There’s a lazy stereotype that all Chinese social networks follow the Copy2China (C2C) model. Douban, however, was and still is surprisingly original since launch in 2005. It’s a deep social network that has attracted some of the top Chinese intellectuals, geeks, and urban hipsters to organize and exchange thoughts on social issues in forum-like groups, which have more than once landed Douban in controversy and been a target of Chinese government censorship programs.

Douban was created six years ago in a Beijing Starbucks by Bo Yang (aka username Ahbei), a legendary figure in the Chinese tech community. Initially, it was a site that resembled Windows Live Spaces, offering users a place to record their travel diaries. Eventually, the site found its niche, providing users with a platform to create their own content and communities while later expanding to become a conglomerate of portals and social networks.

We do discuss a lot of Chinese clones or ‘mini-innovators’. Here, we’re happy to highlight Douban as a true example of homegrown innovation.

Slow and steady: Douban's growth doesn't compare to Kaixin001's meteoric rise. But it's a solid alternative social network.

The Douban Structure

Douban is unique, defying the definitions of a standard social network. It’s driven by a core of dedicated users and the rebelliousness counterculture they have created. On the product level, Douban is divided into two main parts: communities and functional tools.

Strong communities ensure lively user-generated content (UGC) and conversations. There are two basic types of communities: media product review communities and social groups. One of the strongest assets of Douban is its user reviews of books, movies, and music.

Within the Books community, each review is tied to its corresponding page on Amazon, enabling readers to easily buy the book. This is one of Douban’s main revenue sources, earning them a share of the sales on Amazon that come via Douban. Recently, Douban launched an Android app for users to create and organize their books purchase list.

Music is a special platform on Douban. Like MySpace or Sound Cloud, it offers a public venue for young artists to post and promote their material. Many have even achieved fame through Douban. Though Douban’s claims of its music service having a 90% presence of upcoming young artists in China might seem inflated, there are over 7,000 musicians as well as over 5 million registered users.

It also works in Douban’s favor that the popular website imdb.com is blocked in China, prompting movie addicts to turn to other sources for review and gossip. Douban Movies is currently one of the two of the most popular movie review sites in China (the other being mtime). Whereas mtime is primarily based on movie reviews, Douban Movies has a valued added service of ticket booking that not only allows users to choose their theater, but also their seats.

In their design, Groups have resembled simplified versions of Pages on Facebook or Renren, with a front page to promote events and post content. They are created to focus on specific themes, interests, or social causes. Some of the most famous groups include Anti-Parents, which was created to boycott traditional parental teachings.

The functional tools in Douban include City, Douban.fm, Reader, and Alpha City, a virtual online city.

‘City’ is a locational service that allow users to track events and group buying deals near them. The most interesting feature in Douban’s group-buying is that users can use the service’s virtual currency, the Douban Bean, to trade digital coupons. Though the currency itself cannot be bought with real money, it can be gifted from users or gained via Douban-hosted events.

In addition to Douban Music, Douban’s offers a music streaming service, Douban.fm. Douban.fm is an intelligent cloud music player that uses an algorithm that learns each user’s unique music taste affects their streaming play based on user favoriting and skipping. Douban.fm currently has 3 million users active monthly, including 160,000 via mobile devices.

Douban Reader is a social RSS service that also offers bloggers a portal to post their latest article updates.

Alpha City is a curious case. As the name suggests, it is set up as a virtual city with sectors and streets, with each street having a limited number of stores for users to populate. As it is still in beta so the social and revenue model is not clear yet, but it will be a key component of the social site’s next stage and an important source of future revenue.

Douban’s Counterculture Culture

Douban is the most user-centric social networking service in China. Ahbei, the founder and CEO of Douban, openly tests commercial display ads, and has met the consent of thousands of users at each step of Douban’s development. Unlike other social sites such as Renren, which commercialized as soon the site reached critical mass, Douban has held off its plans to monetize (if Ahbei ever had any). The site only began its social ads services in 2010, 5 years after its launch.

Douban itself is fully open to both registered and non-registered users. Without signing up, anyone can enjoy 80% of Douban’s services, including reading reviews and listening to Douban.fm. In data provided, Douban claims to have 46 million anonymous/non-registered users.

At one point Douban tested a cooperation with internet giant Tencent. Tencent opened the floodgates of traffic upon Douban, but Douban didn’t like what it saw. Though vast in quantity, the quality of new users was low. They’d post juvenile comments “haha,” actually deteriorating core user experience on the site. The cooperation was ended.

And there is still a much higher entry threshold to join a group (like Anti-Parents), which requires users to be deeply involved in addition to being registered. There are also private groups that have a verification process before they are approved to join.

Douban’s Shortcomings

But Douban does face pressure to monetize, as it has raised considerable VC funding by now. In 2006, Douban raised 2 million USD in Series A funding from CEYUAN Ventures. In 2009, it raised a Series B round approaching 10 million USD, from EZ Capital and CEYUAN Ventures again.

Even though Douban is original and has the highest stickiness of all social networks in China, the site’s lack of profitability may limit its ability to maintain long term growth and expansion.

  • Limited revenue sources – Douban’s current revenue sources are disappointingly thin. The profit sharing model with Amazon is more limited than it sounds as most Chinese users turn to sites like Dangdang, whose loud mouth CEO and isn’t afraid to do what it takes to attract more users, including fierce price wars.
  • Restrictions over social ads may backfire – Due to Ahbei’s resistance to displaying social ads in Douban, users need to either actively search for or stumble upon them. We can imagine marketers will react by limiting budget allocation to promotions in Douban. Considering how advertising drives the income for most internet sites, Douban will have to reconsider its strategy and consult with users in order to reach a beneficial balance.
  • Slow user growth – Compared to other social sites, Douban’s growth is rather slow. Some of this is likely connected to Douban’s choice not to import celebrities like most social sites, which drives popularity and has commercial implications. Douban’s high involvement requirement has also turned off less hardcore users; 2 hours on Douban simply won’t give you more than a slight idea of what going on, and 12 hours will only get you started. In other words, a significant investment is required before the site begins to pay off. While one argument points out that Douban’s strategy only targets the most elite users in China, the other side raises doubts about its competitiveness against other larger social networks that have garnered millions more users in much shorter time frames. 
Source: Douban.com

 

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