was the start of a trial period in China’s Internet development, when there were only a few thousand Internet users among a billion citizens. 1994 to 2003 was the incubation period, when BBS, customer review sites and instant messaging all began to integrate with netizens’ lives. From 2004 onward, blogging, online video, social networks, Wiki, the microblog, location based service and group purchase all burst on to the social media scene. The landscape of social media became ever more complex and netizens’ understanding of social media grew ever deeper. From 2011, all of these diverse social media platforms began to cooperate and integrate with one another. Figure 1-5 China’s Social Media History Source: CIC Throughout the whole history of China’s social media’s development, businesses have used social media in more and more sophisticated ways. This aided the development of social media and in the second chapter we will go on to examine the hottest topics during each key historical period of China’s social media development. We will also take a closer look at how enterprise’s use of social media marketing and strategic business application can reap big rewards.© 2011 CIC An Overview of the Evolution of Chinese Social Media P05

Chapter II: Enterprise Adoption of Social Media in China Chapter II Enterprise Adoption of Social Media in China 2.1 History of enterprise adoption of social media With the development of social media in China, business’ adoption is continuously deepening and diversifying. The comprehension and application of social media can be divided into five stages: Incubation (1993-2003), Cultivation (2004-2006), Experimentation (2007-2008), Proliferation (2009-2010) and Revolution, which indicates the arrival of Social Business. Figure 2-1 Enterprise Adoption of Social Media Source: CIC, inspired by Altimeter Group Let us look at hot trends for social media for each stage and relevant business’ use. 2.2 Incubation (1994 – 2003) The phase between 1994 and 2003 is commonly regarded as the incubation period as enterprise rarely employed a social media strategy. At this stage, the earliest BBS (platforms such as Xici and Tianya) gathered many users both inside and outside campus and later those BBS became some of the most influential discussion forums on the Chinese Internet. The instant messaging service QQ facilitated instantaneous inter-netizen communication and Dianping provided a specialized platform for consumer feedback but generally, BBS, IM and customer review sites remained unsophisticated platforms for ordinary netizens, rather than developed business models.© 2011 CIC An Overview of the Evolution of Chinese Social Media P06

Chapter II: Enterprise Adoption of Social Media in China 2.3 Cultivation (2004-2006) 2004 was the beginning of the Web 2.0 era, when netizens began to create engaging content and share with others. We were able to observe consumer’s complaints about, or admiration of, brands, products and services. We also began to witness the rudimentary evolution of online video, SNS and Wiki. At the same time, a spate of Internet crisis made some organizations pay more attention to the importance of online buzz. Some companies engaged in blog marketing; using official corporate blogs to set up a communication channel that could respond to unforeseen crisis. Others employed an open source marketing strategy to encourage netizens to use their intelligence and creative instinct to participate in brand ideation, making them feel closer to their favorite brands. 2.3.1 Crisis 2.0 - A new challenge of the PR department With Web 2.0 and the development of social media, netizens could share their experience and review brands and products more freely online. In this way, IWOM began to influence consumer perception and sway purchase decisions. Note: the definition of IWOM by CIC IWOM: Abbreviation of "Internet Word of Mouth." It stands for text and multimedia content related to companies, products or services shared by netizens, including brands and consumers, via online community platforms such as BBS (online discussion forum), blogs, video sites, SNS and microblogs. Marketing professionals cannot escape the fact that a lot of crises were born out of the negative buzz online or they were spread rapidly through Internet Word of Mouth. This is what we call Crisis 2.0 – a crisis launched or exacerbated by social media.© 2011 CIC An Overview of the Evolution of Chinese Social Media P07

Chapter II: Enterprise Adoption of Social Media in China Examples of Crisis 2.0 can be drawn from as early as 2004-2006. KFC faced great pressure from netizens when it released advertisements that implied that those who eat KFC would be admitted to university, while those who do not, fail. Japanese cosmetics brand SK-II was compelled to quit the Chinese market when online discussion spread the news that forbidden ingredients were discovered in quite a few SK-II products. Computer giant Dell unconditionally accepted customers’ reimbursement requests after the “Dell Hell” crisis. Of course, social media played a significant part in all of these crises. As the stress of IWOM crisis mounted on corporate PR departments, corporate started to address the issue in social media. They also proactively build systems to monitor and study IWOM. In this way, corporations could learn from consumer opinions delivered by social media, then respond in an appropriate and timely manner. Crisis 2.0 Case Study – Dell Hell in 2006 • June 23: First consumer complaint on IT168 BBS notebook forum • June 24: IT168 forum administrator invites others to complain about Dell • June 24: IT168 sets up special "Dell Hell" section to track issue • June 28: Dell responds to the incident, says "sorry“ • June 29: Lawyer Ma Jianrong invites forum participants to join a class action lawsuit • June 30: Story moves to mainstream media, dubbed "Processor Gate“ • July 4: CCTV reports the class action suit • July 5: Dell offers refund; consumers not mollified Source: CIC founder blog article China Dell Hell (aka Processor Gate)© 2011 CIC An Overview of the Evolution of Chinese Social Media P08

Chapter II: Enterprise Adoption of Social Media in China 2.3.2 Rise of the Blog – the debut of corporate blogging In 2005, two of the Chinese Internet’s most important people, Fang Xingdong1 and Chen Tong2 triggered the era of the popular blog. After that, efluencers and average netizens started to blog. Overseas, more and more foreign companies followed Microsoft and SUN in establishing their own blog. Corporations found that it was a good way to bypass traditional media and expand their business scope, promoting sales and building brand loyalty through blogging. Michael Wiley, director of GE’s New Media Affairs, claimed that “when we think it is necessary to respond, we just enter the blog and express our views directly to the customers.” We also saw Dell had learned from the Dell Hell crisis, setting up their Chinese blog “Direct2Dell” in 2007, establishing a direct communication channel with their consumers. Corporate blogs can be classified into three categories; Executive, Product & Technology and Culture & Value. These blogs can give a vivid image of a corporations’ culture. Note: 1Fang Xingdong, founder of Blogchina (now Bokee), “Godfather” of blogging in China, popularized “Boke” (博客) as word for blog in Chinese. 2Chen Tong, VP and Chief Editor of Sina, one of the most important proponents of Sina blogging service (http://blog.sina.com.cn). Figure 2-2 Categories of Corporate Blog Source: CIC© 2011 CIC An Overview of the Evolution of Chinese Social Media P09

