China Internet Market 2012 - Extended Version

China’s Internet Market The Most Up-To-Date Insights To Help Understand The World’s Most Important Market Extended Version

#cim12 #internet #growth #china2012

Lange & Manes

#cim12 #internet #growth Lange / Manes

Intro Page 3 Demographics Page 11 User Behavior 2 Online Advertising Page 29 E-Commerce Page 37 Mobile Page 43 Social Page 51

11/29/2012

2


Sources

1.  Asia Digital Marketing Yearbook 2012

2.  CNNIC: China Internet Report No. 30 (July 2012) 3. Individual Research by the authors

3

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China Is An Unbelievably Large And Dynamic Internet Market •  537 million Internet users in June 2012, representing an increase of 53 million

from June 2011

•  Internet penetration rate of only 38.3% ▫  Huge upside potential in the future

•  China’s Internet population is expected to exceed 700 million by 2016

•  356 million mobile Internet users in 2011, marking a mobile Internet penetration rate of 36.5%

•  The Chinese e-commerce market grew to USD 1.113 trillion in 2011 ▫  46% y-o-y increase

•  Total revenues from online shopping reached USD 123 billion in 2011 ▫  68% y-o-y increase

4

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Example? Alibaba just became the world’s biggest e-commerce company with USD 157 billion1 in sales2

5

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1: Ca. 1 trillion RMB 2: Source: venturebeat.com (Dec. 3. 2012)

0,02 1,00 8,00 16,90 43,30 100,00

208,30

400,00

632,00

1000,70

0,0

200,0

400,0

600,0

800,0

1.000,0

1.200,0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

In billion RMB

Taobao Marketplace and Tmall.com Gross Merchandise Volume

2,225% growth

within 5 years!


Sadly Enough, Most Internet Companies Fail In China •  They lose against Chinese competitors, because they know less

about…

...why Chinese customers go online

…what Chinese customers expect from their products

…where Chinese customers buy online

…how Chinese customers make buying decisions

…what determines Chinese customers’ buying decisions

…what advertising channels are most effective for reaching their target groups

…how Chinese customers perceive online advertisements

6

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Example #1 Example #2

•  Opened ‘google.com’ to Mainland China in 1999 and ‘google.cn’ in 2006

•  Google’s market share in search declined from around 25% in 2002 to 17% in 2011

•  Market share in online advertising fell to approximately 7% in 2011

•  Today, Baidu controls the search market with an elusive 78% share

•  Entered China in 1999 •  China operations were mostly

steered from Taiwan and Hong Kong offices

•  Despite customer expectations, Yahoo mostly neglected wireless services

•  After the emergence of local competitors like Sina and Sohu, Yahoo lost most of its market share

•  In 2005 Yahoo sold its China business to Alibaba Group

7

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Example #3 Example #4

•  Entered China in 2003

•  Shut down its China offices in 2006 with a remaining share of 20% in the online auction market and went into a minority joint venture with Tom Online

•  Chinese competitor Taobao captures more than 60% market share within two years after entrance

•  Entered China in early 2011

•  In December 2011, Groupon China had a market share of 2.8%

•  In June 2012 it announced to merge with larger rival Ftuan (funded by Tencent, Groupon’s JV partner)

8

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To Avoid The Same Fate, Companies Need To Begin Understanding The Market We have put together the most up-to-date insights for the Chinese Internet market in…

…to help companies better understand China’s unique market characteristics and increase the likelihood of success.

9

Demographics User Behavior

Online Advertising E-Commerce

Mobile

Social

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Intro Page 3 Demographics Page 11 User Behavior Page 22 Online Advertising Page 29 E-Commerce Page 37 Mobile Page 43 Social Page 51

10

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Demographical Key Facts

•  Low purchasing power: more than 90% of all Chinese Internet Users earn less than RMB 5.000 (USD 790) per month

•  Almost as much Internet users access the Internet via mobile devices (69.3%), compared to PCs (73.4%)

•  China’s Internet users are young: almost one third are students (30.2%)

•  Only 36% of all Internet users shop or have at least shopped once online (estimated to increase to 47% in 2015)1

•  Only 20.8% of the total e-commerce transaction volume has been generated through e-payment solutions in 20102 (cash-on-delivery still the most popular paying method in China)

11

1.  Boston Consulting Group (2012) 2.  iResearch (2012)

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China Has Almost Doubled Its Internet Users Since 2008

