Every business can learn from the LinkedIn China Shutdown and can leverage this knowledge to find growth in the Chinese market.
Key takeaways from this article will be:
- What are the mistakes done by Microsoft while promoting Linkedin in China
- What Linkedin could have done better to grow in the Chinese market
- What are the alternatives that any B2B business can use in China to increase sales
The LinkedIn China Shutdown has again brought to our awareness the complexity of operating IT platforms and social media in China. China has heavy regulations, tight supervision by the government, and expensive and complex operations and procedures. While most media channels took failure for granted, our analysis has shown a different perspective for the LinkedIn China Shutdown. We believe that Microsoft’s failure mainly resulted from very poor performance and low revenues from in the region. To put it plainly, if the Chinese government saw LinkedIn’s operations in China as a threat, they would have banned it a long time ago. Our analysis of LinkedIn’s poor performance will be pointed out in this article, and it should be taken into consideration when embarking on new solutions and products in the Chinese market.
For small businesses and multinational companies, this complexity or government pressure can be a considerable challenge. But, for some, it can just be a good and obvious excuse for low performance in the market, even for a great company like Microsoft. This article will discuss the main challenges and opportunities of the unique digital platform structure in China and drill down to the LinkedIn Shutdown incident to learn how to gain a competitive advantage over your Western competitors and how to boost your sales in China with a cost-effective method.
The first misconception Western companies have towards the Chinese social media world is that WeChat, the most popular messaging platform, is the key marketing tool in China and that every company that wants to sell in China must manage its official page. This notion was true up until two to three years ago. Still, there is such a massive saturation of marketing content in the platform. Users tend to run away and look for quality content on-demand rather than constantly being fed with advertisements. Therefore, this article will mainly discuss other useful platforms, mostly for B2B companies.
As recently announced by the BBC, the Microsoft board of directors has decided to shut down Linkedin’s activity in China due to the challenges caused by the complex business environment and compliance with the Chinese government. In the release sent on October 14th, the company has also announced to launch an alternative platform that will have fewer social features such as news feed, polls, and articles; it will only focus on recruitments. The new platform will be called InJobs and will be released soon.
For many Western companies, this notice was shocking due to the important rule that Linkedin has in their communications to the Chinese market; they were caught off-guard without an alternative. The fact that Linkedin allowed many Western Sales representatives to engage with potential Chinese clients in an easy-to-use for non-Chinese speaking users was a key factor in their sales endeavors in China.
However, this incident was not a surprise for many social media experts who have foreseen this upcoming issue. We could have predicted this mostly because Linkedin was almost the only Western platform that was operating in China, while all other platforms owned by US-based tech companies do not operate in China. Here are some examples of localized alternatives to the platforms we use daily:
To better understand the situation, we can look at two other platforms that are not active in China, which have a similarly high risk to attract the Chinese government’s attention: Youtube and Quora.
Youtube – This widespread video content sharing owned by Google is banned in China. Youtube’s place was taken by various local platforms such as Youku, Bili Bili, Qiyi, Sohu, LeTV, Tencent Video, PPTV, 56.com, and Function. Chinese video content consumption is constantly on the rise and it is a great opportunity for foreign companies to reach new consumers and increase their brand awareness. However, in order to share content on these platforms, you need to have a local sim card, submit your personal address and connect your personal account to a local ID; all of these requirements make it almost impossible for a foreigner to penetrate. There are some creative ways to open a video platform, but it is costly and time-consuming. There are local agencies who assist in the process and can also support other localization solutions such as subtitles and voiceovers.
Photo Qiyi by Baidu – Since 2015, it has been the leading video platform in China, alongside Bili Bili (Source: Qiyi Website)
Quora – The social Q&A platform is not active in China, and it is replaced by a rapidly growing platform named Zhihu. Its mother company has recently gone public in the New York stock exchange, and it is known to be the leading alternative of Quora in China. More and more Chinese users tend to look for professional information on this platform and answers to their day-to-day questions and business-oriented solutions. This growing platform is rising to be one of the most dominant players in any future digital marketing endeavors due to its reliance on the wisdom of the mass. The main advantage is that a Zhihu campaign can lead you from 0 exposure in the market to tens of thousands of impressions on a low budget. However, the content strategy should be handled by a professional and creative team to assure its success.