Chapter II: Enterprise Adoption of Social Media in China 2.3.3 Open Source Marketing In 2006, a trial of Open Source Marketing swept China. Industries ranging from FMCG to electronics and luxury products, even portals and web2.0 sites, began to practice Open Source Marketing, which inspires netizens to take part in marketing ideation. The core of Open Source Marketing is participation. During the process, netizens feel challenged but with that comes the fun of co-operation and the reward of creating something. All the while, brands collect creative ideas, impart their brand values and culture, build stronger relationships with their consumers and engage new fans. Open Source Case Study: Pepsi Creative Challenge 2006 – You write the TVC！ It is your script that counts Pepsi Creative Challenge was a marketing campaign that Pepsi designed for its spokesperson － pop singer Jay Chou. Fans could submit their scripts, from which netizens chose the final winner, becoming Jay’s Pepsi TVC. From May to August, more than 25,000 scripts were submitted and viewed. Source: CIC Please refer to CIC blog ”Open source marketing in China – the Power of Open source (Chinese version)” to understand more.© 2011 CIC An Overview of the Evolution of Chinese Social Media P10

Chapter II: Enterprise Adoption of Social Media in China 2.4 Experimentation (2007-2008) 2.4.1 Chinese social media landscape began to take shape In the experimentation stage, Chinese online platforms diversified and the social media landscape began to take shape. BBS remained the center of the Internet community for netizens’ discussion and sharing. Blogs enabled greater expression of individuality. Video sharing turned everybody into a movie director, publisher and critic. SNS enhanced communication and interaction between friends. More netizens could get online on the move, by phone or other mobile device and we all welcomed the Mobile Network Era. (Reference: CIC 2008 white paper series “The Internet is THE Community” Topic One: The Chinese IWOM Landscape) 2.4.2 Unique net culture and net language Unique net cultures and net language started to emerge on these diverse networking platforms. Netizens “Shai” (晒/show) themselves or products with pictures and videos, voiced opinion and attitude by spoofing and conveyed emotion with unique symbols or creative animation. Net culture: The “Shai Ke” (晒客/people who enjoy doing shai) shares how they live, what they like and a few of them even expose their bad experience online. Figure 2-3 “Shai” culture “Shai” products “Shai” life “Shai” Hei “shai hei”: share negative remarks of a bad experience which creates harmful word of mouth. Source: IWOM Watch 2nd Half Year Review, 2007 Others tend to express their opinion by spoofing, joking or playing tricks. ( ex. in 2007, Netizens redesigned the photo of a knife wielding mad man in Chunxi Street with brand logo or ads)© 2011 CIC An Overview of the Evolution of Chinese Social Media P11

Chapter II: Enterprise Adoption of Social Media in China Figure 2-4 Netizens redesigned the photo of a knife wielding mad man in Chunxi Street with brand logo or ads Original photo Redesigned photos Source: IWOM Watch 2nd Half Year Review, 2007 Net language: Net culture inspired its own language. Netizens started trends by reinterpreting ancient Chinese characters. For example, “囧 (jiong)” was given new meaning, either as depressed, lost or embarrassed because it looked like a facial expression. Now it is used on mass by netizens, across all kinds of social media platform. Figure 2-5 囧 was incorporated into videos, brands and products. Video Brand Product Source: CIC 2008 white paper series “The Internet is THE Community” Topic Three: The Diversity of Chinese Net Language Letters and numbers were also used to ease communications. For example, Orz=on one’s knees, 555=crying, 3Q=thanks. Sometimes popular words can be used to express individual emotions and attitudes. For example, “雷 (lei)”means shocked, “俯卧撑(fuwuocheng, pushups)”, ”打酱油 (dajiangyou)” means it is none of my business. Figure 2-6 Tuzki It is not just written language, animation is also being used to show how you feel. Tuzki, a cartoon rabbit, became a hugely popular means of caricaturing your mood and expressing yourself online. Tuzki even served as a spokesperson for Motorola and was purchased by Turner Networks. Source: IWOM Watch 2nd Half Year Review, 2007© 2011 CIC An Overview of the Evolution of Chinese Social Media P12

Chapter II: Enterprise Adoption of Social Media in China 2.4.3 Business’ diverse application of social media The Internet in China is the most fragmented and multifaceted in the world. As it continues to grow in complexity with each passing day, with new platforms and cultures emerging, it presents an ever increasing challenge to business communication strategy. Netizens are becoming ever more active in the digital space; whether it is “Shai” or “Spoofing”, they are finding a voice in social media to express appreciation or dissatisfaction with brands. Key opinion leaders, or efluencers, disseminate their message rapidly through a variety of platforms. Brands realize they need to listen more, have a better understanding and participate more effectively in the netizens’ online landscape. This means a more proactive approach to social media. Through this engagement and participation, brands are also driving the further development of social media platforms. According to CIC’s L-K-P model, businesses’ application of social media is embodied in the following 6 areas: Figure 2-7 Business Application of Social Media Source: CIC© 2011 CIC An Overview of the Evolution of Chinese Social Media P13

Chapter II: Enterprise Adoption of Social Media in China Listen – Listen to IWOM, gather industry intelligence from social media channels and assess a brand’s online reputation • Online Reputation: Public Relations departments monitor and track the brand’s IWOM regularly, systematically understanding and assessing awareness (buzz volume) and reputation (sentiment). This monitoring facilitates early detection of any potential crisis and identifies PR opportunities. • Market Intelligence: Business Intelligence and Strategic Planning departments not only gather information from news clippings, offline surveys and statistics from industry association , they also get the latest intelligence and competitor dynamics through social media’s real-time reaction and dynamic expression. Know – IWOM offers consumer insight and product feedback. Ensure a thorough understanding of online community culture • Consumer Insights: Market Research and R&D departments are often surprised that IWOM has become a unique and highly effective channel for them to identify consumer needs and product feedback. Social media has turned the Internet in to an immense focus group. IWOM, based on consumers’ independent and spontaneous expression, is more natural and more authentic than any conventional survey. • Advertising Inspiration: Marketing departments and advertising agencies can brainstorm new ideas based on contemporary, user generated internet culture. They can then utilize these very means of production, inviting grassroots weblebrities as product spokesperson, attracting efluencers to facilitate brand interaction and broadcast the message, while employing net language and net culture in the advertisements. Participate – Take an active role in the online community, interact with netizens and convey the brand message in an authentic voice • Digital Marketing Plan: To make best use of the business opportunities presented by the Internet era, companies established digital marketing or digital media buy departments. These departments would coordinate with others internally to explore online communities. Digital strategies could be plotted against market conditions and be properly implemented and executed from within organizations. Optimal digital marketing activity rests on three cornerstones: respect for creative ideas and feedback from netizens; a platform for equal dialogues; a willingness to participate in the community as a open, corporate citizen, with an attitude of listening and cooperating with others. • Marketing Execution Feedback: A huge number of consumers express their feelings and comment on brands’ online and offline campaigns. This IWOM must be taken seriously by the marketing department and advertizing agency when evaluating marketing activity. Many have established means of assessing IWOM (KPI), in order to compare campaigns vertically or horizontally.© 2011 CIC An Overview of the Evolution of Chinese Social Media P14

