The original article was published in Chinese on “IT Times”, a famous magazine in IT field in China. I think there are a lot of merits in it and translated the key points into English.

While we are still discussing the success of eBay, Amazon, Yahoo, and Google in the textbooks in our universities, those Internet Giants actually failed badly in China. On the contrary, their Chinese competitors achieved great successes by going the completely opposite way.Those American Internet websites failed mainly because of their ways of thinking. Even if they have the best people, the biggest capital, the most advanced technologies, they will continue to fail if they don’t change their ways of thinking and their ways of doing things in China. What contribute to their failures then?

Reason 1: “Only focus on the market of white collar middle class people and ignore the majority of regular people” v.s “Treat the white collar market and the market of regular people equally. ”

Ignoring the majority and only focusing on the high level, white collar class are the key reason of failure of the American Internet websites. But, they will never realize that.

No one in the American Internet Giants will understand it because the employees of those American companies are most from Hong Kong, Taiwan, Singapore or have oversea education background. They are all white collar class staying only in the modern business buildings. All they know about China are within those modern buildings. Their product design, website style and promotion targets are only for the white collar class who stay in the same modern buildings as them. They only target the Fortune 500 companies and never care about what the majority of people want and the needs for middle or small sized companies in China.

The education background, interests and vision of the designers of American websites turned them against of the regular, average majority. They think the kids playing in the Internet Café and the people get online from thousands small towns in China are inferior, even those two kinds of users adding together exceed half of the Chinese Internet users. They dislike the tastes of those “regular” people, e.g. the “Super Girl” show.

They only know Gmail, never use 163 mailbox. They only use MSN, not QQ, because they would like to demonstrate how elegant they are. They would rather see their websites closed, than see a website without taste and only satisfy the needs of the regular people.

They are doomed to fail if they don’t want to satisfy the regular people.

Reason 2: “You can hate me, but don’t forget me” v.s. “You can forget me, but don’t hate me”

American websites are afraid of negative news. Chinese websites are afraid of no negative news. Chinese website would like to be “hated” by thousands of people because that’s the way they will be remembered by the market. That’s the way they get their traffic.

The salaries of the employees in American Internet companies are 10 times of their competitors in Chinese internet companies. They are so afraid of losing their jobs. Their philosophy is no mistake first, getting the results second. They never want to take any risk. That’s the reason they are beaten by their Chinese competitor badly.

Reason 3: “Think in long term” v.s. “Think in short term”

American websites always have a long term plan. They spent huge money doing all kinds of useless marketing researches on paper. They are planning for years. They have strategies and budgets. The worst thing is it’s not easy to change those plans. It may take more than a month to get an extra garbage bin from the American headquarters if it’s out of the budget. If every change has to be approved by the headquarters, the American websites are doomed to fail in China.
Chinese websites are consistently thinking in short term objectives. The time to market is the most important. They made mistakes and quickly corrected them along the road.

Reason 4: “Goal is not everything. The method matters” v.s “Goal is everything. We don’t care how to get it.”

Chinese websites set a single performance indicator every year and fight to get it. As long as the ways don’t break the law, they will use them.

American websites have many indicators and many rules. They care about the professional ethics and the brand image the most. After that, they have dozens of long term and short term business objectives and performance indicators.

Reason 5: “Act as the savor of the users” v.s. “Follow users’ needs”

One good thing of the International Websites is they really care about user experiences. However, sometimes, they think too much for the users. Chinese users need more options. They don’t need you to choose for them.

For example, American cares a lot about their privacy. But Chinese don’t care too much about it. The American messaging software giant, ICQ, did a lot to protect the privacy of the users and make the software hard to use in internet cafes. Their Chinese competitor QQ beated it out of the Chinese market by simply getting rid of some of the restrictions of ICQ to satisfy the needs of the Chinese internet users in the small internet cafes.

Reason 6: “Passive gentleman-style advertisement” v.s. “Active, even forceful, sales”

The advertisements of international Internet websites are focus on their brand names. It’s hard to attract the traffic. Chinese websites put out not only brand advertisements, but also lively events to attract eye-balls. They get the real revenues as well as brand acknowledges.

For example, take a look at the ads for eBay and TaoBao. They all listed their products in banner format. However, eBay put up products like iPod or Zippo. Many Chinese customers cannot read English and don’t know what those products are. TaoBao put up some attractive products like sexy underwear to attract the eye-balls. The results achieved by TaoBao are 10 times more than eBay.

Maybe the international internet websites know about the trick. However, their elegant attitude prevents them from doing it.

Reason 7: “Excellent quality but no user” v.s. “Bad quality but plenty of users”

The market promotion ways of international websites are unbelievably similar. First, they have the 4A advertise company design a set of graceful flat advertisements. Then, they put them in subway or bus stations. They will design another set of web ads designed for the taste of narrow market of white collar middle class, and put them to the biggest 3 portal website in China. They spend a lot of money buying key words from Google, but never buy from Baidu.

The ads for the international websites are beautiful and applauded by many experts. But they cannot attract traffic to their websites.

Chinese websites always focus on traffic. If I pay one cent in advertisement, I need to attract one more people to my website, no matter who he is. The traffic is real.

Reason 8: “Communicate through email and MSN” v.s. “Phone call and face-to-face communication”

Employees of the international internet companies spend 90% communicate through emails with their colleagues and clients. They are proud of their grammar-perfect English. Sometimes, it needs 10 emails to resolve one small thing that can be done through one phone call.

When Hongwei Zhou took over Yahoo China, he had to fire those employees who only communicated through email to get the business back on track.

The employees of the international internet companies used English as their working language. This greatly impacted their efficiency. They never knew they are doing business in China and should use Chinese language and the Chinese ways of communications.

Reason 9: “Beautiful and clean” v.s. “Crowded and exciting”

American websites are always beautiful, concise, clean and elegant. Good things always hide deeply inside the website. 20% of the white collar middle class users like it but the rest 80% majority feel cold and leave right way.

Their competing websites are lively crowded, bustling with noise and excitement. All the good stuffs, the links and the floating banners are in the front page. The main purpose is to show them to the user right away. The beauty and art design are not the main focus.

The designers in Yahoo China still look down upon the website hao123. It’s a crowded and ugly website. However, hao123 attracted much more traffic than Yahoo China with much less cost.

Reason 10: “Only recruit the people who have the similar background and from management point of view” v.s. “Recruit variety of people who have entrepreneur spirit”

The recruiting process of the international internet companies emphasized the similar ways of communication and the agreed upon untold rules. The preferred employees were people from Hong Kong and TaiWan or people who had oversea educational background. They were all similar. Outsiders cannot enter their circle. From management point of view, they were stable, consistent and easy to manage. No wonder those failure strategies passed without any arguments.

Their competing Chinese websites recruited decision makers, adventurers, entrepreneurs, as well as the hard workers. Although they varied a lot, they all had an aggressive nature and can build websites which beated American websites.

If the international internet websites don’t change their behaviors in those 10 areas, their business won’t take off in China.

I have to say there are a lot of good insights in this article. But I don’t agree with all the points made by the author, especially about achieving the goal by all means. Both the goal and the means matters. Without appropriate means, the golen goal turns into dust. The current success of the Chinese websites are not indicators for the success in the long run. Achieving the short-term goal may damage the opportunities for future growth. To become a lasting business as those international websites, those Chinese websites also have some lessons to learn from those giant competitors.