Entrepreneurial internet users in China are taking full advantage of the massive garssroots user base of microblog giant Sina Weibo

September 12, 2013 Leave a comment

Entrepreneurs cashing in on Sina Weibo

Staff Reporter

2013-09-12

Entrepreneurial internet users in China are taking full advantage of the massive garssroots user base of microblog giant Sina Weibo, reports the Guangzhou-based Nanfang People Weekly magazine. Sina Weibo, which turned four on Aug. 28, currently has more than 500 million users, including 46.2 million active daily users. In April this year, Chinese internet juggernaut Alibaba acquired an 18% stake in the company for US$586 million, placing Sina Weibo’s total market value at a staggering US$3.3 billion. The company’s stock has also risen from around US$40 to as high as US$140, forcing former critics who claimed that the microblog has no value to eat their words.While Sina is not the first company to venture into the microblog sphere in China, it has become the most successful. Analysts believe its success stems from a combination of the company’s size and wealth of media experience, celebrity resources and its excellent relationship with the government.

Many entrepreneurs have developed sustainable business models on the platform by taking advantage of the microblog’s firm grasp on the “grassroots” segment of the user market.

Cai Wensheng, for example, went from high school dropout to millionaire by tapping into the interests of China’s massive grassroots user base. Cai, founder of domain navigation website 265.com, has more than 850,000 followers himself, and makes money from his commercial microblog accounts on popular topics such jokes and horoscopes. Four of his best pages have more than a million followers. Cai, now a top angel investor for internet startups, has also amassed a collection of “top search term” accounts which he plans to sell to the highest bidder.

Another success story is that of Xiao Junli, a businesswoman who along with strategist Ding Jisheng have generated an empire of 4.6 million followers on Sina Weibo with a multitude of accounts that focus on fashion, travel, romance, photography and other hot topics.

A third example is entrepreneur Du Zijian, who claims to make 20,000-30,000 yuan (US$3,300-4,900) a month just from his “Encyclopedia of Embarrassments” microblog page on Sina Weibo, which has more than 700,000 followers.

Together, Cai, Xiao and Du dominate the top 50 interest pages on the Twitter-like social media platform. At current market rates, a microblog page with more than a million followers charges around 3,000 yuan (US$490) to allow businesses to post directly on the page and around 2,000 yuan (US$327) to forward a post on the page. Prices are said to be on the rise.

Entrepreneurs are not the only people taking advantage of Sina Weibo’s mammoth user base. Tennis star Li Na, for instance, has nearly 22 million fans and regularly posts advertisements and semi-advertisements on her microblog page, which is said to generate more exposure for her endorsements than television commercials.

While many have figured out a way to make money off the site, the company itself is still struggling to find a way to make the most of its 500 million user base. Financial reports show that in the final quarter of last year, Sina Weibo made a net profit of just US$2.4 million.

 

Filed under TMT Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment