HONG KONG -- Douglas Zhang describes himself as "a QQ person through and through."
A "VIP" subscriber to QQ, China's most popular instant-messaging service, the 24-year-old Beijing information-technology professional has more than 100 QQ friends in his contacts list and keeps several premium QQ numbers, which each cost him 10 yuan ($1.43) a month. In addition to messaging, he reads the news on QQ.com and participates in discussions in one of the eight QQ chat groups he has joined.
"I log in once connected to the Internet, in the office and at home," Mr. Zhang says. "I spend over 10 hours on it every day. The real chatting with friends might only take around 10 minutes. I just want to be there."
Lots of others want to be there, too. Of China's roughly 210 million Internet users, there are approximately 60 million instant-messaging, or IM, users, CCID Consulting reported in December. Many of them hold multiple accounts for different sets of friends and contacts, or because they have shed old online identities and taken on new ones. Unlike email services in China, IM accounts often don't require people to register with a real identity, though both email and IM are monitored by government censors.
Walk into any Internet cafe in China, and it is a good bet almost everybody will have an IM window open and will be chatting with friends, perhaps while playing an online game or conducting a search. In the office, the breeze of chat flows through the open IM windows as people work their Excel spreadsheets. Last week, countless Chinese learned of the nation's massive earthquake through a flurry of online messages on QQ.
"Young Chinese people don't ask one another for email addresses. They ask for QQ numbers," says Kaiser Kuo, group director for digital strategy for Ogilvy & Mather in Beijing. Shortly after the quake, Mr. Kuo himself started using the Twitter microblogging service, while his wife kept windows open for both QQ and MSN to share information widely.
The Chinese IM market is dominated by Tencent Holdings, of Shenzhen, with its QQ platform. QQ's active accounts have reached 315 million, a figure that is boosted by people opening multiple accounts, according to data released by Analysys International last week. QQ is China's No.1 IM service, with a 79.6% market share. The closest rival, Microsoft Corp.'s Microsoft Messenger, which mainly targets business users, had about 16.5 million active accounts by the first quarter.
Smaller players include POPO, from NetEase.com Inc., Sina UC, from SINA Corp., and Google Talk, from Google Inc., all busily expanding their user groups. Earlier this year, Baidu.com Inc., which operates China's top search engine, launched its own instant-messaging product, Baidu Hi.
It can be a lucrative space. Tencent recently reported that first-quarter profit jumped 84% from a year earlier, driven by a surge in Internet value-added services, including QQ. Revenue rose 85%. The company, about to become the first Chinese Internet stock on Hong Kong's blue-chip Hang Seng Index, is laying plans for a bold expansion.
Tencent monetizes its QQ brand aggressively. Formally launched in February 1999 as a simple instant-messaging platform, QQ has gradually evolved into a full social product with an array of services, including message boards, blog groups, chat groups and digital commodities. These include virtual clothes and furniture that users can purchase with QQ coins -- a virtual currency Tencent invented that has taken on real market value -- to dress their avatars, or online personas, and decorate their digital houses. Many young Chinese grew up with the product, developing a QQ lifestyle and even a new online language, "Language from Mars," mainly used in QQ chatting and in Qzone, a multimedia blog service. (For example, 3Q means "thank you.")
It is all going on in the context of a burgeoning Chinese Internet population, which rose 53% to 210 million at the end of 2007 from 137 million at the end of 2006, according to the state-owned China Internet Network Information Center. The Center puts China at just five million users short of surpassing the U.S. as the world's largest Internet market.
Those sorts of numbers are a magnet to foreign players, including social-networking sites. MySpace China, a joint venture in which News Corp., owner of The Wall Street Journal, has a stake, set up an office in Beijing last summer. Facebook Inc. ramped up its move into the market in March by inviting its China-based users to help translate the site into Chinese.
But foreign companies eager for these eyeballs will have to adapt to a distinctive market. In the U.S., roughly 70% of Internet users are over the age of 30; in China, 70% are under 30. While America's Internet users are sending email messages and surfing for information on their personal computers, China's users are downloading video and music into their cellphones and MP3 players or posting on online message boards, with more than one-third of the nation's Internet users on the boards on a regular basis. The boards are home to vibrant online communities where friendships made online extend offline.
Those habits have helped turn IM into a social-networking medium in China, despite the availability of proper social-networking sites such as Xiaonei.com. For example, Mr. Zhang, the Beijing IT specialist, prefers real-time conversation to Web-page-style text communication, and says he gets a "strong sense of presence" when chatting with friends on QQ, aware that on the other end someone is busy typing an answer.
Proper social-networking services are typically based on people using their real names to register, whereas Chinese love the Internet largely because they can express themselves anonymously, without fear of reprisal from government censors or the police. People usually choose not to include real names in their email addresses, and they use online names when posting to bulletin boards far more commonly than in the U.S.
MySpace China's social-networking efforts focus on a "sincere, equal, free and tolerant" Internet atmosphere where like-minded users can find one another more readily than through IM, says spokeswoman Julia Zhu. She adds that the company has a separate IM service "to provide a tool of immediate communication to our users."
Facebook had no specific comment on the challenges IM might present to the social-networking business in China.
If IM is a social creature for young people in China, it is also a serious business tool for them.
"Managers use it to manage their teams, and sales staff, for instance, will have a meeting with a prospective client, go back to the office, add them on QQ or MSN and then contact them and cultivate them as a contact or client after that," says Mr. Kuo of Ogilvy.
In a company at which Mr. Zhang used to work, he recalls, "we built a QQ chat group for people in the office to communicate. Whenever I had something to say, I said it in the QQ group, without really walking in the office. That saves time and energy!"
By: Juliet Ye
Wall Street Journal; May 22, 2008