Chapter II: Enterprise Adoption of Social Media in China 2.5 Proliferation (2009-2010) In 2009, China entered the proliferation stage of social media development lead by a boom in social network sites. Then viral videos spread over from video sites to other social media platforms. Later, microblogs, lead by Sina, started to grow. In 2010, the microblog medium really took off. Along side this, group purchase has also been blossoming, as well as a hot wave of checking in raised by LBS (location based service) sites headed by Jiepang and Sifang. The key significance of this rapid evolution is not simply in the emergence of new platforms but also in the dedicated participation of netizens. After this period of proliferation, netizens became increasingly diverse and the function of social media became ever more complex. Brands, organizations and media corporations are not just finding different ways to use social platforms, some pioneering enterprises are establishing departments to better manage the impact of social media. 2.5.1 Social network sites (SNS) Social networks, which feature both BBS community conventions and the characteristics of blog self-expression, encourage netizens to use their real names and communicate more personally. In 2009, Kaixin successfully entered the white-collar market by leveraging social games and Xiaonei was rebranded as Renren, also expanding its audience of young, white- collars. With the rapid development of China’s SNS communities, marketers began to pay more attention and brands targeting this potential audience began to participate in these communities in different ways. Outlined below is one of the more typical and representative cases we observed: SNS Case Study – Lohas Juice In May 2009, China Oil & Foodstuffs Corporation (COFCO) cooperated with Kaixin SNS to promote a new brand called ‘Lohas’. Using Kaixin Garden, netizens could plant Lohas seeds, harvest fruit and then turn it into Lohas juice. In two days, the participants reached 3,676,464 and within a week, COFCO had 284,202 Lohas fans. Source: CIC IWOM Watch, May 2009© 2011 CIC An Overview of the Evolution of Chinese Social Media P15

Chapter II: Enterprise Adoption of Social Media in China 2.5.2 Viral video By the end of 2010, online video users reached 284 million (Data Source: The 27th Statistical Survey Report about Internet Development in China by CNNIC, Jan 2011). State run websites like CNTV and private video sites like Youku, Ku6 and Tudou have all become a big part of netizens’ lives. As a result, many brands started using viral videos to promote sales. The swell in popularity was fuelled by integration with social websites, making the viral spread of dynamic content faster and more wide reaching. Viral video case study: Carlsberg’s viral videos gain popularity online Sample Quote： Sample Quote： Sample Quote： Is this a gift that Carlsberg I still believe that China One video is enough. Why gave to the Chinese football would win the World Cup always doing this. It is fans? someday! meaningless. During the World Cup, Carlsberg launched three viral videos for Chinese football fans. In these videos, China took on world class football teams such as Argentina, France and Brazil in competitions such as “mahjong, hot pot and ping-pong”, in an effort to promote the Carlsberg brand’s spirit – “have fun”. Although many netizens felt that repeated videos in the same style made them feel bored, the majority of comments were positive and netizens liked how the brand addressed Chinese football fans “dreams of winning the World Cup.” Source: CIC IWOM Watch, June 2010© 2011 CIC An Overview of the Evolution of Chinese Social Media P16

Chapter II: Enterprise Adoption of Social Media in China 2.5.3 The boom in microblogging The microblog, or “Weibo” to Chinese netizens, is faster and more convenient to release than a conventional blog. This low barrier to entry makes it more accessible. The 140 character limit makes it easy to publish, browse and re-publish, forwarding to your peers in just one click. Much of the popularity of the microblog medium is in no small part due to the shortened distance between celebrities and their fans. In 2007, microblog pioneers like Fanfou and Jiwai were already on the scene but microblog platforms didn’t become popular until four portal sites (Sina, Sohu, 163 and Tencent) launched their own microblog services within a year. In August 2009, Sina became the first portal site to launch a microblog service and from end of 2009 to the beginning of 2010, Sohu, 163 and Tencent followed. These are the key players but there are others; Xinhuanet, People, Ifeng and Hexun have launched their own microblog products. According to the latest statistics released in February 2011, the total number of registered microblog users shared between the top three portal sites (Sina, Tencent and Sohu) has already surpassed 200 million, among which, the registered users of Sina Microblog have reached 100 million and its daily tweet reached 25 million. Figure 2-8 History of the Microblog in China Source: CIC collected information via social Q&A site Zhihu© 2011 CIC An Overview of the Evolution of Chinese Social Media P17

Chapter II: Enterprise Adoption of Social Media in China The emergence of the microblog gave businesses a more direct channel to interact with their consumers. Many netizens felt that through use of the microblog, brands sounded more like real people and their voice could be heard directly by the brand. Now, there is definitely a growing trend for companies to launch an official microblog, just as they did with conventional blogs years ago. In the battle of the microblogs, we have found a wide range of organizations and government institutions, all vying for user attention. Microblog case study: 600 cabin crew from China Eastern sign up Sina microblog Around 600 cabin crew from China Eastern Airlines joined Sina microblog with the intention to better communicate with their customers/netizens, their ID are all marked with ‘凌燕(Lingyan)’. It does help brand to build customer loyalty and to deal with any potential crisis. Source: CIC IWOM Watch, Feb 2010 2.5.4 Group purchase While group purchase sites like Groupon must build a large community of consumers on a sort of “build it and they will come” approach, Chinese consumers have long been organizing themselves and initiating group purchase via Internet communities without the encouragement of any formal service. Sites like 51tuangou.com didn’t start the wave of group purchase, they simply rode it. Later, a large number of websites, including Meituan and Lashou, inspired by Groupon’s success, offered big discounts for one type of product or service on a daily basis. As long as the number of orders reached the minimum, the purchase will be effective. (Please click here to read more about the history of Chinese online group purchase.) Group purchase websites can develop quickly not only because of the alluring price, but also thanks to the close cooperation between group purchase websites and other social media. Consumers can not only log on to some group purchase websites directly through their Kaixin or Sina Microblog account, they can also share their deal with peers across SNS websites like Kaixin and Douban.© 2011 CIC An Overview of the Evolution of Chinese Social Media P18