- Zhihu Platform (Source: Zhihu website)
In relativity with these two platforms, Linkedin as a social media platform had won a great amount of freedom in the Chinese market and grew its operations with hundreds of employees in Beijing and Shanghai.
Furthermore, unlike other social media channels such as Facebook and Instagram which are banned in China, the Shutdown was announced by the company itself and not the Chinese government. This gives us a hint that the Chinese government was not the reason for the shutdown.
LinkedIn Shutdown: What Happened?
Linkedin – even before the recent shutdown, Linkedin China was not such a successful project, due to several reasons:
As a global platform, LinkedIn tried to satisfy everyone simultaneously. However, when you are trying to find a middle ground between people from all around the world, with different backgrounds, cultures, habits, UX and UI preferences – you are doomed to fail. Chinese users did not rush by the masses to the platform, and recent studies show that LinkedIn has only 51 Million users in 2021, while its biggest competitor in China – the MaiMai platform had over 800 Million registered users. This is over 1600% of the amount Linkedin has. The Local LinkedIn alternatives in China answer Chinese consumers’ needs and habits and therefore gain more and more popularity.
An example of Linkedin’s failure to satisfy the Chinese market can be found in Linkedin choosing mediocre voiceover translations for its Chinese users. This was a non-appealing user experience that was very different from the Chinese user’s browsing habits.
All of the above made the Chinese feel like guests on the platform, not the landlord. (To learn more about this cultural aspect, please read our blog about content localization in China and “Guochao“).
Before the Shutdown, many core features were fully blocked by LinkedIn’s self-regulation in order to avoid a clash with the local government; as a result, the news feed did not have any videos in it, sensitive posts were filtered out, and the important employer hiring dashboard was completely not available for Mainland users.
Weak Monetization of the Users
LinkedIn’s core business model relies on selling premium user packages, HR profiles, and advertisements. But, due to the rising polarization of Western and Chinese economies, and also due to the Covid-19 situation, only a few Chinese users have realized the potential of purchasing the premium package and enjoyed the freemium one.
Another reason the Chinese were reluctant to pay for premium membership was that they did not see the need to improve their branding abroad and in English. As a result, it is very unusual to witness a Chinese user profile with a premium badge until today. For reference, the LinkedIn alternatives in China’s monetization are working greater volume, so they can provide better pricing to its audience.
Language barrier is one of the most prevalent challenges of Chinese business culture. LinkedIn failed to overcome this challenge and did not address the core problem of building business relationships between Chinese and Western business people. The most absurd issue is that LinkedIn, a part of the omnipotent Microsoft corporation that owns Bing and Bing Translator, could integrate an API into the P2P chats and help Chinese users feel more comfortable using the platform. To Chinese users, this is a serious dealbreaker and another reason to choose the LinkedIn alternatives that the Chinese market offers.
Button up Decision Making
When corporates determine their global strategy from the HQ that is based offshore, there is a constant clash with the reality in the target market. Furthermore, the Chinese business environment is constantly changing; therefore, a decision made from 6000 miles away by an executive who is not familiar with the market will most likely fail.
Decision-making should involve a top-down approach and ideation to maintain an execution plan based on the realistic situation that involves the challenges and risks in the market.
For small companies and multinational companies alike, learning from these issues can absolutely improve your performance in the Chinese market.
What is Necessary for Western B2B Companies to Continue Promoting Their Business in China?
The new situation demands ambitious companies to rethink their strategy and use the Linkedin alternatives that China has to offer.
The most efficient solution is choosing Maimai, a China-based career and social networking platform founded in 2013 by Lin Fan. The platform was modeled after LinkedIn and currently hosts more than 8 million users each month.
Maimai differs from its competitors; Maimai gained momentum over the past two years with localized features, such as anonymous chat, mobile-first design, real-name registration, and partnerships with Chinese corporations.
To learn more about this incredible platform and how we can help you turn this challenge into a great opportunity, we recommend reading this article: https://www.xinergy.global/maimai-the-chinese-linkedin
For more information, please contact us now for a free consultation.