298,0 338,0

384,0 420,0

457,0 485,0

513,0 537,0

22,6% 25,5%

28,9% 31,8%

34,3% 36,2%

38,3% 39,9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

100

200

300

400

500

600

700

800

2008/12 2009/06 2009/12 2010/06 2010/12 2011/6 2011/12 2012/06

Development of Internet Penetration

Internet User Penetration Rate

in million Users

12

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The Mobile Penetration Among Internet Users Has Increased More Than Sevenfold Since 2007

50,4 73,1

117,6 155,5

233,4

276,8 302,7 317,7

355,6 388,3

24,0% 28,9%

39,5%

46,0%

60,8% 65,9% 66,2% 65,5%

69,3% 72,2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

50

100

150

200

250

300

350

400

450

500

2007/12 2008/06 2008/12 2009/06 2009/12 2010/06 2010/12 2011/6 2011/12 2012/06

Development of Mobile Penetration

Mobile User Penetration Rate

in million Users

13

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Mobile Phones Have Surpassed Desktop Computers As The No. 1 Internet Access Device

73,4% 69,3%

46,8%

70,7% 72,2%

45,1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Desktops Mobile Phones Notebook

Distribution of Internet Access by Devices

2011/12 2012/06

14

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A Solid Ground For This Development Is The Increasing Popularity Of Mobile Phones In Rural Areas

50,6% 47,2%

22,3%

45,7%

60,4%

8,7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Desktops Mobile Phones Notebook

Rural/Urban Distribution of Access Devices

Urban Rural

15

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Internet Cafés Still Play An Important Role In China, Although Tendency Is Declining

88,8%

27,9% 33,2%

18,7% 13,6%

90,3%

25,8% 30,9%

16,8% 13,6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Home Internet Café Office School/Uni Public Places

Places for Accessing The Internet

2011/12 2012/06

16

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Internet Usage Is Split Evenly Between Male And Female

55,9%

44,1%

55,0%

45,0%

0%

10%

20%

30%

40%

50%

60%

Male Female

Gender Distribution

2011 2012

17

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Chinese Internet Users Are Young, But Demographic Aging And Growing Familiarity With The Internet Lead To A Shift

1,7%

26,7%

29,8%

25,7%

11,4%

4,1%

0,7% 1,2%

25,4%

30,2%

25,5%

12,0%

4,3%

1,4%

0%

5%

10%

15%

20%

25%

30%

35%

Below 10 10-19 20-29 30-39 40-49 50-59 60+

Age Distribution

2011/12 2012/06

18

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Income Levels Do Increase But Are Still Very Low: 90% Of China’s Internet Users Make Less Than USD 750 per month

3,8% 5,0%

13,5%

17,9%

11,9%

10,1%

12,5%

17,5%

7,9%

4,5% 5,4%

16,1% 16,9%

9,8% 9,3%

11,0%

17,8%

9,2%

0%

3%

6%

9%

12%

15%

18%

21%

Above 8000 5001-8000 3001-5000 2001-3000 1501-2000 1001-1500 501-1000 500 or below

No Income

Income Distribution (RMB¹ per Month)

2011/12 2012/06

1.  1000 RMB equal appr. USD 150

19

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Lower Income Level + Young Internet Users = Low Proportion Of Online Shoppers

37,8%

77,0% 72,0%

66,0% 61,0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

China South Korea USA UK Japan

Proportion of Online Shoppers to total Internet Population

20

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21

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User Behavior Key Facts

•  As of June 2012, an average Chinese Internet user spends 19.9 hours per week online (USA: ca. 9 hours)

•  415 million Chinese Internet users go online to chat, 325 million to watch videos

•  41.3% of all online video viewers in China watched 4 hours or more of online videos per day (on the weekend)

•  In 2011, 324 million Internet users went online to play games

•  More than 50% of China’s Internet users have played games via their mobile devices

•  Only 21% find consumer product reviews on company websites trustworthy •  People between the ages of 18 and 27 represent the heaviest user group in China,

averaging on 5 hours or more daily for surfing the Internet

22

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Chinese Spend More And More Time Online

18.3

18.7

19.9

18

18

19

19

20

20

21

2010 2011 2012/06

Avg. Time Spending Online (In Hours, Per Week)

23

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This Is Why Chinese People Go Online

