US Internet companies' top 10 mistakes in China (2)

3. Long term strategies v.s. Quick wins

US websites always have a long term plan. They spend lots of money on all kinds of useless marketing research and paperwork. They also plan for the many years in the future, do strategy, and set budget. It’s not easy to change after all these plans. Anyway since they have money and talented staff already, they can afford to progressively plan and develop. Though Internet is an abnormal industry, it doesn't work in the same way as those prestigious international companies who plan to lost for 10 continuing years as part of the overall strategy. Both ebay and yahoo have accepted their failures in China. If this is the destiny, it would be better to stand up and fight from the beginning instead of moving slowly.

Many competitors in China only seek quick wins. Their philosophy is Quick-Straight-Soon.   Mr. Ma, Yun (founder of alibaba.com, who took over yahoo China) used to setup gorilla-style team working in a closed camp, focusing on quickness, doing fast paced small cycles, and correcting mistakes on the run. US sites, on the other hand, usually build perfect plan and budget. If a trash can is not in the budget, it will take more than a month to be approved. It's generally doomed if everything has to be approved by US HQ.


4. Process oriented v.s. Goal oriented

I heard that Ma manages his team like gangs. First he sets a target, like: to achieve certain traffic number this year, or to get big registration next year, etc. Next, the entire team fights for the goal by all means. If the target is met eventually, everybody gets a good piece of the rewards. So his team uses whatever the method that may be effective: spyware, bundling, soft porn, and other inappropriate promotion approaches. A typical Chinese-style website doesn’t care about the process at all. Only result matters as long as it doesn't break the law.

However, US websites keep many metrics under lots of regulations. They have to maintain their brand image, keep the fame as an international company, and be professional with all the noble sentiments. They can only seek dozens of the short-term and long-term goals under all these premises.

5. Save user v.s. Meet user’s needs

One of few good things which US sites do well in China is more emphasizing on user experience. But they usually over cooked it. If considering too much about users, user friendly design can limit the growth. Chinese Internet users often need not much personal care. They make decisions by their own, but not following yours anyway.

Do you know the real reason why ICQ failed and quitted from China market? Americans paid too much attention on user privacy issue. When they launched the service in China, user could only keep their information on the local computer. If switching to a new computer, in order to best protect user's privacy, all of your previous data are not available. This is perfect for using ICQ on your home computer. However, it's completely unfit for Chinese user. ICQ has never recognized it even after leaving China. However, as the technical contact of ICQ's partner company in China, Mr. Ma, Huateng learned the technology of instant messaging and understood the Chinese users’ habit of getting online in Internet cafes (US employees would never understand what Internet cafes are). So, he made only some minor changes disregarding the so-called privacy protection which is only concerned by those white-collars, and then kicked ICQ out of the China.

6. Applaud with bad return v.s. Profit without much praise

Many US sites are well praised in China but can not make money. They all have the amazingly same marketing strategy: hire a 4A advertising company to design a set of elegant advertisement; put ads on subways and bus stations; make some web based ads for the niche market of white-collar; pay big bucks to top 3 portals to distribute the ads; spend a lot to buy google keywords (note they don't use Baidu, since they only see google and msn in their eyes). Everybody likes their ads, but no one visits their websites. Even if there are a few visitors, the cost is way too high. Sometime it costs more than 1000RMB (130$) per new user. And they still found excuses of not having growth on traffic, such as in order to establish brand images, etc.

Chinese competitors forever pursuit traffic as the first priority. They believe the promotion standard of getting one visitor for every penny they spend. Not matter what next, they want to get the users to at least visit their sites. They think that big traffic is the best promotion for brand and all those falsifying brand establishments are useless. The only purpose of marketing is to bring in users, but not products. And they always want to pay less but accomplish more.

US sites normally have the plan to pay 10,000RMB for 100 high-end targeted users. Chinese sites, on the other hand, spend 1,000RMB to recruit 10,000 random customers. However, there are for sure 1,000 high-end users among them. So there is a huge difference between the efficiency. Common sense is so important, but is often forgotten by the smartest people.