Chapter II: Enterprise Adoption of Social Media in China Figure 2-9 Group Purchase in China, 2010 Data Source: Tuan800.com Group purchase websites help brands boost short term sales volume as well as build brand awareness. All sorts of businesses have successfully employed this tactic; restaurants, hotels, shops and cinemas to name but a few. We found many well-known brands that regard the concept of group purchase an opportunity to revolutionize and socialize sales. Group purchase case study: Mercedes-Benz “smart” campaign on Taobao “200 Benz Smart cars were sold out in 3.5 hours!” was a headline that went viral all over the Chinese Internet. This campaign on Taobao called “be surprised after one click” (一点惊喜) was launched by Mercedes-Benz who provided up to 25% off for Smart cars. The sales revenue was CNY 27 million. Source: CIC IWOM Watch, Aug 2010© 2011 CIC An Overview of the Evolution of Chinese Social Media P19

Chapter II: Enterprise Adoption of Social Media in China 2.5.5 Location based service（LBS） The birth of Foursquare made location based service (LBS) a new netizen favorite on Internet and mobile devices. Since 2010, over 20 mainstream LBS websites, including Jiepang, Sifang, Bedo and Digu have sprung up. Netizens “check in” online at real-world locations, actively seeking out and collecting virtual badges, which in some cases can earn tangible rewards such as coffee, clothes and even concert tickets. On the 11th of October 2010, Netease launched Bafang.163.com, becoming the first portal site in the LBS arena. Recently, Sina microblog launched an LBS service named “Wei Ling Di” or “Micro Territory”. Figure 2-10 Main Chinese LBS sites Source: CIC IWOM Watch Special edition for LBS Although this industry is still in its infancy, brands and organizations active in social media have begun building relationships with LBS websites. This is already producing some very impressive success stories. LBS case study: Checking in with Jiepang; getting gifts from Starbucks. Recently, Jiepang launched a marketing event together with Starbucks that will award different kinds of specialized Starbucks badges to those who’ve checked in at any Starbucks store in Jiangsu, Zhejiang & Shanghai. The "Special Christmas Badge" event was awarded if you checked in more than 10 times. People were allowed to collect another 5 customized badges, earning them the right to join the lucky draw for Starbucks Christmas Crystal Ball. All Starbucks stores in Jiangsu, Zhejiang & Shanghai joined “Check in” events. Jiepang will mark location with badges as “with surprise” Source: CIC IWOM Watch Special edition for LBS© 2011 CIC An Overview of the Evolution of Chinese Social Media P20

Chapter II: Enterprise Adoption of Social Media in China 2.5.6 The establishment of business’ social media center of excellence Chinese social media became increasingly complex and its audience ever more dispersed after the proliferation period of 2009 and 2010. In order to better manage the potential opportunity and challenge presented in this fractured environment, pioneer enterprises like Dell and Intel established social media listening centers, where specialized teams were assigned to take charge of social media strategic planning, training and assessment. Those actions not only involve marketing, public relations and advertising but also involve a host of other departments. R&D and Customer Service: BBS and customer review websites house a vast number of consumer comments and views on brands and products. They can offer a basis for creative inspiration and new product development, while helping to improve the quality and efficiency of customer service. Marketing and Communication: SNS, Microblog, LBS and instant messaging offer strong interaction and widespread coverage. So, they are well suited to interactive marketing and communication activities to that can improve brand image. Sales and Advertising: Brands could sell products, launch product placements or video ads on e-commerce, Games or Video sharing websites to boost sales and build brand awareness in a short time. Human Resources and Culture: SNS and Microblog have become new recruitment channels. Companies can not only release pictures and videos related to their corporate activities, improving enterprise culture and image, they can also directly communicate with potential candidates. Public Relations and Market Intelligence: The Wiki is an ideal platform for knowledge sharing and blogs are highly effective in conveying a business’ professional image. Social Media Center Case Study: Dell’s Social Media Listening Command Center Source: Direct2Dell Real-time maps and statistics are displayed on big screens. In the event of IWOM crisis, red lights indicate an area, informing you on which platforms the crisis appeared and its nature. The system will immediately assign relevant customer service people to solve it. Think rapid-response IWOM taskforce, like something from a TV show… Pretty cool!© 2011 CIC An Overview of the Evolution of Chinese Social Media P21

Chapter II: Enterprise Adoption of Social Media in China 2.6 Revolution (Since 2011) In this period, various social media started seek cross-border cooperation or integration. The huge business revolution is coming – The rapid development of social media and the increasing implication of IWOM are not only reshaping the relationship and communication between brands and consumers via advertising, public relations, marketing, sales, human resources and customer service, but also reform the business model and organizational structure of the enterprises. 2.6.1 Cross-platform cooperation and integrated social media Social media has many advantages over traditional media: vast numbers of highly engaged, active users; high repeat visit rate, long spells of exposure and access to detailed user information. Of course, there is also the interaction and influence between users. Many still regard it as the latest vehicle for public relations and brand promotion. However, there are those industry pioneers who have already begun to utilize its social attributes in order to launch more extensive, engaging business initiatives. Cross-Platform: Media platforms can integrate other applications, for example Taobao’s SNS application “Taojianghu” or Renren’s e-commerce service “Renren Aigou (igo.renren.com)”. Besides, Kaixin integrated Kaixin group purchase and Sina became one of the owners of m18.com, an online textile retailer. Open: Platforms can open up to third parties or cooperate with other media channels. Renren and Sina microblog can link to shopping websites like 360buy, synchronizing users’ shopping information, reviews and recommendations across the shopping site and the SNS platform. OpenAPI is a common application in this process. The success of Facebook and Twitter is closely linked to their practice of encouraging 3rd party enterprises to develop applications. Chinese Internet pioneers have also started to consider expanding their website functions through Open API, prompting the establishment of the ‘Developers Conference’. Note: Open API’s allow service providers to package their own websites with a set API （Application Programming Interface）that is open to third party developers The integration of the social media and e-commerce looks set to be a key trend of future social business application; the social media platform is responsible for gathering customer information and managing customer relations, while e-commerce platforms focus on commodity supply and management. Of course, social media can also try to attract business applications via Open API and explore a whole new profit model. The advertising model based on the ‘golden age of TV’ era will be forced to adapt to the social business revolution. New advertising practices, from buying to effect evaluation, will emerge. Marketers will pay more attention to “participating”, rather than simply “viewing”© 2011 CIC An Overview of the Evolution of Chinese Social Media P22

