Probably only a very few people expected the amazing growth of Kaixin001 at the beginning of 2009. Now 2010 is here, can you predict any startup will rock the China web?
An angle investor I know was in touch with a new SNS which I thought has some innovative ideas implemented. But he finally said No to the founder a day before the contract day because a famous veteran told him investing social networks is wasting the money. Well, yes and no. Most likely, we would see more expansion of existing social networks or rising of mobile SNSs, and would not see another lucky one like Kaixin001 simply because too many Big public social networks are out there.
Although, all of them will tell you the same story of user heterogeneity and different company strategies. Since they are all open to everyone, in some sense they are competing with each others. P1.cn which is also a social network you may never read on popular media, seems an exception. It neither rushed into the Open Platform ‘hype’, nor tried anything on the hottest Social Games yet. It is unique in this market, a private (i.e. invitation-only) social network mainly focus on young affluent people living in China.
The Interesting Story About P1
P1 was founded in Jan 2007 and first launched at end of the same year. Where did the first bunch of users come from? Wang Yu, the co-founder of P1 told me a very interesting story. Unlike many SNSs which acquired the first wave of users via spamming emails, virus marketing or social gaming, P1’s early users actually came from the real life. Wang said, we had some photographers who were asked to spent time on night club, shopping mall etc. They took photos for those fashionable young guys, then invited them to P1 in person and asked for the permission if they could use the photos on P1 to attract more users. It’s the strategy P1 has been using till now, simple but really works. “It helps us on the Identity verification and it can also guarantee the high quality of our user base.” Wang told me.
What Is The Highest Quality User
In China, there are probably 20 million affluent people, i.e. P1’s target users according to some research. “It’s still a niche market if we consider the user base the leading social networks already have. QQ is huge with over 200million active users; 51 says it has over 100million users; Renren and Kaixin001 surely have over 20millions users already.” Wang said. “but we are looking at the quality not the quantity, and we are not competing with any of them.”
So what’s the user quality in Wang’s opinion. Wang shared some interesting stats with me. By research, Kaixin001’s users are mainly white collar, the average monthly income is over 3000RMB; Renren and 51 users are in the middle with the income around 2000RMB; QQ’s users are youngest with the average income less than 2000RMB and a not-small portion of them has around 500RMB monthly. “But the average income for P1’s users, is monthly 8000RMB.” Wang smiled. “We have less users but much more attractive to luxury and fashion brands.” I could not approve if those figures are exactly right, but Wang’s analysis does makes sense.
Then I asked Wang, what if Kaixin001 one day decided to target at the same users as P1 does? Wang said although it’s possible but it would be very hard. P1’s users are using Kaixin001, QQ too, but they would not addict to them simply because they would rather spend more time on shopping, partying and communicating with the guys who have the same lifestyle in real life. A social network like P1 has to be operated in different way.
The Opportunity for P1
When almost everyone is still looking at the general social networks, P1 has quietly become the leading private network with around 600,000 users mainly from Beijing, Shanghai, Shenzhen and Guangzhou. And Wang is expecting P1 can expand to some key tier-2 cities such as Chengdu, Wuhan etc soon.
Since P1 focus on the niche market where the users are interested in fashion, luxury and partying and more importantly they are affluent at the age between 20 to 40. P1, without question, is now getting more attraction from some famous brands including Bentley, TAG Heuer. These brands believe P1 can bring some unique value which other SNSs can not. Those products fit for P1 users’ lifestyle and the users are more likely able and happy to pay the bill too.
You would not think it’s a good idea for LV to launch an online marketing campaign on QQ, right? But it sounds a quite good idea if it does it on P1.
Re-think Six Degree of Separation
On ASmallWorld, the leading private social network’s about page, it reads:
ASMALLWORLD is the world’s leading private online community that captures an existing international network of people who are connected by three degrees of separation. Members share similar backgrounds, interests and perspectives. ASMALLWORLD’s unique platform offers powerful tools and user generated content to help members manage their private, social and business lives.
Why it has to be six degree? Is three degree of separation good enough for a durable business model? I guess P1 along with other private networks are trying to give a positive answer.
Since P1 says it is not the competitor of those popular SNSs, I asked Wang for his opinion what is his favorite among Kaixin001, Renren and 51. Wang said he would go for Kaixin001.
Kaixin001’s white collar users take 10%-15% of urban population in fact account for ~60% of total spending of the country.