52,9%

46,9% 42,3%

64,9%

31,9% 27,4%

21,5%

42,1%

52,3%

29,9% 32,0%

40,5% 42,4%

61,5%

27,6%

37,2%

20,7%

40,7% 40,9%

16,9%

0%

10%

20%

30%

40%

50%

60%

70%

Motivation for Accessing the Internet

24

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And This Is What They Do Online

60,5%

71,6%

35,0%

54,0%

49,0% 52,0%

16,2% 15,4%

67,2%

21,3%

74,1%

59,6%

38,8%

71,3%

53,4%

30,4%

55,6%

70,8% 74,6%

22,7%

38,7%

49,6%

0%

10%

20%

30%

40%

50%

60%

70%

80% Distribution by Online Activity

25

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Within Two Years, Online Payment Acceptance Has Increased By 11,7 %

374,5 352,6 362,2 353,0

294,5 304,1 284,0

249,7 235,1

194,8

160,5 137,2 139,5 148,2

70,9

81,9% 77,1% 79,2% 77,2%

64,4% 66,5% 62,1%

54,6% 51,4% 42,6%

35,1% 30,0% 30,5% 32,4%

15,5%

3,1% 9,2%

5,4% 2,6% 7,9%

2,4% 6,1%

0,8% -2,2% 0,1% 7,6%

11,7% 7,8%

-2,8% -20,6%

-25%

-5%

15%

35%

55%

75%

95%

0

50

100

150

200

250

300

350

400 Popularity Distributed by Online Service

Number of Users Proportion of Total Internet User % Change from 2010/06

26

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Chinese Customers Don’t Really Care About Reviews From People They Don’t Know

61%

21% 20% 19% 17% 16% 14% 14% 13% 12% 11% 9% 8% 8% 8% 8% 8% 8% 7% 6% 6% 5% 5% 5% 4%

0%

10%

20%

30%

40%

50%

60%

70%

Rate of Users With Complete Trust In Respective Sources

27

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28

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Online Advertising Key Facts

•  China’s online advertising spend reached USD 8.11 billion in 2011 ▫  57.3% y-o-y increase

•  In 2011, online for the first time exceeded print in terms of advertising spend generated

•  Online video advertising has generated more than USD 260 million in Q4 2011 alone

•  China counts 465 million online video viewers in total

•  Youku and Tudou, the two biggest online video portals, together account for 35.5% of the total market share

•  The search market was worth USD 3 billion in 2011 ▫  70% y.o.y growth

•  By 2015, China’s online advertising market is expected to be worth USD 11.3 billion

29

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Online Advertising Spend Has Surpassed Print For The First Time in 2011

5,16

8,11

15,00

7,00

0

2

4

6

8

10

12

14

16

2010 2011 2015 (estimated)

Online Advertising Spend (RMB billion)

Online Print

30

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Mobile Advertising Revenue Is Expected To Quadruple By 2015

0,38

1,00

4,00

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

2011 2012 (estimated) 2015 (estimated)

Mobile Advertising Revenues (RMB billion)

31

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Baidu And Alibaba Together Branch Out The Online Advertising Market

31%

18%

7% 4%

4%

3%

2%

2%

2% 1%

26%

Market Share

Baidu

Alibaba

Google China

Sohu

Sina

Tencent

Sofun

Qihoo360

Youku

Netease

Other

32

11/29/2012


These Are The 20 Most Active Digital Advertisers

78% 77% 75% 73% 73% 70% 69% 68% 68% 67% 67% 67% 67% 66% 66% 65% 65% 65% 64% 64%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Rate of Users Who Have Seen Ads By Respective Brands Via Digital Media

33

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And These Are The 20 Most Successful Advertisers

56%

46% 43%

40% 40% 39% 39% 39% 36% 35% 35% 35% 34% 33% 33% 33% 33% 33% 32% 32%

0%

10%

20%

30%

40%

50%

60%

Rate of Users Who Said Ads Significantly Increased Interest in Using The Brand

34

11/29/2012


In China, Popup Ads Are More Common Than Regular Banner Ads

51% 49% 48%

38%

23% 21%

5% 3%

10%

0%

10%

20%

30%

40%

50%

60%

Sponsored Content

Dedicated Websites

Popup Ads Banner Ads Email Mobile Ads Ads in Video Games

Ads in Virtual Worlds

Others

Rate of Users Who Have Seen Brands Use Respective Ad Forms on The Internet

35

11/29/2012



36

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E-Commerce Key Facts

•  Today the average Chinese online shopper spends about USD 500 annually; it is expected that this number doubles within 5 years to USD 1.000, which equals the number of US spend

