Two months earlier, facebook acquired popular photo app Instagram for $ 1 billion. Worth it? Mark himself said that it is an important milestone for Facebook because it’s the first time they’ve ever acquired a product and company with so many users – especially when they’re all mobile users. To make up its underdevelopment in mobile internet, facebook’s new deal is more like buying a potential competitor and paving the way for a mobile strategy.

On the other hand, are you also expecting a Chinese Instagram and want to see it grow into a legend? Will Instagram’s story work in China?

 

Different SNS Environments

First, let’s take a look at the grander picture. The most popular ones are Meituxiuxiu.cn, PhotoWonder (from baidu), Camera360, Poco, and Lemeleme. Unlike Instagram’s success, these apps are obviously overshadowed. For example, according to its CEO, Wu Xinhong, Meitu owns 100 million users on PC front and 40 million mobile users, but still its value is far trailing Instagram’s. Instagram has more than 40 million users in total. Wu explained that Instagram’s success is not only for the nice features of photo processing and sharing, but also for facing no competitors in the market.

Moreover, as Du Lin from PhotoWonder pointed out, China and the US have different SNS infrastructure. People in the States are more likely to share with strangers while in China this is hardly common yet.

Du’s advice is that the local photo apps should focus on its own positioning, not to go with the stream. She believed that having a large user base does not necessarily mean a well-established community – for instance Meitu should just be a photo processing tool. Even if in the future they are really determined to build a Instagram-like photo sharing community, it’s only because they feel the users’ prompt.

Founder of Lemeleme, Cui Gang shared his experience, “Do not always copy what others are doing, because by doing so you are not creating any value.”

 

VC Turning Their Back

Cui also said that outside China, like in the US, Venture capitals and entrepreneurs know clearly there’s more than just one decent exit strategy including being acquired or merging with bigger peers. Well in China, IPO is still the major exit option for founders.

Zhu Xiaohu, partner of GSRVentures is also not optimistic about the sector. He thought VCs are looking for a company that has the potential of creating 10 billion dollars, but photo apps do not really show this potential. He also commented on Meitu stating “it has large number of users, and earns a lot, but I don’t see more business values.”

Despite the pessimistic attitude, we cannot deny now it’s the era of mobile pictures. In 2011, Li Yanhong, CEO of baidu predicted that products focusing on sharing mobile pictures would grow rapidly. He is right and he actually put his words into action. Baidu’s PhotoWonder made some bold moves lately, like upgraded 15G of free online storage and new releases for both PC and mobiles.

PhotoWonder is one of the few lucky ones with support from Baidu, but how will the other players fare in the market remains to be seen.

photo credit: BigStockPhoto