Why facebook does not get success in China

Facebook said last week it was contemplating re-entering China, the world's second biggest economy, after being blocked nearly three years ago.

Few foreign internet companies have succeeded in China. EBay Inc, Google Inc, Amazon.com Inc, Yahoo Inc and most recently Groupon Inc form the list of notable online players who have failed to gain traction in the fast-growing nation of 1.3 billion people. It's actually a bit late for Facebook," said Hong Kong-based CLSA analyst Elinor Leung, who added that the market was already quite saturated with local players such as Sina Corp, Renren Inc, Kaixinwang001 and Tencent Holdings.

Facebook first launched its Chinese interface in 2008 but was blocked by Beijing in mid-2009 following deadly riots in the western province of Xinjiang that authorities say were abetted by the social networking site.

Almost half of China's 500 million internet users use social networking sites, government data showed in January. The dominant players among China's social networking sites (SNS) are Renren and Sina Corp, which is attempting to turn its highly popular microblogging service, Weibo, into a full-fledged social network.

China's SNS space is more crowded and competitive than the U.S. with multiple large and established players all investing for long-term growth," said Joe Chen, chief executive of Renren, which would become a direct competitor with Facebook should the US giant enter the market.
Facebook will enter a much more competitive market with a significantly different culture, business environment and other characteristics than what it has previously experienced in the global market," Chen added. Analysts agreed.