WEIBO TALK: Alibaba, Tencent Draw Praise, Ire From Controversies

Rivals blast Alibaba over piracy report

Two big news stories were at the center of heated discussion in of the microblogging realm this past week, led by Alibaba’s (NYSE: BABA) high profile dispute with one of China’s main business regulators over accusations of being soft on piracy. At the same time, Tencent’s (HKEx: 700) roll-out of advertisements on its WeChat mobile messsaging platform also drew lots of comments, as users were suddenly greeted with unsolicited messages in the popular Moments feature that functions much like Facebook’s (Nasdaq: FB) newsfeeds.

Of course no weekly microblogging round-up would be complete without a mention of the media savvy Xiaomi, which was once again creating buzz after an embarrassing gaffe by global marketing chief Hugo Barra. That gaffe saw Barra use a politically incorrect version of a map of India in one of his presentations, showing India as the correct owner of parts of a disputed area of its long border with China.

The Alibaba saga was making global headlines for most of last week, so it seems like a good place to start our round-up of microblog chatter among major Chinese tech executives. The dispute centered on a report from China’s State Administration For Industry and Commerce, which was highly critical of Alibaba after an audit revealed that nearly two-thirds of merchandise sold in its popular Taobao marketplace was fake.

Not surprisingly, Alibaba’s major e-commerce competitors had a field day hurling criticism at their rival, accusing it of winning its market-dominating position through this unspoken alliance with the pirates. But Alibaba found at least one friend from an executive at telecoms giant ZTE (HKEx: 763; Shenzhen: 000063), who praised the company’s unusually defiant reaction to the SAIC report.

The Alibaba detractors included Xu Xinquan, a senior vice president at (Nasdsaq: JD), Alibaba’s biggest rival, and Li Bin, a vice president at Suning (Shenzhenn: 002024), which also operates a major e-commerce business. Li criticized Alibaba for lacking morals and its rogue business ways (microblog post), while Xu was accused Alibaba of unfair competition. (microblog post) It’s worth noting that the SAIC audit gave a much better score to JD than it did to Alibaba.

Other detractors included Duan Dong, a vice president at online classified ad site (NYSE: WUBA), who pointed out this kind of behavior was inappropriate for a company of Alibaba’s stature as one of the world’s most valuable Internet companies. (microblog post) But the company did find at least one friend in ZTE celllphone executive Luo Hongping, who praised Alibaba for standing up to the the SAIC rather than just quietly accepting the agency’s criticism like many other companies might normally do. (microblog post)

Meantime, Tencent’s decision to put ads in its Moments feeds on WeChat was less controversial, but also raised a wide array of comments. Many people actually seemed to welcome the ads as a kind of novelty. But some were also critical, saying the advertising system needs improvement to make sure people received approapriate messages from the likes of BMW and Coca Cola (NYSE: KO), which were among the first major advertisers on the system.

Zhang Dong, a former technology executive at leading search engine Baidu (Nasdaq: BIDU), pointed out that the ads themselves were quite well designed, and that many people actually complained that they didn’t receive any ads after hearing about the new feature. (microblog post) But Shenzhen-based tech executive Gong Wenxiang represented some users who were frustrated at receiving ads unsuited to their interests. He complained of receiving an ad for Coke even though he doesn’t drink the beverage, while he didn’t receive any BMW ads, even though he drives a BMW. (microblog post)

I’m personally not a fan of advertising in most forms, so the fact that Tencent could create this kind of discussion at all over such a move seems like a positive step. Of course consumers could quickly tire of ads after the novelty effect wears off, potentially resulting in some backlash and lower usage of WeChat.

Finally let’s look at Xiaomi’s India gaffe, that came from Hugo Barra, a non-Chinese and former Google (Nasdaq: GOOG) executive who joined the company to lead its international expansion in 2013. Barra’s gaffe came from a presentation he gave on India, which has quickly risen to become Xiaomi’s second biggest market. But Barra clearly needs a quick lesson on the many territorial disputes that China has with its neighbors, including India.

Barra’s choice of maps for the presentation was quickly noted by some, as it presented India’s version of how its border with China should look rather than vice versa. Wang Gaofei, a vice president at leading web portal Sina (Nasdaq: SINA), was quick to scold Barra, saying he should have used a Chinese version of the map since Xiaomi is a Chinese company. (microblog post)

Barra himself was also quick to accept blame for his “mistake”, saying he had hurriedly used a generic shutterstock map for his presentation, not realizing the implications of the border dispute. (microblog post) He gave a quick apology on his microblog, and promised he would be more careful next time.

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