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The Chinese Alternative to Ads
China skipped the desktop Internet, credit cards etc ... and went straight to mobile apps. Which they monetise through subscription way more than ads like in the West. Chinese social media giants have perfected the art of monetisation, which a16z codified in a framework with 4 key elements:
- Mixture of paid and earned perks
- An intricate point-based levelling system
- Functional features & showing-off perks
- Partnerships with other companies
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Paid membership as engagement drivers
Current membership models in the U.S (X or Snapchat) use the basic formula:
🤝 pay dollars, get features in return
Chinese models expand this with gamification. Paid memberships get you an initial baseline membership, but additional benefits are only unlocked with increased usage. This created engagement for paid users, which also increases.
Ex: For $3.50/mo, Weibo VIP members can edit their posts, have fun stickers, access VIP emojis, etc (see chart below). Continued usage of Weibo unlocks more features such as pinning more than one post.
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Levelling Up
Chinese companies use a levelling or points system to give users a sense of progress. This nuanced type of membership system creates a win-win between user and platform: users have fun while they earn and accumulate points to unlock more features, and platforms have a way to encourage new user behaviour.
Levelling perks can also help push monthly subscribers to annual ones. For example: Weibo lets users jump to Level 3 by simply choosing an annual plan instead of a monthly one.
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A balance of flexing with functionality
The Chinese networks offer functional/utilitarian benefits along-side social flexing (i.e., social expressions that are visible to the rest of the community).
Ways the Chinese apps encourage flexing:
- app skins and custom icons
- add icons next to their username
- have their comments show up in various colors
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Partnerships with other companies
In China, many of the major social media companies do cross-partnerships with non-competitive companies to increase their customer base. It’s an online exchange that benefits both parties, and would be the equivalent of Twitter Blue offering its members a free Spotify membership as a perk.
The closest equivalents (in the Western world) are offline museum reciprocity programs, where membership in one museum grants you free access to a select list of other museums around the country.
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CURATED BY
Life-long learner. Passionate about leadership, entrepreneurship, philosophy, Buddhism & SF. Founder @deepstash.
CURATOR'S NOTE
Very interesting how the Chinese mobile landscape is so different than the Western ones. They have more advanced monetisation & and fancier engagement options
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