If you have been planning to find new business opportunities in China, chances are you have heard two names repeatedly: Alibaba’s Taobao, and Sina’s Weibo. Expert commentary such as this article from China Economic Review  repeatedly emphasizes the marketing power of these two Chinese web services. This nature of boosting artcile, with plenty of figures and facts, and extensive reasoning, always makes an exciting read.

However, my research team and I have recently been internally discussing two fudamental questions:

• How exactly do Taobao and Weibo marketing work?
• Which should a client choose? Is it a “either Taobao or Weibo” situation in China? Will it be worth my while if I build both into the client’s campaign?

Taobao does furnish China business opportunities, in the form of solid revenue. Taobao (consumer to consumer) and its branch Tmall (business to consumer) are similar enterprises to online auction giant eBay. It’s an online sales platform. It’s entire function is about getting stuff sold, right here, and if possible, right now. It’s not exactly a platform to execute a marketing or communications campaign.  You can sell your stuff smoothly on Taobao, but need help from other sources to make your online store visible to as many Chinese consumers as possible.

On the other hand, Weibo is all about grabbing attention. You can write clever straplines/taglines, show full colour photographs and graphics, and (with a great campaign partner) send them viral on Weibo in a user-generated chain reaction. However, a viral Weibo chain reaction doesn’t sell a straw. Naturally, a commercially successful Weibo campaign needs a call-to-action — most commonly a link to your online store or website, so consumers can actually purchase or try your offering.    The conversion rate you enjoy is entirely up to the effectiveness and persuasiveness of your message and its execution.

By the nature of these these platforms, they’re complimentary.

Taobao’s icons of credibility, guaranteeing things like instant shipping, 7 days return, 30 days free repair, triple refunds if conterfeit, etc.

For companies that live on physical products or paid services, Taobao might be your best friend. The entry cost is very low. Just create a seller account, certify yourself with a Chinese ID, and instantly enjoy Taobao’s fully-fledged online store building tools, free site hosting, and the most powerful online payment gateway in China. Certainly your store won’t look as fantastic as something you built with today’s sophisticated web technologies and tools, but in return save a mountain of time and effort trying to implement your own Chinese payments gateway and maintenance of your server in an often challenging Chinese LAN internet environment.

Another advantage of starting a Taobao store over an independent website is credibility in the minds of Chinese consumers. By undertaking agreements to several Taobao conditions, the store operator gains the privilege of using a series of small logos for your store, and each of these little logos brings the vendor more credibility in the minds of the average Chinese online shopper than any other factor can provide. As we’ve written about on A source of light, the average Chinese consumer is extremely risk averse — and the consumer protections designed by Taobao are powerful incentives for consumers to shop only within Taobao.

For a certain type of vendor new to China or to Chinese ecommerce, building a user-base on Taobao before branching out into an independent ecommerce platform can be a sound strategy. For a subset of these vendors or brands (those which have accumulated remarkable success elsewhere alread, but just landed in China) Tmall would be a better choice.

For those vendors who have decided to join and use Taobao, the greatest challenge in their first months is making the consumer base aware of their presence.  There are hundreds of thousands of vendors on the platform, and competition is extremely high in every category. Taobao users primarily evaluate the trustworthiness of a vendor by accumulated credits, the lack of which is a big part of what defines a “new vendor”. A new vendor’s initial trading period will be slow, and consumers won’t pay that vendor very much attention.  The new vendor will want to activate sales however their marketing tools on Taobao are very limited. Of a pretty basic selection, the most effective is to purchase advertising impressions on Taobao home and search pages, however advertising rates are extremely high.

This is when your other new best friend kicks in: Weibo.

We really should use the term  “weibos”, a plural form of “weibo”.  When you talk about “weibo” in China, you are talking about generic microblogging services. A weibo is not one company, or one product, or one brand. There are at least five weibos under different brands in China, the most popular of them being Sina Weibo and Tencent Weibo.

The power of Tencent QQ IM. Real time count: 140,983,367 users simultaneously online. Captured on 6:00pm March 22nd 2012, a time when most users are supposed to be either having dinner or on way home.

Sina Weibo is what non-Chinese mean when they mention “Weibo”. This is because Sina introduced microblogging weibo service before any other Chinese player, and they registered the domain weibo.com. Therefore Sina enjoys first-mover advantage and much higher international visibility. As the China Economic Review says, the user base of Sina Weibo is currently around 250 million users.

On the other hand, Tencent Weibo started late, but quickly caught up in the game with several attractions:

• Seamless integration with Tencent’s QQ Instant Message and QQ Zone blogs. It’s almost safe to say every single Chinese netizen has a QQ account.
• Much lighter political c3nsorship than Sina’s offering.

Building upon the shockingly huge QQ IM user base (currently over 700 million existing QQ accounts), Tencent Weibo has grabbed about 310 million users.

The total user base of Sina and Tencent weibo adds up to 560 million, which, based on currently available numbers, means almost every Chinese netizen has a weibo account at either Sina or Tencent. The math might raise some eyebrows: microblogs are that popular in China already? Actually no. A lot of people have accounts on both sides, hence the weird number. So it would be ideal to execute parallel marketing efforts on both platforms, to ensure broadest coverage.

By combining effective (and free) marketing communication on China’s weibos and enjoying almost-frictionless sales conversions on Taobao is a tried-and-true method of hundreds of thousands of successful vendors in China.

Nearly 20,000 vendors selling “weibo marketing services” from bot followers to bot retweets on Taobao. Red rectangles highlight some of them even spending money on Taobao advertising space.

There’s even a grey space where Taobao sales and weibo marketing mingle together. As of this moment ,there are almost 20,000 vendors selling “weibo marketing services” on Taobao. The amazing things they do include but are not restricted to: getting your weibo account verified without requiring your ID, buying bot followers in thousands (to make you look like a key influencer), managing your corporate account for you, retweeting your specified weibo update for several thousand times. Although this truly combines the power of both, the integrity of such services is questionable at best. Don’t venture there.  Honesty goes a long way.

Feel free to consult us for more detailed guidance on how to make your Taobao store more credible, and how to make your weibo (whichever flavor) more popular.

Article by Kane Gao, Allegravita’s head of research.

ALSO AT A SOURCE OF LIGHT: Tmall’s new logo and it’s amusing heritage.