At first blush, it seems like Song Li is one of those stereotypical Chinese Web entrepreneurs. The kind who rips off successful US sites and hopes operating in the world’s largest consumer Internet market will magically create a successful company. After all, he made a good bit of money investing in ChinaHR—a job board site that sold to Monster.com for more than $200 million over two deals – and right now he operates Digu.com, a Twitter-clone, and Zhenai.com an online dating site that could be the Chinese Match.com.
But if you dig a little deeper into that dating site, you start to understand how differently Li thinks, and how that thinking reflects an aspect of Chinese consumer Web sites that Westerners frequently miss. Where Chinese Web entrepreneurs shine is in taking an existing business idea – ripping it off, if you like – but then completely rethinking and reinventing that idea’s business model and process. This not only makes the companies more profitable faster, it’s a big reason why home-grown Chinese versions continually beat US companies trying to expand into China.
To a Valley entrepreneur taking someone else’s idea, improving on it and taking all the credit may seem unfair or even unethical. But Google didn’t come up with the search engine and Facebook didn’t come up with a social network. What mattered was execution. Put another way: Sure the Chinese can learn a thing or two about original Web ideas from the Valley, but the Web 2.0 generation can learn a lot about monetization from China.
So what does a Chinese Match.com look like? In Li’s own words, it’s very “practical.” China has a long history of matchmaking so just going online, finding someone you like and messaging them isn’t going to appeal to a lot of the population. The ones who are comfortable with doing that will just use social networks. For those who aren’t, there are already an established off-line alternative in some 200,000 very local, fragmented companies that specialize in matchmaking, charging anywhere between 2,000 and 60,000 RMB per six months—depending on the service. Even in comparatively cheap China, they’ve got pretty high customer acquisition costs thanks to all that brick and mortar and heavy placement of classified ads to keep bringing in new singles.
That’s where the Web should come in, but it’s a bit trickier than that. Here’s the rub in China: The entire consumer Internet—along with “old world” industries like consumer packaged goods and entertainment—are all growing and developing at in parallel. In the US, you could argue social networks are the Web 2.0 answer to the Web 1.0 online dating sites. But how do you build a profitable online dating company in a world where a million MySpace and Facebook rip-offs already exist?
Li has struck an interesting middle ground: A Web site that’s free to join and free to search, with revenues provided by a 350-person strong call center of real-life matchmakers. Once you find someone on the site you like you place a call to a matchmaker to be set up on a date. Using the service costs 3,000 RMB (roughly $430 in dollars) for a six-month subscription—about the low-end of a traditional matchmaking service – and at least one person going on the date has to be a paid subscriber. The matchmaker determines whether both people want to go on the dates, or suggests an alternative date from amongst the site’s 22 million registered members (growing by 40,000 per day). The matchmaker then sets up the date, and then follows up afterwards.
The matchmaker isn’t your friend—she is doing a job. If you suggest someone out of your league, they might, ahem, guide your expectations. “We just want you to be realistic,” Li says. And in the event of a rejection, Li’s team asks a detailed questionnaire to determine exactly why one party didn’t want a second date. And then they call the other party to explain – in precise detail – where they went wrong. “At least you know why and there are certain things you can fix next time,” he says. It may sound brutal but it gives the service clear value. Zhenai.com is profitable, generating about $2 million in revenues per month, growing at double-digit rates month-over-month.
It may also sound like labor-powered, innovation-free China, but it’s not. Li has built a specific CRM system from scratch to walk matchmakers through the matching process and he’s hired a psychologist to help train them on what questions to ask, and what to say to the lovelorn. Li himself has a PHD in finance from Cornell, where he also studied evolutionary biology and molecular genetics.
And then there’s the statistics. Not even Max Levchin—the PayPal and Slide founder who has graphed everything down to his past girlfriends’ bra sizes over time— could match Li’s love for charts and stats. All those brutally honest conversations about why dates succeeded or failed have turned into a trove of statistical data that matchmakers turn into pre-date advice.
A random example? 60% of women with long, straight hair get second dates—even when the data is normalized for Chinese women being more likely to have long, straight hair. The worst group? Short curly hair, which has only a 5% second-date percentage. (Note to self: Good thing I’m married.) “We’re not telling them what to do, we’re just giving them information,” Li says matter-of-factly. Men also like black pantyhose and shiny color-less nail polish. (Li blushes a bit when he tells me about the pantyhose.)
