The Ultimate Guide To China's Mobile Market 2018 - Appcoach

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The Ultimate Guide To China's Mobile Market 2018 - Appcoach
The Ultimate Guide To
China’s Mobile Market
        2018
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
01   Content

     1.   Introduction
     2.   China’s demographic
     3.   China’s mobile device market
     4.   Mobile user behavior
     5.   Mobile App market
     6.   E-commerce market overview
     7.   Mobile commerce
     8.   Cross-border e-commerce in China
     9.   Mobile game market overview
     10. Mobile Game Apps
     11. Social media network
     12. Wechat mini-programs
     13. TOUTIAO
     14. Mobile advertising market
     15. Short video market
     16. Tik Tok ( Douyin )
     17. Live streaming video
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
02   Introduction

     With the increasing popularity of mobile smartphone usage in China, mobile Internet market has
     developed rapidly. The majority of China’s Internet users use a smartphone as their primary means
     of going online. Mobile Internet users have became the main consumer group of Internet industry.

     China is the top country in consumer App spending. China’s games market is enormous, accounting
     for more than one-quarter of all global game revenue.

     Short video starting to dominate Chinese screen. Now the short video and livestream platform are
     cooperating with e-commerce. Most of the them have a cart button that directs viewers straight to
     the shopping page.
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
03      China’s Demographic

             POPULATION                                   Internet USERS                                      MOBILE USERS

           1,412 million                                      751 million                                     1,119 million
       18.54% of the world population.                   55.8% of China population                           97.5% of China’s users
        52.6% male and 47.4% female.                  Beijing, Shanghai, and Guangdong                access the Internet through phones.
 26.7% in rural areas and 73.3% in urban areas.   have the highest Internet penetration rates
                                                                 of over 74%.

                                                                                                China’s mobile Internet users can be
                                                                                                characterized as young, predominantly
                                                                                                with a lower-to-medium level income and
                                                                                                education.
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
04   China’s Mobile Device Market

Devices used to access the Internet
by users in china

                                      Mobile phone     • 7 out of 10 online purchases in China
                                         97.5%         are now made on mobile devices.

                                        Desktop PC
                                                       • Smartphone users in China accounted
                                           53%
                                                       for 59.3% of all mobile phone users in
                                                       2018.
 Internet                                     Laptop
                                              35.8%
                                                       • Adults in China spend 2 hours and 39

                                          Tablet       minutes a day on mobile devices in 2018.
                                          27.3%

                                       TV
                                      28.0%
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
05     China’s Mobile Device Market(Cont.)

 •   The Chinese companies have long left the cheap segment and are producing more and more high-end smartphones.
 •   China is the #1 Android market with 731 million active smartphones.
 •   The top 5 brands (Huawei , Oppo , Vivo , Apple , Xiaomi) captured a record 83% of the China smartphone market .
 •   The top 5 Chinese brands (Oppo , Huawei , Xiaomi , Vivo ,and Lenovo) account for 40.1% of all Android smartphones in use
 globally.
 •   Huawei continues to lead the Chinese smartphone market with 26% market share followed by Oppo and vivo with 19% and 18%
 share respectively.

       Share of active devices per operating system                   China Smartphone Market Share: By quarter
                      (July 2018)

                          23%

                                             Ios
                                             Android

              77%
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
06      Mobile User Behavior

 Users under 15 years used Apps that help with homework and so did users between the ages of 36 to 45, their parents. Those in
 the 16 to 25 age bracket preferred playing mobile games such as honor of kings.

             The average mobile Internet user spent 4.2 hours on Apps each day.

                                                               Shopping
                                                               about 11 minutes

           Watching Video
        close to 30 minutes

                                                                                       Getting News And Information
     Social Network Apps                                                               about 12 minutes
      more than 2.5 hours

                                                                       Playing Games
                                                                       about 10 minutes
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
07    Mobile App Market

     China already stands above the rest of the world in terms of both downloads and consumer spending, it will continue to
     be a dominant force in the global App economy.

