Is Renren Inc (NYSE:RENN) Losing Its Market Share In China?

Posted by Chris Bell November 12, 2013 0 Comment 2248 views

Renren Inc (NYSE:RENN) has in the past year lost momentum as China’s lead social networking site. When it began as one of the pioneers of Chinese networking sites, dedicated to social networking, other internet giants with Chinese footprint, Sina Corp.(SINA) or Tencent (HKG:0700) were yet to establish themselves.

However, in the recent months, Sina Weibo has emerged the best performer in the segment. Renren user base are young students, largely belonging to the higher secondary schools as well as graduates and college students.

The reason for the growth of social networking sites in China is attributed by China- based analysts to the increased move to the mobile platform. Most users have successfully moved from the location-specific PC-user profile to free-roaming and unrestricted location mobile blogging and social networking platform. Additionally, the use of form-defying, smartphones and tablets too have contributed to the increased adoption and use of social media networks believe experts in sociology, studying the impact of the Network revolution on communities across the world.

Renren at one time was listed to grow to the status of Facebook Inc (NASDAQ:FB), specifically for China. However, this was not to be as some of the other start-up social networking sites too began to bite into Renren’s traditional user base.

Failure on Renren’s part to optimize its revenue earnings through advertising on its social network has further added to the company’s woes.

Renren is also blogged down by the slow pace at which it is moving to monetize advertisements for the mobile-only user base. Majority of the users are accessing Renren via their mobiles and the older generation of PC-based advertisements are not doing much for the Chinese social network. Additionally, Renren has not been making a concentrated bid on monetizing its adverts for the mobile segment as Facebook did in October last. In fact Facebook has already begun to monetize its Instagram advertisements as well, a channel that is increasingly seeing younger college-going user base over the professional age group that is using Facebook Inc (NASDAQ:FB) proper

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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