Renren seeks offline growth

16 June 2011

BEIJING: Renren, one of China's leading social networks, is launching a new credit card which it claims will introduce a range of interactive features into the offline world.

The company, owned by Oak Pacific Interactive, has allied with the China Merchants Bank, one of the country's biggest financial services providers, to roll out the Renren CMB card.

More specifically, the two companies reported this product, available from next month, will possess numerous "social features".

These attributes should include mobile location-based tools, broadly approximating an approach adopted by Facebook Deals, allowing customers to "check in" and receive targeted offers.

Research firm Analysis International has estimated that over 6.5m people currently utilise such wireless properties in China, a figure set to rise as smartphone penetration climbs.

In sourcing deals and discounts, the Renren CMB card plans to draw on information from 10,000 of the China Merchants Bank's retail partners.

Going forward, a wide array of loyalty and incentive schemes will be presented to prospective and existing card holders by its two parents.

Renren, boasting around 33m monthly users and 122m active accounts, was listed on the New York stock exchange in May.

Its share price has fallen by 64% since then, but Evan Wilson, an analyst at Pacific Crest, argued such a sizeable audience might "provide significant revenue growth".

This could especially prove true if members can be persuaded to register and participate under their real names, rather than online nicknames.

"While Renren has significant competition, we also believe there is a good probability that it will be the leading real-name social network," said Davis.

Joseph Chen, Renren's chairman/ceo, suggested the company has a long-term outlook when assessing emerging trends in China.

"Social networking is increasingly penetrating many aspects of people's lives," said Chen.

"Through this co-branded credit card program, we see a business model we previously envisioned start to materialise, combining social, location and mobile services to make people's lives more convenient, more informed, and more fun."

China Merchants Bank, among the world's 100 most valuable brands in Millward Brown's 2011 BrandZ rankings, valued at $8.7bn, expressed confidence about its latest venture.

"We are very excited about this partnership with Renren. This is truly a milestone in the socialisation of financial services," said Jialong Liu, general Manager of the CMB Credit Card Center.

"Renren has a large base of young, highly educated users. We very much look forward to attracting many loyal consumers to our financial products through innovative social services provided by Renren."

Data sourced from Renren/Business Week; additional content by Warc staff