                                   Top countries by downloads (billion)in 2017

                                China         India          USA          Brazil         Russia
                                    Top countries by spend (billions)in 2017

                              China           USA          Japan      South Korea      Germany

 $1 out of every $4 dollars generated from the App stores, in-App ads and mobile commerce is generated by the Chinese market.
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
08       Mobile App Market

•    On average, a Chinese mobile netizen installed 42 Apps in Q1 2018. Chinese mobile netizen on average installed 6.6 Apps and
     uninstalled 5 Apps every month.
•    Mobile gaming Apps took the largest share of 79% in revenue.
•    Consumers in China spend the majority of their in-App time in chat Apps.
•    Tik Tok topped the ranking of most downloaded Apps on iOS store in China in March 2018. E-commerce App Pinduoduo moved
     up 12 places to the fifth. WeChat led the ranking of top 20 mobile Apps in China.

                     Top 10 App categories in china by coverage & active use (Android)

                      Communication Video     Music     Games Ecommerce Finance Photography   News   Education
The Ultimate Guide To China's Mobile Market 2018 - Appcoach
09   E-commerce Market Overview

       With a market volume of US$636,087M in 2018, most revenue is generated in China.
          The market's largest segment is Fashion with a market volume of US$246,877m in 2018.

                                                                         $636,089M
                                                                         Revenue in the “ecommerce"
                                      1,119M                             segment .
                            Number of users

                                                                                  $634.31
                                                                                  Average revenue per user
                  72.3%
         user penetration

                                                           12.4%
                                                           Revenue annual growth rate (CAGR
                                                           2018-2022)

                  a share of 33.5% of users is 25-34 years old.

                  Behavior-based analysis leads to personalization and data driven optimization,
                  ecommerce initiatives will target much more specifically.
10       M-commerce

•    Mobile will reach 70% of e-commerce traffic by the end of 2018.

•    China has the highest number of iOS shopping Apps at over 32,000, followed by the US and the UK.

•    52% of Chinese consumers use their mobile shopping Apps on a weekly or daily basis, as compared to 14% of consumers
     globally.

•    In the west, it’s more common to use an e-commerce site as the final stop when completing their transaction, whereas in China,
     e-commerce sites are destinations where you can make new discoveries, acquire information, and socialize with your peers.
11       M-commerce

•   Wechat is the best channel for operating Internet-based products. Pinduoduo was popularized through incentivized group
    purchases at low prices with Wechat friends through social interactions on the Wechat feed named Wechat moments.

•   Taobao says the live platform has a conversion rate of 32%. In Alibaba’s singles’ day festival, the platform say as many as 3 billion
    views. For certain stores, as many as 90% of sales come from the livestreaming platform.

•    Little Red Book has infinite scrollable content generated by users, who offer product reviews, styling tips, pricing tips, and so on.
    The App targets Chinese women aged 18-35, and makes everyone involved both a consumer and an influencer.

•   Average order on Pinduoduo is 6 USD, against 30 USD on Taobao/Tmall and 60 USD on JD.com
12    Cross-border E-commerce In China

           Why Chinese likes cross-border shopping

     To access higher quality, trusted products                    •   Cross-border shoppers
                                                                       make frequent purchases between
                                                                       300 RMB and 1,000 RMB.

                                                                   •   While the traditional e-commerce
     To lower the risk of counterfeits
                                                                       market is heavily dominated by
                                                                       Alibaba (with about 60-70% market
                                                                       share), cross-border e-commerce is
     Fashion is the top category bought from overseas retailers.
                                                                       much more fragmented with no
                                                                       player getting more than 25% of the
                                                                       total market.

        Fashion            Beauty & Cosmetics     Mom & Baby
13   Cross-border E-commerce In China

           Female cross-border shoppers spend much more than male shoppers.

      Women spending $976 on average per year, which is 20% more than men in cross-border shopping.

                                                    Women seek Chinese language customer support
                Men seek fast delivery
                                                    and relevant content on the supplier's website

 Japan is the overseas origin country that Chinese online shoppers have most confidence in.

