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We ‘ve all been reading a lot about the latest in the Social Networking Space(SNS) facebook, myspace etc etc ….But what’s keeping the Chinese busy…. especially when almost every 5th Chinese has access internet, a staggering 200Mill number of internet users……..

Here’s a detailed analysis (post on readwriteweb.com,covering the latest report from China Internet Networking Information center-CNNIC ) of the Chinese SNS and the Internet space

Do post your comments if you happen to know more about Chinese Internet Market

According to latest report from China Internet Network Information Center (CNNIC), by end of 2007, there are over 200 million Internet users (including 163 million broadband users) in China. 2008 is shaping up to be a very busy year for the Chinese Internet, and the Chinese market seems to be pulsing with social networking activity. But for Chinese Internet users, social networking has taken on a very different form than it has in Western countries. In China, the most popular form of networking may just be the traditional Internet forum system, or BBS.

That’s not to say traditional social networking is dead — far from it. You can find QZone which is owned by Tencent with the support of QQ’s over 220 millions active users. Then there is 51.com which proclaims 160,000 new users daily; Linkist and Wealink are two popular professional networks based in Shanghai; Tianji.com is another professional network based in Beijing and it has partnered with Viadeo, one of the world’s largest online business communities to create a premier business platform for online networking between China and Europe; Xiaonei, Zhanzuo and many others are sharing the campus social networking market.

With its massive user base, the Chinese market is naturally one of the most attractive places for Western networks to attemp to set up shop. MySpace has set up an office in Beijing; Facebook might acquire a Chinese SNS, Fenbei.com, and surely will have local presence in 2008; Friendster has done very well in the South East Asian market and expects similar success in China. Xing, a professional network from Europe, set up a Chinese office back in 2005; Last.fm is trying to be more localized in China to compete with 9Sky, Yobo, and 8box.

Surprisingly, though, one of the most popular methods for Chinese netizens to communicate exists far from the web 2.0 scene: traditional Bulletin Board Systems (BBS). BBS actually plays a very significant role in Chinese Internet life. In China, registered BBS users have reached 3 billion (one netizen might register at multiple BBS sites); 80% of Chinese sites are running their own BBS and the total number of daily page views across bulletin board systems has reached over 1.6 billion, with 10 million posts published every day. The BBS is an undiscovered and untalked about Chinese Internet phenomenon. To understand more about why BBS is so hot in China and how it will co-exist with modern social networks, we interviewed Kevin Day the CEO and founder of Comsenz Inc., owner of Discuz!, the first ever social platform – a BBS system – for the Chinese Internet. More than 400,000 BBS sites are built on the Discuz! system in China, or in other words, Discuz! controls over 70% of the Chinese BBS market.

The Phenomenon of Chinese BBS

According to a report produced by iResearch Consulting Group in 2007, around 36.3% of users in China spend 1-3 hours per day on BBS sites, about 44.7% of users spend 3-8 hours, and even 15.1% of users are on BBS sites for more than 8 hours each day. Over 60% of users will log in to at least 3 BBS sites more than 3 times each week.

According to the report, the primary reasons for using BBS sites is finding solutions to problems, general discussion, finding information, and sharing life experiences. 98% of users have contributed to a BBS by publishing articles, replying to posts, participating in polls, etc. Users tend to trust BBS sites because they think the information found on them is first-hand, updated frequently, and presented in a comfortable, community environment.

Chinese BBS life has apparently extended offline, as well. The report also says 64.5% of users have attended some offline events organized by BBS administrators or users. More than 80% of users are using BBS sites to search for information about products they plan to buy, and 61.7% of users are keen to ask other BBS users for opinions before making a purchase. Astonishingly, BBS sites are even acting as ecommerce hubs themselves, with 47.3% of users having bought products directly from a BBS.

The screenshot below shows a BBS set up by the fans of Jinglei Xu, a very famous Chinese celebrity and blogger. This site has over 65,420 registered users, and you can find thousands of online communities like this one built on traditional BBS software.

The History of Discuz!

If you ever log onto a Chinese BBS site, most likely it is built on the Discuz! system. Discuz! was originally developed by Kevin Day when he was at his first year in university. In 2002, the first version of Discuz! was sold to a Hong Kong based company, and in 2003, Day decided to discontinue his studies and founded Comsenz Inc. in 2004 in Beijing.