Chapter II: Enterprise Adoption of Social Media in China 2.6.2 The appearance of the overseas social business concept In the West, some research organizations (such as Forrester) have already started investigating social business, and some organizations have begun to take part in enterprises social business design. The Dachis Group, as pioneer of this industry, proposed that “the revolution of technology, society and workplace has already changed our way of doing business. We must rethink how to restructure our organization in order to better utilize this revolution and to better cope with the following challenges. The traditional model will no longer be effective and the age of social business design is coming.” (Source: Dachis Group Official Website) 2.6.3 The upcoming social business revolution in China Looking at the process by which social media evolves into social business, we found that IWOM and the application of social media intelligence no longer belong to an individual or a lone department. It is more suitable to regard this information as an important strategic element in the planning of a company’s overall operation and management. As we have discussed, the rapid development of social media and the increasing implication of IWOM are not only reshaping the relationship between brands and consumers via advertising, public relations, customer service and other related marketing communication channels but also changing the entire business models and organizational structures. These changes are about more than just communication. For example “group purchase”, as we have discussed many times, is game-changing in terms of enterprises’ sales system. Customer services simply must acknowledge Internet word of mouth and online opinion. Brands have to overhaul their customer service systems in order to respond to high volumes of online consumer questioning and opinion. Human resources and social media, particularly in terms of recruitment, have been changing the way companies post job opportunities and candidates make applications – e.g. Linkedin. The traditional recruitment management model is just no longer enough. All of the signs indicate that not only does each function need to be adapted and ‘socialized’ but that the entire organization may need to be redesigned and recalibrated to fully leverage social media and IWOM intelligence and become a truly social business. (Please click here to read more about social business.) Note: Social Business is an organization designed consciously around social tools, social media and social networks, as a response to web 2.0’s revamped technological space and its reshaped brand-consumer communication and business disciplines.© 2011 CIC An Overview of the Evolution of Chinese Social Media P23

Chapter II: Enterprise Adoption of Social Media in China Quite simply, if every business is to become a social business, every business needs to embrace the new services, new technologies, new applications and new platforms that will enable that competency. Just as ERP (Enterprise Resource Planning) systems enable more effective management across the organization and CRM (Customer Relationship Management) systems enable more effective consumer relationships, a Social Business Support System enables more effective use of social intelligence right across the organization. Note: CIC defines a Social business Support System(SBSS) as an integration of the tools and services that empower individuals, agencies, media channels and organizations at all levels to establish, develop and manage their own social business knowledge, application and overall network, both internally and externally.© 2011 CIC An Overview of the Evolution of Chinese Social Media P24

Chapter III: The Connecting Threads of Chinese Social Networks Chapter III The Connecting Threads of Chinese Social Networks 3.1 Personal interaction in Chinese social network As discussed in Chapter 1, Chinese social media is becoming increasingly complex. Yet, the simple premise of personal interaction remains. So, whether corporate or individual, to take advantage of the power of social networking, you have to understand the connecting threads of these networks and take the appropriate action. It is impossible to find a one-size-fits-all approach to such a diverse social media space. This report simply offers constructive counsel based on our industry experience and the historical statistics presented by our extensive analysis of China’s online community. It is a starting point, designed to stimulate discussion and enhance our collective understanding. 3.1.1 Classifying social netizens A social network is generally organic. That is, naturally formed and loosely structured, with a relatively flat hierarchy and little bureaucracy. Based on influence, netizens on social network can be roughly divided into 3 categories: Net Star: They have huge influence and although the content they directly contribute may be limited, their words and actions can ignite hot topics. • Weblebrities: People who are unknown to the wider public before they become famous online. Netizens include Sister Furong, Brother Sharp and Xiaopang. • Celebrities: Real-life icons who have adopted social media. People like 80’s idol Hanhan, famous real estate developer Renzhiqiang and superstar Yaochen. Efluencer: Proficient in net language and very active within the online community; they’ve not only been instrumental in building but also in expanding the influence of net culture. Efluencers’ pivotal role within social networks will be the subject of greater focus later . Spectators: Like any crowd, they are large in volume and difficult to differentiate. They tend to be passive within social networks, rarely posting and may post anonymously. • Internal Spectators : The registered members of an Internet community who spend most of their time lurking. They only participate in the hottest of topics. • External Spectators : Not registered to an Internet community, they identify relevant topics through reference on other platforms or by their peers.© 2011 CIC An Overview of the Evolution of Chinese Social Media P25

Chapter III: The Connecting Threads of Chinese Social Networks 3.1.2 The interaction of netizens on social networks When plotting the interaction on social networks, there are essentially two axes: conversation and activity. Conversation is about opinions expressed and emotions exchanged; posting, forwarding, replying, supporting and voting. Activities generally occur spontaneously and are initiated by influential netizens or by the overall community but can be sparked by a third party. By activity we mean things like offline gatherings, brand promotions and specific tasks like homework, grabbing floor and holding quizzes. The Axis of Conversation: First, someone (most often a net star or an efluencer) initiates a conversation by posting a new topic or forwarding others’ post. Some netizens will participate in the discussion by replying to this post or voting on it, while others will simply observe. The number of replies or votes reflects netizens’ passion for participating in the overall discussion. The number of likes or views reflects the exposure of the topic. The Axis of Activity: There are essentially two types of social activities: brand sponsored and consumer-organized. Brand activities are usually launched via public advertising and then forwarded by efluencers. As it usually requires a certain degree of authority and relatively wide appeal to initiate and organize an activity, most initiators are either net stars or efluencers. They may use private messages to pass information to key individuals, assign specific tasks or facilitate offline events. Figure 3-1 The connecting threads of personal relationship within a Chinese social network Note: The social network in this instance refers to the communication and interaction network of netizens on a social media platform. Source: CIC© 2011 CIC An Overview of the Evolution of Chinese Social Media P26