        Japan       South Korea      USA      Australia       France    Germany         UK
14   Cross-border E-commerce In China

                 Cross-border E-commerce Key Players (retailers) 2017 Q4 In China
15   Mobile Game Market Overview

                                                             $16,253M
                                                             Revenue in the "mobile games"
                                      582M                   segment .
                   Number of mobile gamers

                                                                    $38.49
                                                                    Average revenue per user
                    30.4%
           User penetration

                                                   8.5%
                                                   Revenue annual growth rate (CAGR
                                                   2018-2022)

         With A market volume of $16,253M , most revenue is generated in China.

                       China     US          Japan South Korea     UK
16       Mobile Game Apps

     •   Mobile game market in China is dominated by Internet giants like Tencent, and Netease.

     •   Tencent also tapped into social elements that helped make mobile games particularly sticky. In China, the game utilizes
         ubiquitous chat services like QQ and Wechat so players can invite friends, see who is online, or discuss in-game
         strategies.

                          Top five genres of Chinese mobile games going overseas
                          By market share

                                 Action          RPG         Strategy        Casual       Education

                       Action, RPG, and Strategy are the three most popular genres,
                       which, in total, account for 44% of Chinese games in the overseas market.
17    Social Media Network

                                                                       Social network Users
China is the world's largest social network market

Share of Chinese population who are using social networks:43.07%
Share of mobile users of social networks in China:61.6%
Share of students among social network users in China:37.5%
Share of Chinese Internet users who write or follow microblogs:88.1%
                                                                          616.5 million
18     Social Media Network

              Satisfactory ratings for social media sub-categories (0-100 scale)

                                                                                                                      Overall score: 79.8

                Life service    Social with   Social within                                  Social within   Dating social
     WeChat                                                   Messenger Apps   Weibo   BBS       Video
                 App/sites     E-commerce      news Apps                                     /Live Stream      networks

     Despite Facebook being banned in the country,
     local social networking sites such as, Tencent & Weibo, have been attracting users nevertheless.
19        Wechat Mini-programs

                                                                                            Ecommerce mini-programs industry
 •     By 2018 Q2, developers published 1000,000 mini programs.                                       distribution
                                                                                                                                     fresh fruit &
                                                                                                    domestic other
 •     The number of mini program users has reached 280 million.                                   appliances 10%
                                                                                                                                      vegetables
                                                                                                                                         18%
 •     95% of e-commerce firms in China have created mini                        electronic and digital3%
                                                                                                       devices
                                                                                             6%
 programs to provide users the convenience of shopping within
 WeChat                                                                                 education and
                                                                                           training
 •      only 56% of WeChat users currently use mini programs for                              6%
 over 10 mins a day when the daily average time spent on
 WeChat is 66 minutes.                                                                  transportation                                       clothes and
                                                                                             14%                                                shoes
 •     Only 2.1% of mini programs also have a native App.
                                                                                                                                                 29%

                                                                                                         living goods
                                                                                                              14%

                  How many times do users                                           87% of users spend more than 200 RMB
                open mini-programs in a week?                                           per month via mini-programs

                                     1-3 times   4-6 times
     Under once a week Once a week                           7-10 times pe day         Under ¥200   ¥201-500   ¥501-1,000 ¥1,001-1,500 Above ¥1,500
                                      per day     per day
20       TOUTIAO

     •   Toutiao claims to have 200 million daily active users.
     •   Unlike Wechat and Weibo users, content consumption is the
     principal focus of Toutiao users.
     •   The firm does not have any original writers. It uses AI
     technology to organize daily news from partners and gives
     recommendations on their homepage. All the featured articles and
     videos are selected for each user according to their locations, click
     and browser history, and even phone models.

                           40%
                         60%
                                                                   Toutiao users spend 74 mins in the App every day.

     a share of 85% of users is 18-30 years old.
21   Mobile Advertising Market

                           Top 5 Countries Spending On Mobile Ads ( In Billions)

                                 USA           China          UK           Japan         Germany

     Internet advertising overtook advertising on traditional television to become the world’s biggest advertising medium,
     accounting for 37.6% of total ad expenditure.

     Mobile ads will make up 80% of all Internet ad spend in China by 2019.

