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Tech talk: Converting chatter into cash

By WANG XING (China Daily)
Updated: 2010-03-26 09:55
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Tech talk: Converting chatter into cash

A man surfs the Web at an Internet cafe in Fuyang, Anhui province. China's user generated content (UGC) has increased from 200 million bits of data in 2007 to 1.13 billion last year. [China Daily]

BEIJING - In China's dynamic, high-tech industry, Grace Zhou is one of the few female executives to head up a domestic Internet firm. Yet her level of ambition is by no means less than her male counterparts.

As chief executive of Daqi.com, a four-year-old start-up firm, Zhou's goal is to help to connect commercial firms with millions of their online users - some of them disgruntled customers.

The company collects consumer feedback and offers sellers a platform to monitor opinions from that group directly. That service, Zhou believes, would bring in billions of US dollars for Daqi over the next few years.

"What Google and Baidu have been focusing on in recently years is to make mostly static information searchable on the Internet. But what we are trying to do is collect and analyze information that is created and shared by Internet users themselves," Zhou said. "That is a brand new market."

Tech talk: Converting chatter into cash

With China's online population reaching nearly 400 million last year, bulletin board services (BBS), blogs, podcasts and social networking sites have become key platforms where users are expressing and sharing their opinions and ideas, according to the China Internet Network Information Center (CNNIC).

That kind of information - called user generated content (UGC) - immediately goes live once it is submitted, and is not moderated by official knowledge experts.

User generated content has increased from 200 million bits of data in 2007 to 1.13 billion bits of data last year, according to a survey by Daqi. Of them, about one third are product inquiries, user experiences and complaints, which are of great commercial value, the survey showed.

"In the Internet era, every online inquiry is a sales opportunity and every complaint is a reputation crisis. But most companies don't have much to do with these opportunities and crises due to lack of searchable information," Zhou said.

In December, Daqi launched an online platform that sifts through millions of Chinese bulletin board service (BBS), personal blogs and chat rooms. The users of the platform can then check, using certain keywords, about what online users are talking about their companies and products and even respond directly to specific user inquiries or complaints.

In the previous two quarters, Zhou said the service has attracted about 10 customers, including Royal Dutch Shell Plc, Hewlett-Packard, Microsoft, Haier Co Ltd and ASUSTeK Computer Incorporated (ASUS).

She expects the revenue of this new business to surpass 100 million yuan this year.

"Over the past few years most consumers are moving to the Internet, but companies are not," said Rowan Benecke, Asia Pacific regional director of TEXT100, a global public relations firm.

He said many of his clients are highly skilled in traditional ways of communicating but don't really know how to deal with consumers in the virtual world.

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That inability, according to Benecke, could potentially result in a public-relation's nightmare.

"Compared to the West, Internet word of mouth is more developed in China," said Sam Flemming, the co-founder and CEO of CIC, one of China's biggest research and consulting firm on consumers' online opinions. "There are more people online, more netizens talking online, more places to connect and netizens are, overall, more active."

But he said while China has a more developed Internet Word of Mouth (IWOM) ecosystem than the West, IWOM marketing is less developed here, as many companies don't understand it very well.

According to Zhou, one example of China's less developed online marketing market is the rampant posting of fake online topics that are posted by small firms or even individuals who pretend to be ordinary users but are actually hired by large companies.

These firms try to influence user's opinions online by posting fabricated comments in places such as online forums, chat rooms and even personal blogs.

"This kind of communication does not have any long term benefit for commercial firms and actually many online users nowadays are smart enough to identify these kind of fake comments," said Zhou.

She believes that proper online communications will create value for both consumers and commercial firms.

Besides the new online platform, Daqi also has a website that recommends the most popular topics on China's social networking sites.

Her 200-employee firm, which received funding from venture capital firms IDGVC Partners and WI Harper Group, is planning an overseas listing in the next few years.