Date
16 August 2017

Has Sina Weibo lost it?

Has Sina Weibo lost it? That’s the question observers are asking as talk grows of more people switching to Tencent’s popular messaging app WeChat from the Twitter-like Sina Weibo.

The China Internet Network Information Center (CNNIC) issued a report two weeks ago, stating that as of December, the number of microbloggers in China had fallen 9 percent year on year to 281 million.

The report triggered fears that Sina’s (SINA.US) advertising revenue will be hit. Its share price has tumbled 17 percent since the report was released on Jan 16, vaporizing US$960 million of its market value to leave it with US$4.67 billion after a week.

However, senior CNNIC analyst Liu Xin told the 21st Century Business Herald that the report was misinterpreted. The report is about the microblog ecosystem as a whole, not any specific company. “Microblogging broadly includes microblog products developed by Sina, Tencent and Sohu etc,” Liu said. 

Numbers from Weibo may give further reassurance that the company is not going off a cliff. Sina is the only site that releases regular statistics on its user base. The number of Weibo accounts was at 324 million back in March 2012, growing 65.5 perent to 536 million in the next 12 months. It also had 60.2 million active users by September, nearly doubling in 18 months.

Another upbeat metric is the sustained popularity of Weibo’s Lunar New Year marketing campaign called “Let the red packets fly”, in which retailers give out “red packets” with discount coupons or gifts to potential customers. Just three days into the campaign this year and 280 million red packets had been given out, on par with the record set last year.

Whatever happens, senior branding consultant and blogger Zong Ning said, WeChat won’t easily replace Weibo. Zong said the ties between WeChat users are typically a lot stronger than the ones between Weibo contacts. That’s because when a user adds someone to their WeChat account, in most cases, the two know each other.

While this is not the case on Weibo, where users can follow a total stranger’s Weibo account. The potential audiences that Weibo can reach, therefore, are a whole lot wider, according to Zong, making Weibo better able to generate hype than WeChat.

However, because of its enormous user base, Weibo’s growth will soon plateau. But if Weibo can strengthen its foothold in lower-tier cities — something that other social networking sites like Renren.com and Kaixin.com have so far failed to do — it stands a good chance of making steady user gains.

Weibo is already working with popular TV talent shows like “The Voice of China” {中國好聲音} and “Super Boy” {快樂男聲} to attract new users and followers in those cities. The initial results  of the strategy are encouraging. Weibo users from second- and third-tier cities accounted for 43 percent of its total last October, rising 4 percentage points in just six months.

More time is needed to see if Weibo will succeed on this turf, but at least its unique features remain intact and the company is making the right moves to tap new markets.

– Contact the writer at [email protected]

SK

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