TaoMee Vs. Tencent: Battle in Kids Social Networking Market

Comparing to more than 10 years’ developing progress of Chinese online game market, kids social networking sites have only taken root for two years. Since Taomee was rumored to go public on Nasdaq in 2Q2011 and Tencent launched its first kids-oriented online community Roco Kingdom to join in the market, this segment gradually received more attention.

Taomee CEO: become children’s favorite entertainment company in China

Founded by Wang Haibing, former head of QQ Pets for Tencent in 2007, Taomee has become a leading social network for children in China. With Mole’s World, Seer, Haqi Town, Little Fairy and many other SNS games for children,Taomee now has 180 million registered users, of which 30 million-50 million are active. This means nearly every primary student who is able to get access to internet has a “Meemee” account number.

Taomee founder and CEO Wang Haibin said, rather than only being a kids networking company, he hopes Taomee can become China’s biggest kids’ entertainment company.

TaoMee has been profitable since Jan.2010, with its main revenue coming from selling virtual pets to users and charging fees RMB10/Month ($1.5) to its VIP clients.  Since 2009, the company also ventured into book publication, toys and clothing fields to promote its game franchise characters.

The revenues of offline business occupied about 10% of the total. Wang said he expected revenue from offline business to surpass 50% of all.

Taomee has built an independent department for its offline businesses, which also make cartoon and films based on the company’s two SNS games  – Mole’s World and Seer. The company will continue to strengthen the expansion of its offline business, and is planning to open up to 40 children’s garments stores by May 2012, according to Wang Haibing.

Tencent: Roco Kingdom achieved PCU of 400,000

Tencent, on the other hand, launched it’s first online social product, Roco Kingdom,in July 2010, with more than 50 million registered users already and peak concurrent users of 400,000.

Using funny magic as its theme, Roco Kingdom is focusing on safety, health, and education for kids. At the same time, Roco Kingdom has also formed partnerships with movie studios, magazine publishing and animation companies. Ren Yuxin, President of Tencent interactive Entertainment Business system states,”Roco Kingdom, if operated merely as a kids’ networking community product, is undoubtedly a waste of its product value. It should be a project with higher entertainment value, while focusing on entertaining, multi-channels and multi-fields.”

Who knows the kids best?

Tencent is dedicated to dig into this new market through partners in the entertainment industry. When talking about former employer’s move into kids’ market, Taomee’s Wang Haibing claims, “this proves exactly the potential of this market. Facing new competitors, Taomee need to focus on its most basic thing: who knows the kids best, who takes the market.” For further development, he believes providing more comprehensive and high quality entertainment services is essential.

Though Kids SNS’s room for growth looks promising, there are still plenty of difficulties need to face. For instance, targeting young kids as online customers is not easy because parents who foot the bill have to agree first. Also, new interesting theme, and a strong in-house development team with quick turnaround are two key factors that kids’ SNS companies could work on.