Professional social networking websites such as LinkedIn trying to tap into China’s vast business world are finding a formidable domestic foe – the ingrained system of personal connections known as guanxi.
Two leading sites, California-based LinkedIn and the French company Viadeo, are targeting networkers in the world’s most populous country, but acknowledge the challenges they face.
China has the world’s biggest online population at 564 million web users, but the history of Western internet giants looking to establish themselves in it is littered with failures and disappointed retreats.
Google relocated its servers to Hong Kong over censorship and hacking and now has only a small share of China’s search market, while Yahoo has had a troubled relationship with partner Alibaba.
Groupon’s entry was turbulent from the start, and it closed several offices and laid off hundreds of staff just months after launch.
Business network sites face a huge extra obstacle of their own: guanxi, China’s system of personal relationships reinforced by mutual favours which plays a vital role in conducting business and navigating a messy government bureaucracy.