Li has also found that men are universally attracted to women with a .7 hip-to-waist ratio—something he believes is genetically hard-coded as a reproductive trait. “I can’t do anything if a woman is fat, but I can tell her to dress so it shows off her waist,” he says dispassionately. It works both ways, by the way. Women prefer dates wear a suit and because women are predisposed to look for “good providers” Li says he can track for every extra 1,000 RMB you make a month, statistically what percentage more attractive you will be to an average woman. “It’s a math fact,” he says. “I can build you a model.”
It bears noting that Li is not some fratty chauvinist pig. He’s a brainy, bespectacled former derivatives trading executive on Wall Street and Hong Kong, and, yes, he is married. He just likes to break things down into numbers and trends in an obsessive attempt to quantify the seemingly qualitative behavioral patterns of it all. And that makes him the exact opposite of any US consumer site trying to blindly “localize” a site for the Chinese market by just changing the language.
What’s with the picture? Is that a picture of a Chinese girlie from behind? Or could it be an Indian?
“60% of women with long, straight hair get second dates—even when the data is normalized for Chinese women being more likely to have long, straight hair.”
very nice article. thanks
Agree 100%. One of the most well written and well thought articles in techcrunch
Lacy,
Great article.
Art of War applies. The Chinese are not known to be early game entries. They like to learn from US social sites and capitalize on their mistakes.
I live in Hong Kong + San Francisco. The innovative entrepreneurs are the Chinese who have been schooled in US, like Song Li (Cornell) and are practical minded, meaning monetize is the main focus.
With a valued (cheap) labor market, the perfect web business can use labor to fill in the weekness.
For instance, a job web site in China can make money by charging employers + offer a paid feature job seekers to have interview practice with a employee from the job firm.
Thanks for great article
Rayfil Wong
Campusfork.com
Wow. Sarah I’m impressed with your articles more and more each time. You are the writer I’m enjoying the most on Techcrunch as you are using your position on a premier Tech News site wisely, using position to constantly write articles that attempt to reset people’s mindsets(Especially Americans) to the realistic situation in International Business.
ps. Not to knock Michael’s writing but he’s the only one writing articles even nearly as hard hitting as you are at the moment(At least in my area of interests). Keep it up.
Wow wow wow! Now that’s an article!
Good article! However, the title is misleading, as the service you described is not a copy-cut, but a unique business, adapted for giving value to (and extracting money from) the local audience.
Apparently some don’t understand what the “quotes” mean.
What I wouldn’t give to be bilingual right now. Then again, from what I understand, there are enough different dialects in China that you could spend years getting fluent enough to speak to any citizen you ran into there, regardless of province. On top of which, as with many of the Asian languages, you need to learn to read a completely different set of characters which is another challenge. Still, it would be awesome. (Where’s that plug-in jack from the Matrix?)
Neo: I can speak Mandarin!
Morpheus: Show me.
Neo: I can do better. Check out my business plan for a new web service for the Chinese market.
You can get by with just standard Mandarin in pretty much all of China and Taiwan, even Hong Kong. In Hong Kong sometimes a little Chinglish helps.
Mandarin as a spoken language is actually very easy to learn. It has a consistent and small set of grammar rules, a set of phonetics standardized to the Beijing dialect pretty much nation-wide (the tones take a bit of getting used to, it’s kinda like singing), and an elegant Romanization system for writing in Latin alphabet, so you have some form of written communication during your transition.
The written language is a different story, although it’s a myth that you have to memorize several thousand character photographically. There are 200 or so radicals, as oppose to 26 letters, and they are arranged two-dimensionally as opposed to the one-dimensional Latin-based writing systems. Once you get the hang of it it’s actually just a different way to “spell” words, rather than drawing distinct pictures. Chinese often clarify ambiguous-sounding characters by “spelling out” the radicals.
If you learn 5 characters per day average, you can usually reach basic newspaper level in a bit over a year (~2000 characters). Of course, there’s also a lot of culture-learning to understand the context, and this part can vary a lot depending on your devotion, but it’s usually more fun.
Learning Chinese is not trivial, but it’s not as out-of-reach as westerners make it out to be. I found the best way is to just take it casually but with persistence. Most westerners I know never get the tones exactly right, but they can impress the locals usually after a year or two of immersion.
ps: I’m not sure if there are any good immersion-style self-study materials for Mandarin and English (like French in Action from PBS). If anyone has heard of any please let me know.
finally, a good article ! thanks
it looks like he know what people wanted, and applied directly towards the idea, the way an entrepreneur thinks
Love the great work, Sarah
Keep it up
He is maybe a good businessman, but it looks like his dating site strongly encourage people to be all uniform, and to be conform to pop standard. It will work well for dull people and will make the rest more like a conforming biorobots.