Chapter III: The Connecting Threads of Chinese Social Networks 3.2 A brief history of China’s weblebrities In order to distinguish from real-life celebrities, we intend to only discuss net stars in a relatively narrow sense; weblebrities known to numerous netizens, with great influence on network platforms like BBS, blog, microblog, SNS, video sites and so on. Weblebrities and social media platforms certainly complement each other. There have been considerable discussions and conclusions drawn on the Internet about the development stages of net stars already. Based on those existing online discussions and CIC’s extensive observation of the transition of social media platforms, we can divide the development of net star culture into three stages; text age, image age and multimedia age. 3.2.1 Net stars of the text age (pre-2004) In the incubation period of Chinese social media, BBS and blog were netizens’ main public communication platforms. Those were the days of dial-up Internet access, so text was the main form of expression. The common feature of net stars of this generation is a high degree of literacy. Representatives of the text age include Pizicai, Ningcaishen, Lixunhuan, Annebaby, Murong Xuecun and Jinhezai etc. Figure 3-2 Net Stars of the Text Age Pizicai, real name Murong Xuecun Annebaby, real name Caizhiheng, is popular gained strong netizen Lijie, is famous for due to Internet following with “Say Goodbye to fiction “First Intimate “Chengdu, Leave Me Vivian”. Contact”. Alone Tonight”. 3.2.2 Net stars of the image age (from 2004 to 2006) In the cultivation period of Chinese social media, photo sharing became more and more important to social media platforms in line with improvements in Internet speed and bandwidth. Net stars of this generation are like cover figures on fashion magazines. Sister Furong, Tianxian mm, Gongjiao mm, Eryue Yatou, Xiaopang and Liumangyan appeared one after another.© 2011 CIC An Overview of the Evolution of Chinese Social Media P27

Chapter III: The Connecting Threads of Chinese Social Networks Figure 3-3 Net Stars of the Image Age Tianxian mm - “Self-Drive Xiaopang, whose photo Sister Furong applied for Tour in Sichuan & Xizang by was posted on the Qinghua Universitiy’s Bicycle: Come Across Tianxian Internet by netizens, postgraduate program, MM?!” was forwarded like aroused a spoofing wave beginning to post numerous crazy and in one night, almost immediately, pictures on the Shuimu Tianxian mm took up a spreading quickly across Qinghua BBS in 2004, prominent position on various BBS. causing a sensation. various Chinese websites. 3.2.3 Net stars of the multimedia age (from 2007 to 2010) In the development and proliferation period of Chinese social media, multimedia like video sites, microblogs and SNS became the mainstream. In this period, social events and Internet- marketers (so-called Tui Shou) were the driving force behind the new generation of net star, including Fengjie, Brother Sharp and Xuri Yanggang. Figure 3-4 Net Stars of the Broadband Age Fengjie was well known for a Xuri Yanggang, a musical series of shocking marriage- group formed by wandering Brother Sharp, a beggar on singers, were snapped by “Pai seeking statements on the the street in Ningbo, was Internet and on TV. Ke” (people who like to take famous for a post on photos), uploaded a video of Statements like, “I have been Tianya BBS – “SecKill The extensively reading from the migrant workers’ version of Most Handsome Passerby song “In Spring” and age of nine … no one can in the World”. surpass me in 600 years, 300 suddenly, Xuri Yanggang years ahead and 300 years were starring at the Chinese behind.” New Year Television Gala.© 2011 CIC An Overview of the Evolution of Chinese Social Media P28

Chapter III: The Connecting Threads of Chinese Social Networks 3.3 Styles of the Chinese social efluencer Efluencers are the main contributors of IWOM and social networks are already an indispensable part of their lives. In order to more thoroughly understand the personality and behavior of efluencers, we picked 300 active online community users (those registered over a year ago and who post more than industry average) from CIC’s social media database (including various Internet communities across the 6 most popular industries; auto, mobile phones, sports, skincare, luxury and baby care). We then carried out an online survey in September and October of 2010. Our aim was to present efluencers in China through three key aspects: demographics, behavior and persona. 3.3.1 Who are the efluencers on social network? In order to more clearly define the features of an efluencer, we compared them with ordinary netizens. In doing so, we found that they come from ordinary netizens but they are more social media savvy. They are the pioneers and dedicated practitioners of social networking. Hours spent on the Internet: On average, efluencers spend 55 hours a week on the Internet. That is approximately 3 times the overall netizens average, which is 18.3 hours. On average, an efluencer spends 5-10 hours on the Internet every day. 41.9% of these efluencers spend over 8 hours on the Internet every day. For them, surfing the Internet is like work. The only difference is that the former has no weekends. Figure 3-5 Hours Efluencers Spent Online Everyday Data source: “CIC 2010 efluencer survey” ; Sample size=300© 2011 CIC An Overview of the Evolution of Chinese Social Media P29

Chapter III: The Connecting Threads of Chinese Social Networks Income: More than half (52.3%) of ordinary netizens have a monthly income below CNY 1500, as a high proportion (37.2%) are students and unemployed people. In comparison, the incomes of efluencers are generally much higher, not only because most efluencers are gainfully employed but also due to the fact that social media is more developed in first-tier and second-tier cities. Highlighting this was the fact that people from Beijing, Shanghai, and Guangzhou accounted for 41.9% of this survey. Education: Most ordinary netizens are educated to high school level or below (accounting for 76.9%), while most efluencers have a college degree or above (89.5%). This result backs up the demand for efluencers’ knowledge and their communication ability. Occupations: Efluencers are mainly company staff (staff members and managers add up to 57.6%, about two times the percentage amongst all netizens - 26.9%). However, students account for only 8.1% of efluencers, far less than the proportion in ordinary netizens (30.6%). Although students are rich in free time, their lack of practical knowledge and experience hampers their online appeal. Figure 3-6 The Different Characteristics of Efluencers and Ordinary Netizens Statistics source: Ordinary netizens statistics come from The 27th Statistical Survey Report about Internet Development in China (2010) by CNNIC; Efluencers statistics are from “CIC 2010 efluencer survey” ; Sample size=300 In general, China’s efluencers are mainly white collar workers from first-tier and second-tier cities. They’ve received a higher education and are good communicators with well developed interpersonal skills and practical social experience. They have a stable income, strong purchasing power and have made the Internet a big part of their life. In Chinese, they’re the “四有达人” – the “Full fledged efluencers” – as in, they have presentation skills, have a sharing spirit, have purchasing power and have a desire to be online.© 2011 CIC An Overview of the Evolution of Chinese Social Media P30

