Once upon a time, the graveyard that is Renren was worth US $8 billion. The former “Chinese version of Facebook” imploded after building the country’s largest social media network.
The company’s value shrank approximately 97 percent in seven years. As of June 2018, Renren was worth US $168 million, a mere 3 percent of its peak value.
Today, Renren is seeking a path to recover its lost users and the attention of the public.
Chen Yizhou, CEO of the former social media giant, is under tremendous pressure to save his company from the brink of bankruptcy. However, his recent attempts to privatize and invest in blockchain technology have failed.
With his last bets in the secondhand car market and online broadcasting, Chen and his team appear to be running out of strategies to stabilize the ailing platform.
Renren’s Glory Days
Even as a Facebook imitator, Renren’s may be worth less than anyone could expect. Facebook has a stable net worth of about US $600 billion while Renren has stumbled further and further from its original social networking businesses.
Renren’s initial success made perfect sense. Like Facebook, the Chinese social networking site focused on maintaining connections to classmates and friends. This idea was revolutionary in China in 2005. Renren, which was then known as Xiaonei (On Campus), benefited from enthusiastic students who posted, shared and commented on their friends’ posts and pictures. As the largest Chinese social network of its era, Renren’s worth lagged only behind Tencent and Baidu.
Renren made it easier for people to maintain their friendships. The ability to comment freed them from the need to make calls or send occasional texts.
As the community developed, Renren became a place for acquaintances to share their life stories and thoughts, as well as a tool to connect strangers with similar interests, ideas and beliefs. With its focus on real-name accounts and profile pictures, Renren became a platform to acquire fans, business partners and other acquaintances.
However, the social networking market did not remain empty for long. Weibo and WeChat joined the competition, each offering unique features and a very different operative strategy. While Weibo and WeChat still stand after years of competition, Renren has become a forgotten product abandoned by its former users. Most former users are surprised to hear the company still exists.
Collapse of the Virtual Community
In an interview, Chen Yizhou blamed Renren’s decline on losing a fight with Weibo and WeChat. That seems doubtful. Despite Tencent’s longtime focus on developing a social platform, WeChat was a very different product that should not have been a direct threat to Renren’s open-web, real-name network.
Perhaps Chen did not want to address the real struggle that cost Renren 97 percent of its market value. Renren’s failure had its roots in the same issue faced by many Chinese Internet products: privacy.
While posting on Renren may be fun for university students, that social media history becomes a liability users are eager to shed as they move on in their lives. It may be comments about their ex-boyfriend or ex-girlfriend. It may be past events they do not want to face. It could be an argument they don’t want others to see.
It is easy to get rid of the content inside Renren. As long as users can find their original posts and click the ‘Delete’ button, the problem is solved. The more troubling issue came from search engines beyond Renren’s control. Even after the posts were deleted or hidden, they remained visible to search engines. It takes just one Baidu or Sogou search to unearth many Renren users’ pasts. And that can be something very challenging to escape.
Facebook seems to have a better strategy to solve the problem. Google searches only lead to a user’s profile page. The content that is visible there is strictly controlled by a user’s privacy settings.
Renren’s failure to protect privacy scared away many existing and future users from its platform. Furthermore, its emphasis on real name networking only amplified the problem. Renren users began to realize they were putting their pictures, posts and writings into an online open library of which they had no control. That content could one day have unpredictable consequences.
On the contrary, WeChat does much better with privacy. Not only is WeChat designed for acquaintances, the application also has strict controls over its Moments. Users can select which user group can see their contents and the amount of content people can see in their accounts.
Weibo similarly does not ask its users to use their real names. The obvious contrast in privacy put Renren at a huge disadvantage. Once WeChat and Weibo started to provide similar content to Renren, users had no incentive to remain.
There was no #DeleteRenren movement back in the day. Former Renren users reached a consensus without even communicating, and the site quickly became an online ghost town. Every feature is still there, but there is nothing new in anyone’s content feed.
Attempts to Diversify
Following the collapse of Renren’s social network empire, Chen Yizhou has been determined to find new areas for growth.
The company started to transform into an online live broadcasting platform. In addition to changes in its online businesses, Renren also invested in secondhand car dealerships. Together with a failed blockchain project, Chen has made three attempts to bring his company back from the dead.
However, live platforms and car dealerships are not easy to dominate. As both markets are rather mature and have many competitors, Renren’s future is not optimistic.
“It’s hard to change, and it is even harder when you are a public company,” Chen said during an interview. But Chen remains optimistic about the future. “Renren remains a good platform to curate and develop some innovative features. We still have some active users on site,” he said.
Chen definitely needs new opportunities to win back his lost 97 percent. Given Renren’s position in the market, there is little risk in experimenting.
When you’ve already lost so much, the opportunity cost of losing again is very, very low.