In a way it could be a good understanding of cultural tendencies in China’s culture.
Hopefully competitors will see the demand for an alternative approach.
The thing is, that’s exactly the way Chinese Confucian culture teaches people to behave. It explains the site’s popularity very well. Why else would the site offer the service of asking why you were rejected? If the Chinese were not so afraid of breaking “social harmony” (i.e. confrontation) they’d have the guts to ask the girl themselves.
Let’s not kid ourselves. Just about everyone in the world is trying to conform in one way or another.
Even the ‘rebellious’ people “conform” to a certain standard.
At least the Chinese realize they are conforming. Whereas others blindly think they are individuals while following the latest Hollywood trends.
Bravo, KC.
“”And that makes him the exact opposite of any US consumer site trying to blindly “localize” a site for the Chinese market by just changing the language.”"
Sarah: That “website” you’re talking about keeps on growing at an unprecedented pace … While you’re writing this article we keep on closing more deals with ivivuals who want to help the Spanish speakers but wouldn’t know how to do it without our help; so I am sorry to say you’re not getting the picture:
We’re covering a vertical other palyers didn’t know how to fill.
The newspapers thought they were going to be for ever… probably CL is making the same assumption and he’s paying it dearly… we’re just helping the 50MM people in our community. How could this project not succeed?
Thanks anyways for thinking about us but even if you decided not to give names we’ll still grow without your help.
Your evidence he’s not some fratty, chauvinist pig is that “He’s a brainy, bespectacled former derivatives trading executive on Wall Street and Hong Kong?” Have you ever met any derivatives trading executives on Wall Street and Hong Kong?
What’s the difference between Asia and the rest of the world ? See DIGU or GOOGLE.cn for example. Compare them to Twitter or Google.com
Yes, “our” normal sites look TERRIBLE compared to ALL web pages from Asia.
Eh, I’d say it’s half-and-half.
Sometimes I prefer our sites more. While other times I prefer Asian sites more.
I don’t get it — there’s absolutely nothing impressive about either Digu.com or Google.cn. :\
Digu’s got a nice layout, but nothing I haven’t seen before.
It’s amazing too, given that most large metropolitan areas in China still have huge, informal weekly gatherings in parks where parents play matchmaker with other singles’ parents. This service could even sound a lot more efficient even for the most technophobic, well-meaning parent.
I don’t know about you guys but .7 hip-to-waist ratio is not exactly what i am looking for. That means to me a girl with a gut right? Bigger waste than hips. Perhaps a typo in the article?
perhaps a typo when you say ‘waste’? lol
you’re right though, 0.7:1::waist:hip. Child bearing hips. Men are pre-programmed
LOL yeah that is quite a funny typo on my part. **Bigger waist then hips. is what i meant.
What’s wrong with liking chicks who are preggers?
And finally it happens, a ‘really’ great article on TechCrunch.
Really enjoyed reading it, Sarah. Wish we had more like this on TC.
Great guy! Innovative adaption
Nice post highlighting how clones can not be clones. There’s something to appreciate everywhere. Refreshing read. Thanks.
Clones learned all the mistakes and the beauty of the previous ones.
That’s a good article.
It’s not completely copycat… maybe half
These sites has no SEO elements implemented. If you google or baidu the terms 生活分享社区 (life-sharing community, a term straight from digu.com) and 最佳婚恋网站 (best dating site, a term straight from zhenai.com), neither sites show up on the top ten. Are they even popular in China?
“amongst the site’s 22 million registered members (growing by 40,000 per day)”
I’d say yes.
Out of 1.3 Billion inhabitants .. thats like 1,7% of the inhabitants.
for comparsion: linkedin has 30% of all inhabitants of the netherlands (where about 16,5 Million people live)
(couldn’t find current stats for match.com for the US)
What i am trying to say: 22 Millions isn’t that much in china
Think about Internet coverage in country like China first.
so I guess the question is… would copying the copy cat be successful in the US?
Just take a look at how many Asian movies Hollywood remakes. The Departed even won a bunch of Oscars.
So I don’t see why not!
but what i mean is… if this is a “copy cat” of match, but improved to fit China.. could this be “copied” to fit the US?
Yep. Good piece.
best post i’ve read on techcrunch in a long time… insightful, thoughtful and well researched on an interesting and important topic. that type of stat drivendating site could work in the states though, too, i think – perhaps an ex-bear or lehman quant jock could whip something up… : )
Thank you. I happen to be an ex-Bear Stearns (and ex-Morgan Stanley) derivatives dealer.
