Live from Digital Directions 2011 – Tony Chen @ GroupM Interaction #DD11

Tony Chen started by delivering a sobering assessment of the success (or failure, more aptly) of Western online companies in China. For instance, while yahoo! Started in China in 1999 it had less than 1 percent of market share in2010. ebay entered China in 2001 and acquired the number one competitor in 2006, but was sold to in 2006. MSN is a distant number 2, while is unprofitable and losing share and MySpace is going nowhere.

“Stop sending executives to China and hiring McKinsey and BCG people – listen to the local people,” Chen said. “Hear their voices and react to the market in a local way.”

He also talked about the sensitivities of the media industry and dealing with the government. YouTube was blocked in 2008, along with Facebook, and Twitter was blocked in 2009 along with foursquare.

He also talked about the phenomenal success of many of the Chinese companies, which he attributes to their stronger understanding of local characteristics. Twitter alternative Wei bo now has 70 million users, and 227,232 messages sent in the first one second of the Chinese New Year. It had reached 3071 tweets per second in only 10 months – it took Twitter four years to reach that figure. The top three celebrities have more than 5 million followers each. There were also 1000 group buying sites launched in China in 2010.