•  At the end of 2011, online retail accounted for 3.3% of the total retail market (2015: 7.4%)

•  The number of online shoppers is expected to increase to 329 million by 2015

•  B2C transactions generated USD 38.03 billion in 2011 ▫  130% y-o-y increase

•  The online gaming market was worth more than USD 1.5 billion in Q4 2011 alone

•  E-commerce sales are expected to generate a transaction volume of USD 2.86 trillion by 2015

37

11/29/2012


In 1H2012, 16 Million Internet Users Turned Into Buying Customers

194 210

329 38% 39%

47%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

50

100

150

200

250

300

350

400

2011/12 2012/06 2015 (estimated)

Number of Online Shoppers (in Million)

Online Shopper Proportion Of Total Internet Users

in million

38

11/29/2012


On A Percentage Basis, Chinese Purchase Beer More Often Than They Purchase Films

51,7%

41,0%

33,0%

23,2% 22,0% 21,7% 21,4%

18,3% 16,2% 13,9% 13,6% 12,7% 12,7% 12,5%

9,3% 7,5% 5,9% 5,7% 5,5%

0%

10%

20%

30%

40%

50%

60%

Rate of Users Who Have Shopped in This Category

39

11/29/2012


For General Information About A Product Or Service, Chinese Customers Prefer Search Engines

90%

63% 53%

42% 38% 28% 28%

22%

5% 5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Rate of Users Who Use This Channel For Collecting General Product Information

40

11/29/2012

* Even though FB and Twitter are blocked in China, users find their ways to the sites (e.g. via VPN clients)


When It Comes To Purchasing A Product, Customers Increasingly Use A Product’s Website For Collecting Information

77%

66% 65% 57% 55%

49%

30%

16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Rate of Users Who Use This Channel For Collecting Information Immediately Prior To Purchase

41

11/29/2012



42

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Mobile Key Facts

•  1.013 billion mobile subscribers at the end of March 2012

•  356 million mobile Internet users in 2011, marking a mobile Internet penetration rate of 36.5%

•  90% of mobile Internet users access the Internet only via mobile devices

•  At the end of November 2011, the number of 3G subscribers reached 118 million

•  Taobao, the #1 e-commerce company in China, generated USD 1.9 billion in turnover through mobile in 2011

•  The number of mobile Internet users is expected to reach 712 million in 2015

43

11/29/2012


The Upside In Mobile Commerce Is Enormous

3,00 6,20

67,50

0

10

20

30

40

50

60

70

80

2010 2011 2015 (estimated)

Total Turnover Generated (In USD billion)

44

11/29/2012


Around 90% Of All Mobile Users Are Between 10 And 39 Years „Young“

29,8%

36,0%

23,7%

7,9%

1,5% 0,2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

10-19 20-29 30-39 40-49 50-59 60+

Age Distribution

45

11/29/2012


More Than 75% of Mobile Users Have High School Degrees Or Less

6,9%

35,0% 34,3%

10,9% 13,0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Primary School Junior Middle High School Junior College University and above

Education Level

46

11/29/2012


In China, Mobile Users Don’t Earn More Than The Average Internet User

3,9%

5,4%

14,3%

17,6%

11,6%

9,8%

12,9%

17,3%

7,2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Above 8000 5001-8000 3001-5000 2001-3000 1501-2000 1001-1500 501-1000 500 or below

No Income

Income Distribution (RMB¹ per month)

47

1.  Remember: 1000 RMB equal approximately USD 150

11/29/2012


Search, Microblogging, Music, Video, Payment And Shopping Are Benefiting The Most From The Mobile Boom In China

83,1%

62,1% 60,9%

45,7% 42,3%

38,5%

30,2% 29,7%

24,1% 24,1%

8,6% 8,2% 6,6% 4,0% 2,9%

83,0%

66,7%

58,3%

49,2%

43,8% 40,0%

26,8% 25,9% 27,7%

11,4% 9,9% 9,7%

4,8% 3,9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rate of Utilization For Different Mobile Activities

