Yahoo China to Close SNS Guanxi; More Disruption at Koubei

The following is my recent post on Digital East Asia.

A week after Yahoo (NASDAQ: YHOOsold 57.48 million shares of Limited (HKG: 1688), and a month after Alibaba moved Yahoo China’s local classified listing site to under China’s largest e-commerce site, today Alibaba announced that Yahoo’s Chinese SNS Guanxi will be shut down. The notice on the site states that “due to changes in operational strategy, Guanxi’s services will cease operations on Oct. 30th.” (link in Chinese, my translation.)

Guanxi has barely been in operation for 1 year, having launched in October last year. Earlier this year there were reports of the service being migrated into Alibaba alongside, but apparently Alibaba has decided to adopt a drastic restructuring of its Yahoo China properties. And as a side note on the restructuring, Zdnet China reports today that (link in Chinese) 100 Koubei employees are rumored to be leaving the company as they refuse to be relocated to Alibaba’s Hangzhou headquarters from Beijing.

Going back to Guanxi, the service didn’t seem to have gained much traction within its one year of existence. Being constantly rebranded (first as Yahoo Guanxi, then put under the Koubei umbrella, and more recently Koubei getting integrated into Taobao) probably didn’t help. On the other hand, it would have been interesting to see how Taobao could have leveraged its massive user base to develop Guanxi. Perhaps Taobao has other plans – Guanxi is probably not the right vehicle for Taobao’s own foray into SNS, but clearly Taobao has massive potential. With its user base and the traditional focus it has put on facilitating user interaction (launching its own IM, which currently has 173MM downloads, for instance), it’s not hard to imagine Taobao attempting some SNS play to support its e-commerce community.

Update: I just realized that Taobao has had an integrated SNS since the end of March this year. The account is linked with the Taobao and Alipay accounts. So all the more reason to close Guanxi.


2 thoughts on “Yahoo China to Close SNS Guanxi; More Disruption at Koubei”

  1. Taobao is the biggest c2c e-commerce platform in China. They have a very big user-base, and they have their own IM platform which has 173MM downloads already. Taobao also has a pretty lively discussion forum. I think a SNS play could draw these users to be more active and ultimately make more purchases on Taobao (which is the end goal). I guess one possible idea is to build the SNS on top of the discussion forum – user profiles show what products users are interested in etc. I’m pretty sure there are some star buyers (people who buy a lot and/or are experts on the subject), who would be eager to maintain a high-profile personal page.
    Obviously this is not a fully fleshed out idea, and I don’t know enough about Taobao (I have never made a purchase). But perhaps it’s an indication of potential.

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