LinkedIn And China

The one major U.S. social network not blocked in China is starting to expand its presence in the world's most populous nation reports CNBC.

LinkedIn, unlike Facebook, Twitter and Google, is not banned by state censors, but only recently appointed its first president for China, George Shen. Shortly thereafter, LinkedIn started to integrate its accounts with users' profiles on the Chinese chat app WeChat, which has around 300 million monthly users.

Internet analysts and recruiters say that LinkedIn has a better chance of catching on in China than many other US tech groups.

Other groups, if they were unblocked, would need to compete directly with China's established tech giants. Tencent, whose HK$991.6 billion (US$127.7 billion) market cap is less than $5 billion behind Facebook's, runs WeChat, which is increasingly popular as a social network and marketing platform. Sina dominates blogging with its Twitter-like Weibo microblog, which is partially backed by ecommerce giant Alibaba. Baidu and Youku Tudou, meanwhile, lead in search and online video.

The online job hunting market, however, is fragmented between local groups such as Zhaopin and 51job, and a very high turnover rate among employees means high demand for recruiting services.

"The quality of companies that hire through Zhaopin or 51job varies greatly," said one young Chinese office worker now at a multinational group. "LinkedIn is more international and higher end."

Why China does not block LinkedIn along with other foreign social networks is unclear, but users of the site do not typically use it to debate politics or organize protests, areas that will draw the censors' attention.

Despite not offering a complete Chinese version of its desktop site, LinkedIn says it has more than 4 million users in China. Globally, it has 260 million members, 54 million of whom are in Asia. However, its membership growth rate in the US is starting to slow as LinkedIn has already covered much of its potential userbase.


"They need new markets to keep the whole thing going," said Michael Graham, an analyst at Canaccord Genuity.

China could be that market. With rising salaries and stiff competition among companies for trained staff, recruiters say it is not uncommon for employees to change jobs after just two to three years, faster than in the US or Europe. A recent survey by headhunter Aon Hewitt in China found that nearly 15 per cent of employees changed jobs last year. Turnover rate among workers in fast-growing sectors such as technology was even higher.

LinkedIn declined to elaborate on what its new China president Mr Shen, a former Google executive, plans to do for the site.

One potential way to grow would be to offer a desktop site in Chinese, as it already does in languages including Bahasa Indonesia and Turkish. Currently, its Chinese-language functionality is limited to its mobile app.

Yet recruiters and users cautioned that localizing the site too much could dilute one of its strengths - the fact its users are multilingual and generally highly skilled.


"The professionals who can compete on the international level all speak English, [and] that is also the area of highest demand," said Chun Liew, founder of Direct HR, a recruiting firm based in China.

Next week, LinkedIn is expected to report earnings of $2.22 a share for 2013, according to the average analyst estimate, a 38 per cent increase from 2012.

In the U.S. and Europe, LinkedIn profits by selling subscriptions to recruiters who want access to the millions of résumés that members have posted on the site. Revenues in its recruitment service division, which account for more than half of overall sales, were up 62 per cent year on year last quarter.