When going public, Renren touted its business model as:
Renren Chief Executive Joseph Chen thought these businesses were interrelated and mutually promotive. “All of them are based on Renren. Nuomi has been growing its business well, and about 60% of its users come from Renren. Actually, all users on our open gaming platform are from Renren.” He said. Renren has a tremendous user base that use it on a daily basis. Since IPO, RenRen has been using existing users on its own platform to grow their user base on new services. Chewen has thus been growing rapidly.
Chewen’s general manager Yu Xiu said, “We wanted to provide more professional automotive service for Renren’s users for a long time.” He sees Chewen as an vertical effort and hopes it has more interaction with Renren’s main platform.
It seems quite some number of “Chinese version of Quora” are emerging these days. Zhihu (means “do you know?” in Chinese), which describes itself as “a real Web Q&A community”, is currently in private beta. So are Shanda’s Mifan (means “rice” in Chinese) and Baidu’s Xinzhi. Baidu has already had Zhidao, a Q&A service for everyone, but real-name social Q&A websites has become the new trend since earlier this year. As the most popular “real name” social network in China, Renren won’t miss the chance.
Revenue Diversification Effort
An industry observer commented, “If Chewen is just an independent Q&A site, it might not have much potential. But the fact that Chewen is a part of Renren will help it a lot. The Q&A service could serve as a marketing platform as well as a powerful traffic router. Car makers are too important advertisers to be ignored in China, and Chewen looks like a suitable place for them.
Renren was once dubbed as the “Facebook of China”, but there is a major difference between them: Renren does not make most of its revenue from advertising the way Facebook does. Renren’s 2010 revenue totaled US$ 76.5 million, but only 42% of which came from ads, while 45% came from online games. No wonder Renren is criticized for its over-dependence on games.
So, Chewen might be a revenue diversification effort as well as a vertical Q&A site. We can wait and see if it really works.