2011/12 2012/06

48

11/29/2012


User Numbers For Mobile Shopping Have Increased By 59.7%; For Mobile Payment By 45.2%

30,6

23,5

44,4

37,5

0

5

10

15

20

25

30

35

40

45

50

Mobile Payment Mobile Shopping

In Million

Number of Mobile Payment and Mobile Commerce Users

2011/12 2012/06

49

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50

11/29/2012


Social Media Key Facts

•  Social network services in China are highly diversified, several platforms serve different customer segments (e.g. Kaixini001 à white collars; Renren à students; 51.com à rural; Qzone à teenagers)

•  The online video market is also very fragmented, but about to consolidate (started with the merger of Tudou and Youku)

•  Chinese Internet users mostly watch longer form content, such as news reports and TV series

•  The average Chinese spends about 1 hour on online video platforms (USA: 15mins)

•  70% of online video content in China is professionally produced

51

11/29/2012


Tencent‘s Qzone Outperforms The Market

54

210

81 82

50

31 26

160

2,5

22,0

3,6

1,0

2,7

0,7 0,3

4,0

0

5

10

15

20

25

0

20

40

60

80

100

120

140

160

180

200

220

Sina Weibo Qzone Pengyou Tencent Weibo

Renren Kaixin001 Douban Youku

Social Media Sites Distributed by Unique Visitors and Page Views

Monthly Unique Visitors (In Million) Daily Page Views (In Billion)

in million in billion

52

11/29/2012


This Is How Long Chinese Spend On Different Social Networks

22,9

31,9

15,3

28,9

15,2

9,2 8,5

47,4

15,2% 15,5%

6,2% 6,8% 4,0%

0,9% 0,5%

17,0%

70,0%

51,0%

42,0%

25,0%

27,0%

10,0% 7,0%

70,1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

5

10

15

20

25

30

35

40

45

50

Qzone Sina Weibo Baidu Postbar

Tencent Pengyou

Tencent Weibo

Sohu Weibo Sohu Bai Society

Others

Time Per Day Market Share (by Time) Penetration Rate

in minutes

53

11/29/2012


And This Is Why Chinese Internet Users Engage In Social Media

1,7% 1,8% 0,6%

16,9%

4,0%

7,9%

0,2%

3,3%

0,7% 1,8%

4,0% 2,8%

0,7%

2,8%

0,5%

2,3%

0,5% 0,2%

2,2% 2,3% 0,8%

4,7%

1,9%

13,1%

0,7%

2,8% 2,1%

3,2%

4,5%

0,5%

2,2% 1,3%

3,0%

1,7%

3,8%

0,7% 1,4%

0%

3%

6%

9%

12%

15%

18%

21%

% Of SNS Users % Of SNS Users Who Joined SN Groups

54

11/29/2012


Relative To Overall Internet Growth, The Trend For Social Networks Is Negative

244,2 250,5

47,6%

46,6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

50

100

150

200

250

300

350

2011/12 2012/06

Total Number of SNS User Proportion of Total Internet Users

in million

55

11/29/2012


So Is The Trend For Group Buying

64,6 61,8

12,6%

11,5%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

0

10

20

30

40

50

60

70

80

90

100

2011/12 2012/06 Total Number of Group Buyers Proportion Of Total Internet Users

in million

56

11/29/2012


China‘s Social Network Users Are Highly Educated

1,6%

7,8%

35,7%

44,1%

10,7%

0%

10%

20%

30%

40%

50%

Schooling until 16 Schoolung until 18 Trade/Technical School Or College

University Post Graduate

Distribution of Social Networkers by Education

57

11/29/2012


The Vast Majority Of Social Networkers Is Employed Full-Time

71,6%

2,0% 7,0%

0,9% 1,1%

13,8%

0,6% 0%

15%

30%

45%

60%

75%

90%

Full-Time Worker

Part-Time Worker

Freelancer Self-Employed Full-Time Parent

In Education Unemployed

Distribution of Social Networkers by Employment Status

58

11/29/2012


Every Third Social Network User Works In Manufacturing/Engineering Or IT, Internet And Software

4,2% 5,2% 5,3%

3,3%

18,8%

3,6% 3,6%

0,4% 1,1%

13,7%

4,9%

1,7% 1,3%

14,4%

0%

3%

6%

9%

12%

15%

18%

21%

Distribution of Social Networkers by Work Sector

59

11/29/2012


About One Third Of Social Network Users Are Ordinary Staff Member, Indicating Low To None Decision Power