Song Li, Founder of Zhenai.com and Digu.com
I think the author herself is a copycat by calling this dating site a copycat. There are about 3-4 major dating sites in China for decades, and this one profiled is probably a new and better idea from those old ones. If you call Li’s “execution” as copycat, would you call OkCupid.com and PlentyOfFish.com copycat or ripoff of the older Match.com?
Is it me or do the Chinese have a habit of copying (read: stealing)?
If you let someone take it or copy it, is it really stealing?
When Charles Dickens visited the USA he was surprised to see his books on sale….. Because he had never received any royalties from sales in the USA. They were all pirated works.
http://www.rci....ickens_usa.html
“what mattered was execution”….nicely put, very nice article; refreshing, little taste of reality is good for some inspiration
As someone who’s working in China’s Internet sector right now, I also think that “What mattered was execution” is definitely the key takeaway from this article, and ironically enough, this is an universal rule, not China-specific. So the article name is a little bit misleading.
Excellent article. Perhaps American companies need to learn something from their Chinese counterparts. I sense some Web envy and a bit of arrogance in article like this. The Chinese have 330 million internet users growing at a rapid pace.
We will need to address the needs of our our marketplace more attentively before economies of scale and capital from well heeled Chinese companies begin to take slices of our market. With the way US companies think and behave, the chances of doing that in China gets slimmer every day.
The whole call center only works for asia. That would never fly over here. Americans are waaaay different.
I love the asian culture.. its awesome!
I like the post lucy but i feel that an american writing posts for what is an Chinese topic, very complicated in terms of economy, language and culture is just a hit and miss, or at best a hazardous endeavor.
I think Techcrunch needs to hire a chineese american, or a chinese guy to write or guest blog on this topic.I know they are a lot of xebobes around, but I for one think your china posts are very shaky and at best outdated
but I liked the post though, international stuff is nice
Excellent article, Sarah. Liked the fresh international context, even if it has – and why not – an American mindset. Hope you continue finding nice angles from all over the world, and making TC less US-centric.
Nice article and the art of war works for web businesses in Asia, it’s not copy cat.
And thats how Microsoft becomes rich
Great article. Thanks.
Insightful! A comparison with Indian matrimony sites would be even more helpful.
Walt Disney:
a) Copied the Brothers Grimm Fairy tales
b) Was inspired by them
c)Paid 0 royalties for original content
d) Sued everyone after him who tried to use the same material
At our site http://www.shanzai.com we focus on this very subject every day. The transition of the Chinese manufacturers and the developers from copycats to innovators is ongoing and progressing at a frightening pace.
Any international plans? It would work well in India. There are a bunch of matrimonial sites, but not much differentiation. And no one does this kind of analysis.
Great post.. Its actually a good idea to copy some of the innovative ideas from silicon valley then packaged it according to your country’s psychic…
I would say to comment on a website is one thing, to run it is another.
There are deeper reasons why many websites failed in their expansion to China.
Take the greatest website so far google.com as an example, the Chinese name of google.cn sounds so 1960s.
Sun Tzu’s art of war for the Asians.. for the US, it’s Hardees, Popeyes, McDonalds and Dominos.
I met Dr. Li last week in Kunshan for a couple of days.
Easily one of the most interesting entrepreneurs I met anywhere on the planet so far.
I think this article and the subsequent ebullient comments offer a pretty good example of how low blogging has dragged down reporting. The writer spends all of 12 paragraphs extrapolating what is at most an interesting anecdote into some sort of profound insight on the Chinese market. This profound insight being that people sometimes take business models and change it for different environments. If this is “great” reporting, then journalism really is dead.
Excellent and highly relevant article; thank you for your work.
(Melbourne, Aus)
This article is very objective altough M A likes to bash China.
Great to see Dr. Song Li getting the deserved credit for his excellence at navigating the tumultuous Chinese web and mobile markets for the past 10 years
I expect Digu to perform well and, I hope, innovate in many ways on what Twitter did!
I’m an insider from zhenai.com, what Li said was not true. Actually with 3000 RMB service fee, they could NOT provide quality services, the labor cost, sales cost is high. The only way to make profit is to NOT provide enough services. Li knows this, their CEO Chen Si also knows this, but they won’t tell media. You can search zhenai.com’s Chinese name on baidu, you will find tons of complains.
Nice article. Lucy, you’re making progress.