Chapter III: The Connecting Threads of Chinese Social Networks 3.3.2 Strengths of the social efluencer The “Full fledged efluencers” are dedicated supporters of IWOM. On one hand, they rely on IWOM for the information about brands and products that drive their purchasing decisions. On the other, they are the most loyal contributors to IWOM and are willing to share their knowledge and experience with a large network of online friends and followers. Therefore they have much more knowledge and reliance on IWOM than ordinary netizens. Efluencers have a deeper understanding of the Internet and show more trust in IWOM accordingly On a scale of one to ten, the credibility of IWOM ranks about 8 to efluencers, closely following recommendations from friends and family (8.5) but higher than the news or authorities (7). The “CIC 2009 Netizen Survey” shows the credibility of IWOM amongst ordinary netizens is scored about 6, slightly below that of the news or authorities. This might imply that the higher a netizen’s knowledge of the Internet, the greater their trust in IWOM. IWOM is getting more and more important when our younger generation enters society. For example, the 80s, who grew up with Internet, and 90s, who grew up with social media. At the same time, salesmen and advertising’s marginal utility will decrease continuously. For enterprises and brands, it presents not only a big challenge, but also a big opportunity. Figure2.3 Credibility of IWOM Friends and families 8.5 IWOM 8.0 News /authorities 7.0 Sales person 5.3 Ads 5.0 Data source: “CIC 2010 efluencer survey” ; Sample size=300© 2011 CIC An Overview of the Evolution of Chinese Social Media P31

Chapter III: The Connecting Threads of Chinese Social Networks Efluencers trust reviews of brands and products on BBS, blogs and microblogs whose focus is on knowledge and information sharing, while remaining professional and neutral For efluencers, the credibility of professional BBS, blogs and microblogs is equal to recommendations from friends and family members. As such, the netizens on these platforms can be counted amongst their trusted friends. The credibility of customer review websites, Wiki, Q&A websites, brand’s official sites and SNS is scored 8 and above, so they can be trusted too. In comparison, the credibility of IWOM on e-commerce sites, group purchase sites and video sites remains a little bit lower because they may be driven by commercial interests. The credibility of LBS and social bookmarking is pretty low because there is little content and relatively loose relationships. Figure 2.4 Efluencer’s Platform Preference Professional BBS 8.6 Blog 8.5 Microblog 8.4 Customer review 8.2 Wiki 8.1 Q&A 8.1 Official sites 8.0 SNS 8.0 E-commerce 7.9 LBS 7.7 Group buy 7.6 Video sites 7.6 Social bookmarks 7.5 Data source: ““CIC 2010 efluencer survey” ; sample size=300© 2011 CIC An Overview of the Evolution of Chinese Social Media P32

Chapter III: The Connecting Threads of Chinese Social Networks Efluencers not only gain knowledge of brands and products via IWOM, they are also early adopters of trends and the first to spot special offers With reference to Philip Kotler’s theory about consumers purchasing decision making process, in CIC 2009 White Paper “Making sense of IWOM”, we divided consumers’ purchasing decision process into 6 steps: Needs Arousal, Brand Awareness, Selection of Alternatives, Evaluation of Alternatives, Purchase Decision and Post-purchase Behaviors. Knowing the product before making a purchase: In “CIC 2009 Netizen Survey”, 34.6% of ordinary netizens had needs aroused by IWOM and 56.3% got to know brands through IWOM. In “CIC 2010 Efluencer Survey”, the ratios of these two were up to 56.2% and 62.4% respectively. As such, IWOM has much potential in arousing consumer needs and then boosting consumption. Comparisons during the purchasing process: The results of efluencer study show that efluencers are good at using social media to form a personalized purchasing plan. The purchasing decision and review: IWOM plays a decisive role in forming final purchase decision for both ordinary netizens and efluencers (about 60%). Also, almost 50% of netizens will inquire or share usage experience after purchasing. It suggests that social media can be a highly efficient platform or tool for after-sale service and customer relationship management. Figure 3-9 Purchasing Decision Process: Ordinary Netizens Vs. Efluencers Ordinary netizens 56.3% 58.7% 47.5% 41.5% 36.2% 34.6% Post- Needs Brand Selection of Evaluation of Purchase purchase Arousal Awareness Alternatives Alternatives Decision Behaviors 52.9% 47.6% 56.2% 53.3% 57.6% 62.4% Efluencers Data source: Ordinary netizens data from “CIC 2009 Netizen Survey” , sample size=520; Efluencers data from “CIC 2010 Efluencer Survey” , sample size=300;© 2011 CIC An Overview of the Evolution of Chinese Social Media P33

Chapter III: The Connecting Threads of Chinese Social Networks Efluencers are loyal IWOM contributors, willing to share knowledge and experience For efluencers, usage experience sharing posts rank top (nearly 80%). Product evaluation posts and shai posts are second and third place respectively (above 50%). Figure3-10 Efluencer Post Rankings by Topic Angle Usage experience sharing 79.9% Product evaluation 54.4% Shai products 53.8% Q&A 47.9% Disclose bad experience 30.8% Brand campaign 23.7% Forwarded news 18.3% Brand story 15.4% Advertorial 8.9% Data source: “CIC 2010 efluencer survey” , sample size=300 Although a virtual identity can make people question the credibility of IWOM, social efluencers hold themselves up as examples; if you have the knowledge and are good at utilizing Internet tools, IWOM can not only be trusted but relied upon. We believe that, as netizens increase their level of understanding, more will become efluencers. The average netizen’s use of social media and IWOM will evolve.© 2011 CIC An Overview of the Evolution of Chinese Social Media P34

Chapter III: The Connecting Threads of Chinese Social Networks Segmentation of efluencers’ roles Although efluencers do not command the same attention as net stars, they tend to have distinct personalities. In the “CIC 2010 efluencer survey”, we found that there were two key motives driving efluencers to participate in the social network: social influence and self expression. On one hand, many efluencers care about their influence in the whole social network, which is the internal motive to be efluencers. On the other hand, many efluencers prefer self expression and want to be outstanding, which is the external characteristics of those efluencers. Based on these two dimensions, we divided efluencers into 7 categories. Figure 3-11 Seven Categories of Efluencer Data source: “CIC 2010 efluencer survey” , sample size=300 The number in the circle stands for ratios of each category (for reference only) Efluencers more interested in gaining social influence than self-expression The Pundit: logic based commentators, using objective, professional language The Know-all: inclined to learn and share knowledge The Moderator: take on management responsibility within the Internet community Efluencers who care more about self expression than social influence Fans: Passionate and emotional about brands or celebrities Trend-setters: at the forefront of social networking, digging out freshest news and spreading gossip Stars: sensational in style, commanding influence and notoriety within the community Knowbies: well versed in Internet language and familiar with communities. They sometimes show off the most current net trends, protective of their status in the Internet communities.© 2011 CIC An Overview of the Evolution of Chinese Social Media P35

