The end of the road for LinkedIn in China could be sighted back in March, when it stopped accepting new user registrations. Six months on, news of a change in China led many to assume the company would be pulling the plug after seven years in the market, which meant not only bad news for Microsoft but also a troubling sign for other non-Chinese tech platforms.
LinkedIn itself quickly denied this was the end of its ambitions in China, where its business is called Ling Ying. "Our new strategy for China is to put our focus on helping China-based professionals find jobs in China and Chinese companies find quality candidates," Mohak Shroff, the company's vice president of engineering, said in a blog post. "Later this year, we will launch InJobs, a new, standalone jobs application for China. InJobs will not include a social feed or the ability to share posts or articles."
Jian Lu, a 20-year tech industry veteran who is president of Linkedin China, also weighed in, saying that reports of the platform's demise in the market were exaggerated.
Despite these claims, social media was abuzz with this development, as observers said the near demise of LinkedIn, especially the end of its social-media and knowledge services, was a body blow for Chinese consumers and businesses alike. "This will make networking with Chinese brands as a westerner even harder, and vice versa, networking with global brands as a Chinese professional," creative agency Qumin's CEO Arnold Ma said on LinkedIn.
Others agreed with this view, pointing out that LinkedIn would create a vacuum in the market—to the benefit of Chinese plartforms. "Yes, LinkedIn will lose its third largest audience by the end of this year as they shut down China," Ashley Dudarenok, a China expert and founder of Alarice and Chozan, two digital marketing agencies, posted on LinkedIn. "I don’t see yet what other digital platform could act as a similar cross-border professional bridge."
Campaign Asia-Pacific reached out to industry experts and analysts to ask for their insights into how LinkedIn's partial withdrawal impacts the social-media marekt in China, who benefits, and how companies, including advertisers, will have to adjust.
How will LinkedIn’s exit from China affect the social-media landscape in the market?
Xiaofeng Wang, principal analyst at Forrester
Operating a multinational business isn’t easy. A big challenge is that such companies have to consider each individual markets’ own intricacies on a global scale. Companies have to make difficult business decisions when their familiar ways of operating conflict with local regulatory requirements. LinkedIn and Microsoft understand this challenge very well and are trying their best to reconcile both. The plan to launch a new app InJobs is a good example. Both the HQ and local team statements show that they haven’t given up on the Chinese market just yet. [Read more from Wang in her blog post here.]
Kendra Schaefer, partner, Trivium China
LinkedIn is not actually exiting the market—they're shifting their strategy by dropping the social element of their platform and re-launching as an HR-services and job-search platform. This will put them in (more) direct competition with leading Chinese job-market platforms such as Zhaopin and BOSS直聘, and they will have their work cut out for them to compete in this space. Luckily, they have some data that competing platforms may not have, particularly their connections data. This may also be a smart move for them in other ways, as it will allow them to localise their China platform in a way they were not able to do by simply tweaking their international product. LinkedIn has been frequently criticised by Chinese users for its reluctance to fully localise its interface and functionality to suit Chinese user preferences, and a separate platform will allow them to do that.
Chris Baker, founder, Totem Media
With LinkedIn’s social and content features being pulled from the market, it's the cross-border professional connections between professionals in China and the rest of the world which will really suffer. There isn’t any platform that currently has the ability to bridge communities in China and globally in the way that LinkedIn was doing.
On the job search front, there are more important job sites in the market, for the bulk of employers and candidates. It is also reported that LinkedIn will relaunch a job search-only platform in the coming months. So, on the job-search front, there isn’t likely to be much impact. International employers will likely continue using LinkedIn for job postings, with local job sites (eg. Zhaopin), and local versions of LinkedIn (eg. MaiMai) getting a bit of a bump in postings as this news signals to brands that they need to localise further.
Who benefits from LinkedIn's departure?
Schaefer: Frankly, I don't think LinkedIn's move to drop its social features will impact China's domestic social-media space much at all. They're dropping those features in part because they haven't been much of a success domestically. Most of my Chinese friends do not use LinkedIn for social purposes. Smart advertisers in China were already primarily focused on WeChat, Weibo, Xiaohongshu and other domestic platforms. I would be surprised to hear that LinkedIn advertising was the focal piece of anyone's China marketing strategy.
Baker: I can see a few areas where local players, in China, will be able to pick up some slack user interest in the wake of LinkedIn’s departure. Local job sites and the local versions of LinkedIn will swing some attention to them. Platforms like Zhihu and Guokr should get a boost as preferred discussion (Q&A) networks. And some of the newer professional-development apps like Zaihang could pick up momentum as places for mentorship.
The biggest potential winner though, is WeChat. From a marketing point of view, brands who previously managed profiles and community on LinkedIn will shift over to WeChat as a way of reaching local professionals. On news of LinkedIn’s withdrawal, Totem immediately started looking at plans to shift client LinkedIn programs more fully over to WeChat. While WeChat was always part of the plan, it will get even more attention now.
The longstanding integration between LinkedIn and WeChat (with linked profiles between the two platforms) also gives WeChat a headstart toward any new features it might launch in the absence of LinkedIn. With limited effect, WeChat could stitch together some of the cross-border community lost with LinkedIn pulling its social functions.
Wang: The current social-media landscape in China consists mainly of local players and general social-networking platforms. There are a few job hunting/career development/networking platforms such as Maimai, but the user groups and platform positionings are quite different. In some ways, they may compete with LinkedIn today and InJobs tomorrow, but are not strictly direct competitors per se, and wouldn’t benefit dramatically from the change.
Where else can advertisers re-focus their spending given this change? Are options getting narrower?
Baker: In work we’ve done with global B2B firms, we regularly use ads on Linkedin, but the bulk of the effort goes into managing company profiles and creating professional content (organic communications). Again, WeChat should get a bump from corporate advertisers who shift more fully toward them.
I can also see some of the local professional sites (like MaiMai) using the opportunity to get included on media plans—especially in the early months following this news—hoping to leverage the shift in attention to a ‘local’ player.
Wang: I think if the LinkedIn China team is able to migrate the majority of their current users to the newly launched InJobs, it will possibly maintain the majority of its advertisers too. In the early days, LinkedIn (globally) started as a platform without many interactive features and user-generated content either. There were still users and advertisers. But without the social features, engagement and activities would be impacted and the commercial models may be slightly different.
As far as I know, advertising (and marketing solutions) only accounts for a third of LinkedIn’s revenue in China today. As long as key users stay (despite a different platform), advertisers are more likely to stay. So, the key question is how the LinkedIn local team can manage a seamless transition/migration to the new platform, minimize disruption, and maintain its current users, employees and patrons as much as possible.