Rumors of Weibo’s death have, apparently, not been exaggerated.
Weibo—an Alibaba property—was once the golden goose of China’s booming social media scene. It eclipsed Facebook and Twitter, and looked like it would eventually rule the world. Brands and celebrities—both foreign and domestic—rushed to open Weibo accounts. The platform looked unstoppable. Then, a year ago, China’s leaders began a censorship campaign that would lead to the behemoth’s swift decline.
Following a 2013 crackdown on “rumormongering” that heavily focused on Weibo bloggers and especially “Big V” verified accounts, the social site lost close to 28 million users. That coincided with a 9 percent decline in growth for Weibo in 2013. Both the number of users and their engagement levels have continued to drop rapidly, particularly in light of the heavy censorship on Weibo over the recent protests in Hong Kong, which has done little to improve the platform’s image.[more]
“Brands have seen diminishing returns on Weibo for quite some time, but in many cases maintain their Weibo pages simply because there are few viable alternatives in the market,” said Avery Booker, partner at China Luxury Advisors, in an email interview. Booker says that, except for a handful of exceptions, “ROI really isn’t there and hasn’t been for a long time.”
Meanwhile, with over 400 million users, WeChat is hoping to steal Weibo’s previously good press and, by being a more admired platform, also become more attractive to brands.
Booker calls WeChat “arguably the most important social platform for brands in China, particularly for CRM purposes.” This despite the fact that Booker thinks “WeChat’s popularity with Western brands is despite itself” because WeChat parent Tencent has done little to make it an easy platform for international brands.
In addition to WeChat, brands should keep eyes on China’s Vine-like video platforms such as Weishi and Miaopai. According to Booker, these services “are becoming increasingly popular with consumers and important for brands, and complement WeChat and Weibo rather than compete with them.” He points to how Burberry partnered with Weishi to promote its Shanghai store opening, and also notes how brands have optioned other sites like the streaming-video hub Youku, which Zegna has leveraged.
Weibo turned its first ever profit earlier this year just as it was hemorrhaging users and influence. It went public on NASDAQ just months later at $24 a share, and today is struggling to stay about $20. The company’s next earnings report is due Nov 13. The report will likely reveal just how much the platform has been hit in the last year—and may spell out the ultimate fate of the social service’s future.
[Images via Weibo, The Wall Street Journal]