In China, plagiarization is an established business model

Summary:Copying business ideas from both foreign and domestic firms has been standard operating procedure for Chinese Internet companies. But these borrowing practices could be losing their momentum.

It has been a common phenomenon for Chinese Internet companies to copy original ideas born abroad.

Tencent's QQ instant messaging is based on Israel's ICQ. Baidu's search engine is a copy of Google's. Online retailer Alibaba mimics Amazon, while online video portal Youku was once known as China's YouTube, and Sina Weibo has been called China's Twitter. This phenomenon is referred to as C2C; namely, "COPY TO China".

But these  companies not only copy ideas originated by foreign counterparts; they at times borrow ideas from domestic firms. China's most utilized Internet services portal, Tencent, has the most charges to answer in this regard. Tencent is China's biggest Internet company by market value. This is attributed mainly to its chat tool QQ (a MSN messenger-like instant messaging software). As of December 31, 2011, Tencent QQ boasts 721 million  active accounts, and its peak simultaneous online user accounts has reached 152.7 million.

Though seldom being the first to enter the Internet market, Tencent often catches up from behind and even surpasses its front-runners by taking advantage of its huge Internet user base (the largest in China) and original ideas by industry pioneers. Backed by a huge market share, it succeeds in promoting new products by bundling them into its dominant QQ instant-messaging tool.

But very recently, an outcry against Tencent has been echoing in the China's Internet industry.

On April 12, one of China's four major portals--also the proxy operator of Blizzard Entertainment's popular online role-playing game World of Warcraft--NetEase Inc. said its key mobile news app was flagrantly plagiarized by Tencent in the latter's iPhone news app Version 2.0.

In a statement published on its website, NetEase said Tencent's version of the news app directly copied its design ideas in overall layout, photo viewing and commenting.

Indeed, screen grabs of the iPhone news app of NetEase and Tencent look very much the same.

But Netease also seems to have something to clarify. Four days after it slammed Tencent, China's  most popular Yelp-like local merchant recommendation platform Da Zhong Dian Pin accused Netease's mobile client named "Fan Fan" of plagiarizing huge amounts of contents from it and urged Netease to take "Fan Fan" off shelves, or it will take legal action.

A succession of finger-pointing has evoked public reflections.

On April 15, speaking at the opening ceremony of China's 14th National People's Congress Antimonopoly Law Forum, Zhou Hongyi, Chairman of NASDAQ listed company Qihoo 360 Technology Co., Ltd., said the copying-and-bundling model adopted by some big companies has a far-reaching negative impact on China's Internet industry.

"Several firms have emerged as the leading Internet companies in China, but monopoly, especially copying and bundling, has robbed many other Internet companies of opportunities for innovation, and even the incentives to innovate, " said Zhou. Zhou's Qihoo 360 is in direct competition with Tencent in terms of Internet security products.

Previously, China's Internet companies generally gave tacit approval to plagiarizing. Yet as the awareness of intellectual property rights grows and the number of companies with original designs increases, copying could gradually lose its momentum. When Tencent launched its open platform last year, CEO Ma Huateng in a high-profile announcement said "(Tencent) will not act as an umpire and an athlete at the same time, " suggesting Tencent will play fair with its partners.

Hong Bo, a senior analyst of China's Internet,  also noted, "At the early stage of Internet, many domestic Internet companies, probably due to their lack of knowledge in this field, could start their business by learning from their American counterparts. Now that China has become the world's biggest Internet market, under such circumstances, China's Internet companies should have more innovative pursuits. You have to make things of your own, things different from others. "

Topics: Browser, China

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