                                                                                       Alibaba                  Tencent
                                                                                                    72%
          The fast growth of mobile advertising spend in China                                       of total
                                                                                                  mobile ad spend
          is mainly driven by Baidu, Alibaba, and Tencent

                                                                                                     Baidu
22      Short Video Market

                                                                 Share Of Short Video Apps   Short video Users
     The penetration rate of App which allows users to
                                                                        Time Spent
     livestream or share short-form videos almost doubled
     compared with 2016, and the daily user rate is now higher
     than the major video-streaming websites.

                                                                                              410 million
     Daily active mobile short video App users in China,
     By platform, Dec 2017 & Mar 2018
     Millions                                                                   Daily Time Spent Per User
                                                                                Of Short Video Apps
                              Dec 2017 Mar 2018

               Kuaishou          102.5          107.7
               Douyin             17.4           45.6
               Huoshan            22.8           41.6
               Xigua Video        24.0           38.6
               Kuai Shipin          2.7           6.2
               Meipai               4.2           4.0

                                                                                 Dec 2017       Dec 2018
23       Short Video Market

     Both male and female short video App users are most tolerant toward those that feature creative and interesting content,
     while they are least interested in ads that feature "traditional" celebrities.

                           Leading social media marketing tactics in China (2017 & 2018)
                                                % of respondents

                         100

                           50

                            0

                                  Internet celebrities          Social ecommerce           Short video
                                and key opinion leaders                                         &
                                                                                         Live streaming
                                                                  2017        2018
24       Tik Tok ( Douyin )

                                                                                   Daily active user
     Designed for the new generation of creators, Tik Tok, the
     popular short-video social platform, allows users to quickly and
     easily create short videos to share with friends and the world.

                             60%                                                      150 million
                           40%                                          Tik Tok is the market leader in Thailand, Japan,
                                                                        the Philippines, Malaysia, Vietnam and Cambodia.
                                                                        ( App name of Tik Tok in China market ).
     Top downloads from App store (Q1 2018)

        Tik Tok YouTube WhatsApp Instagram Facebook WeChat

      Tik Tok has become the world most downloaded non-game App
      in the ios App store for the first quarter of 2018.
25       Live Streaming Video

     • The most popular show categories are real-life live streaming, game live streaming.
     • By 2018 the estimated number of video game streaming users in China will reach 300 million.
     • The latest trend is live-streaming on the main Chinese e-commerce platforms, such as Taobao, Tmall and JD. Most of
         the live-streams have a cart button that directs viewers straight to the shopping page.
     •   Starbucks opened a premium store in Shanghai and they live-streamed the grand opening on Taobao. They got almost
         180,000 viewers during the 3-hour-long broadcast.

                                                  Chinese Livestreaming App Rankings
                                                          Weekly active users/           Weekly visits
                                            Platform
                                                          All the weekly active users    Per person

                                           Huya Zhibo            0.60%                        38.7
                                           YY                     0.52%                       42.3
                                           Douyu                 0.47%                        41.3
                                           Qi E                   0.38%                       35.4
                                           ChuShou               0.25%                       39.4
                                           Panda TV              0.19%                       31.6
26    Data Resources & References

     The report is based on authoritative data, which has been integrated by Appcoach
     from the following third-party platforms:

     App annie
     Azoya international
     Cheetah Data
     China Internet watch
     Daxueconsulting
     Emarketer
     iResearch
     Kantar100EC
     NEWZOO
     Questmobile
     Statista
     WeChat conference 2018
About Appcoach

Founded in Shanghai with 5 offices globally.
Appcoach is a technology-enabled, global mobile
performance agency with local marketing insights.

Appcoach activates global mobile user acquisition
strategies using local marketing initiatives across
search & display networks, social media, creative
localization and traditional media buying.
Appcoach patented technology products Ultron,
enable advertisers develop their presence at scale
and publishers monetize their traffic effectively in
global markets.

Appcoach is a certified Google Premier Partner
and is listed in LUMA Partners Mobile LUMAscape
2017.
Global Mobile Performance Marketing Agency

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