Sina's Growth Strategies in China


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Case Details:

Case Code : BSTR183
Case Length : 12 Pages
Period : 2001-2005
Organization : Sina Corporation
Pub Date : 2005
Teaching Note :Not Available
Countries : China
Themes: Business Models | Growth Factors and Challenges
Industry : Media, Entertainment, and Gaming

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

In its efforts to overcome this problem, the company focused on fee-based services and made use of another opportunity that arose in the growing Chinese economy -the popularity of mobile phones. Sina began offering MVAS to its users through Short Messaging Service (SMS). MVAS allowed Sina to reduce its dependence on online advertising and by 2003, it accounted for 56% of its total revenues.

Riding on the success of its SMS-based services, Sina made a profit for the first time in 2003. Commenting on the role played by MVAS, Nathan Midler, an analyst with IDC said, "Text messaging has really provided the necessary lift for these guys (Sina) to get to profitability."2

Background Note

Sina's success in the MVAS business could be attributed to the efforts of Zhidong Wang (Wang). Wang was born in Southern China and got his degree in Electrical Engineering from Beijing University in 1988.

During that time, university students were guaranteed jobs when they passed out. However, student preferences were not taken into consideration by the government when jobs were assigned to them. Wang was assigned a job in a factory located in Beijing's outskirts. The Beijing University was situated in Zhongguancun, a region known for hundreds of technology start-ups. Wang applied for leave from the factory and joined a start-up firm in Zhongguancun. He got involved in all the aspects of the computer business and slowly developed a liking for programming. Wang decided to focus on software development and joined the Founder Group3 where he developed a Chinese language conversion interface for the Windows operating system...

Excerpts >>

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2] "China's Homegrown Stars," BusinessWeek Online, May 12, 2003.

3] Hong Kong based Founder Group has businesses including digital broadcasting, network publishing and e-commerce services. The company generated revenues of $199.6 million for the year 2003.

 

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