Chapter III: The Connecting Threads of Chinese Social Networks In the following section, we will examine the similarities and differences among these seven types of efluencers using survey statistics. Although roles differ in terms of degree of activity, these efluencers are important parts of the social media stage, with key characteristics and inescapable influence. Figure 3-12 Efluencer Demographics Data source: “CIC 2010 efluencer survey” , sample size=300 • Reflecting real life, to achieve an elevated station on the social Internet, like that of a moderator, you need to be qualified. As such, netizens below the age of 20 are rare and in some roles, pundits for example, 70% will have a bachelor degree or above. • Among fans and stars, young women account for the majority. Those with a professional training college or below education are more likely to become fans. • Knowbies are mainly young men, most are below 30 and 60% have a bachelor degree or above.© 2011 CIC An Overview of the Evolution of Chinese Social Media P36

Chapter III: The Connecting Threads of Chinese Social Networks In order to help us understand the characteristics of these different roles more vividly, we will use the following figure to illustrate: Figure 3-13 Efluencer Persona Moderators: Mainly over 20, they Based on the Internet community’s structure; are enthusiastic, enjoy the moderators are easiest to identify, stars have administrative authority and the largest influence and know-alls are proactively maintain the community. everywhere. In terms of network content; pundits focus more on specific topics and in- Pundit: Compared with depth discussion, trend-setters pay attention moderators, they tend to be more to fresh and funny information and fans mature, more highly educated and keen on answering questions for discuss their favorite brands or celebrities. other netizens. Knowbies often use the latest Internet language and are the most sensitive to latest Know-alls: Tend to follow online trends within the community. They’re also the discussion closely and when they speak, they give mature key blending ingredient of the community consideration to all aspects of atmosphere. a question. Star: Predominantly female, they 3.4 Social efluencers workshop have great influence within the community, preferring to express If we consider social networking in China to their views and evaluate products. be a tree, net stars are the flowers, efluencers are the trunk and the spectators are the leaves. With that in mind, we have to find the Fans: Mainly young women, under best way to encourage development of the 30, less well educated and more efluencers, stimulating their creativity and driven to make friends. promoting growth across the network. Trend-setters: More highly So, after the “CIC 2010 efluencer survey”, we educated, they’re keen on invited seven different types of efluencers to releasing the latest information, discuss their views on social media via online like secret pictures of new cars. community. We will return to this in the second installment of our “From Social Media Knowbies: Well versed in net to Social Business” White Paper series topic language and familiar with the community. Mainly young men, two, “Online efluencer Workshop”. their emphasis is on knowledge and improving their skills.© 2011 CIC An Overview of the Evolution of Chinese Social Media P37

About CIC About CIC CIC is Chinas leading social business intelligence provider. CIC enables businesses to fully leverage the power of social media and (Internet Word of Mouth) IWOM intelligence across the organization. Since coining the term IWOM in 2004, CIC has pioneered the industry to help companies meet their social media marketing and social business needs by providing customized research, consulting services, syndicated reports, as well as technical solutions and platforms all via an objective, third party perspective. In addition to helping companies leverage social media intelligence for more informed decisions, CIC is monetizing the social business industry in China by creating an integrated social business support system. CIC utilizes its own patent pending technology to capture millions of online conversations and “makes sense of the buzz” by assembling them into easy to understand intelligence and provides interpretation which informs strategic decisions and leads to action. CIC gathers and mines over 100 million naturally occurring consumer comments every month from a range of uniquely Chinese social media platforms including blogs, BBS and social network sites and applies its unique, China-derived methodology and indexes to provide a detailed and comprehensive picture of the social media landscape and its implications for business. CIC has well over 2 billion mentions of brands and products from well over 1 billion consumer comments that have been indexed and archived. CIC has strong, long term retainer relationships with multinational agencies and Fortune 500 companies, including Nike, Pepsi, Intel, L‘Oreal Group, BMW, P&G, Unilever and many more. Copyright Statement This report is copyrighted material owned by CIC. Any improper use of this document or its content will be considered a violation of CIC IP copyright and CIC has the right to take legal action. An Overview of the Evolution of Chinese Social Media

CIC white paper archive Find more CIC white papers on our CIC slideshare site: www.slideshare.net/CIC_China 2010: Chinese Consumer Report (in collaboration with Roland Berger) | view 2010: Internet word of mouth proven to have impact (CIC and R3) | view 2010: ExpoSay: Shanghai Expo tickets are the focus of intense buzz in Chinas Social Media (Edition_1) | view 2009: Making Sense of IWOM Topic 1: IWOM White Paper on the Role of Internet Word of Mouth in Driving Purchase Decisions | view Topic 2: How IWOM is generated and disseminated | view Topic 3: How Brands Can Participate in Online Communities | view 2009: Chinese Consumer Report (in collaboration with Roland Berger) | view 2008: The Internet is THE community Topic 1: The Chinese IWOM Landscape | view Topic 2: Alternative Ways to Measure Internet Community Dynamics | view Topic 3: The Diversity of Chinese Net Language | view Topic 4: Reshaping the Relationship between Brands and Consumers | view 2008: Tuning into Sports IWOM | view 2008: Tuning into Notebook IWOM | view 2007: Whats Driving Auto Buzz | view 2007: The Talk About Phones | view 2007: Word of Health: China | view An Overview of the Evolution of Chinese Social Media

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Site: www.ciccorporate.comBlog: www.seeisee.comFounder Blog: www.seeisee.com/samIWOMmaster platform: www.iwommaster.comIWOMdiscover platform: discover.iwommaster.comIWOMexplorer platform: explorer.iwommaster.com An Overview of the Evolution of Chinese Social Media

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CIC 2011 White Paper: From Social Media to Social Business Topic 1: An Overview of the Evolution of Chinese Social Media

by SEEISEE on Apr 15, 2011

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CIC 2011 White Paper: From Social Media to Social Business Topic 1: An Overview of the Evolution of Chinese Social Media — Document Transcript