In 2005, Comsenz Inc. partnered with Zend and established the Zend China support center. Later in 2005, Day announced that Discuz! was going open source, which has been described by local media as an earthquake for the Chinese software industry. Comsenz Inc. got its first round of funding for around $10 million from Sequoia Captial, Morningside, and Google in 2006.

Now Comsenz Inc. has grown to a household name with 200+ staff and a complete product line that includes Discuz! (bulletin board), X-Space (social Network platform), SupeSite (content management system), ECShop (open source B2C and C2C system) and SupeV (online videosharing system). It is also running a few Internet services, including a free forum hosting service 5d6d, a free B2B shop hosting service Maifou, and a community advertising network Insenz. Day is just 26 years old, but he has been publicly recognized as the one of the most successful entrepreneurs born in 1980s.

The BBS and Social Networks

With 70% of Chinese BBS sites built on Discuz!, Day is obviously a key figure behind the phenomenon. So we asked him why he thought BBS systems have become so popular in China. “The first Chinese BBS was probably set up back in 1997. Like Email, BBS is one of the first Internet services recognized by Chinese netizens,” he told us. “Chinese like the communities, they are normally a bit quiet in real life but in Internet they love to express their opinion and to follow up some discussion of hot topics. BBS provides a perfect and easy-to-setup show stage for everyone. BBS has evolved as a media platform, it is not the main stream media yet and might never be in China, but the latest and hottest news are always from various forums, spread and discussed by millions of users.

“Take a look at how fast the blog grows in China, you will understand my point here. The BBS users are more mature, they are mainly at the age of 20 to 40, well-educated and with various professional background, and their contribution to all sorts of forums make BBS a valuable information source.”

With social networking on the rise in the Western world and also in China, we asked Day if he thought social networking sites would eventually replace the BBS in Chinese culture.

“BBS will not be replaced by SNS and they will not be the competitors to each other either,” he answered. “BBS is a must-to-have application in SNS, at least in China. The features of BBS can help the social network users to exchange their ideas efficiently. On the other hand, SNS is a people-centric networking platform but BBS is a topic-centric platform. SNS is to map the social relationship in real life into the cyber space, which in my opinion is one of the reasons people love Facebook; But BBS is there for users to follow the hottest topics and expand your social experience virtually. In BBS, people go there because they are interested in the topics, and whom they communicate with does not really matter.”

The Monetization of BBS

The global social networking market is still struggling to seek the best methods for monetization, but it seems that BBS sites have already found a way to drive revenue. Day introduced us to his Insenz product, a BBS-based marketing service that was launched about six months ago. At its core, Insenz is basically a Chinese version of Google’s Adsense/AdWord services focused on BBS sites. If you are running a BBS focusing on the mobile phones market, for example, you can join the Insenz advertisement program and get mobile phone related ads or articles posted on your BBS.

Insenz’s customer are from all sorts of industries, car manufacturers, telecommunications, IT companies, etc. Insenz will monitor user feeback (e.g. how many replies to the article, how many times the post has been viewed, etc.) during the campaign and issue a report to marketers that includes valuable first-hand marketing information. The BBS sites that participate in the marketing campaigns get a cut of the revenue.

Of course Insenz takes the advantage of Day’s Discuz! kingdom. But actually, in China, Insenz is not the only company offering this service. Daqi.com, which started as a portal service, is now also taking advantage of the BBS phenomenon for marketing purposes. Instead of distributing ads across forums, they invented a technology to help gather and analyze discussions about the products of their customers. Daqi closed its second round fund from WI Harper in 2007.

Conclusion

A universal BBS search engine will definitely be more valuable than blog search in China, though Day said that he would not bother to do this simply because he thinks the search engine giants Google or Baidu have better technology to implement it. It seems that Google China has noticed the popularity of BBS sites in the Chinese Intneret market, and have recently taken a stake in Tianya.cn, a very popular BBS-based social network with 6+ million registered users and 200,000 online users daily. So should MySpace, Facebook, and other traditional Western social networks endeavor to enhance their BBS features if they want to play in China?

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