2,5%

5,3%

16,0% 15,7%

29,6%

5,9% 6,6%

0%

5%

10%

15%

20%

25%

30%

35%

Company Owner

Senior Manager Mid-Level Manager

Entry-Level Manager

Team Member Support Level Other

Distribution of Social Networkers by Job Level/Responsibility at Work

60

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If You Sell To Corporations, Your Followers Are Extremely Valuable: 45.6% Of Them Deal With Purchasing Within Their Company

47,9%

23,9%

16,8%

45,6%

17,5%

0,6%

9,2%

2,2%

0%

10%

20%

30%

40%

50%

60%

General Management

Direct Report/Team

Recruiting Purchasing Managing Budgets

Advertising, Marketing

Company Strategy

Others

Distribution of Social Networkers by Work Scope

61

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Today, Every Second Internet User In China Is A Microblogger

250,0 273,7

48,7% 50,9%

0%

10%

20%

30%

40%

50%

60%

0

50

100

150

200

250

300

350

400

450

500

2011/12 2012/06 Total Number of Microblogger Proportion of Total Internet Users

in million

62

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Blogging In China Is Mainly For The Top-Educated

0,9%

6,2%

32,6%

49,5%

10,8%

0%

10%

20%

30%

40%

50%

60%

Schooling until 16 Schoolung until 18 Trade/Technical School Or College


Distribution of Bloggers by Education

63


Only 1.2% Of Bloggers Are Self-Employed/Freelancers

73,4%

1,9%

7,8%

1,2% 0,8%

11,9%

2,6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Full-Time Worker

Part-Time Worker

Freelancer Self-Employed Full-Time Parent

In Education Unemployed

Distribution of Social Bloggers by Employment Status

64

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Decision Power At Work Is Very Similar To Those For Social Network Users; Nevertheless There Are Slightly More Company Owners And Mid-Level Managers In Blogging

3,1%

6,4%

19,1% 16,9%

29,4%

4,9% 4,6%

0%

5%

10%

15%

20%

25%

30%

35%

Company Owner


Entry-Level Manager


Distribution of Bloggers by Job Level/Responsibilty at Work

65

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At A Chance Of 60.2%, A Blogger’s Work Scope Relates To Purchasing

52,7%

28,5%

21,6%

60,2%

23,5%

0,6%

9,8%

2,1%

0%

10%

20%

30%

40%

50%

60%

70%

General Management

Direct Report/Team



Company Strategy

Others

Distribution of Bloggers by Work Scope

66

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This Is Why Chinese Internet Users Blog

2,9%

1,6% 1,2%

7,1% 7,4%

1,7%

0,5%

1,6%

0,8%

4,5%

5,6%

0,7%

1,7% 1,0%

6,9%

0,5%

1,9%

0,6% 0,4%

0%

1%

2%

3%

4%

5%

6%

7%

8% In Million

67

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Microblogging Is Extremely Popular In China, In Some Work Sectors Even More Popular Than Social Network Services

3,8%

5,0%

3,0%

19,0%

4,0% 3,6%

0,8%

14,8%

5,4%

1,8% 1,5%

12,6%

4,1% 5,3%

5,3%

3,4%

17,2%

0,4% 1,0%

15,7%

4,7%

2,2% 1,6%

15,0%

5,1%

4,6% 4,0%

2,4%

19,0%

3,5%

4,8%

0,5%

1,3%

15,5%

3,7%

1,3%

2,7%

13,4%

0%

3%

6%

9%

12%

15%

18%

21%

Active Social Media Users Distributed by Work Sector

Manage SNS Profiles Use Microblogging Services Are SNS Group Members

68

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Every Second Active Social Media User In China Comes From University

0,5%

6,8%

32,2%

49,6%

11,0%

0,8%

5,9%

34,3%

47,6%

11,4%

0,5%

4,6%

28,9%

55,4%

10,7%

0%

10%

20%

30%

40%

50%

60%

Schooling until 16 Schooling until 18 Trade/Technical School Or College


Active Social Media Users Distributed by Education

Manage SNS Profiles Use Microblogging Are SNS Group Members

69

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Only 0,3% Of All Active Users Are Unemployed

71,0%

6,8%

0,9%

15,6%

0,3%

72,8%

2,0%

7,2%

1,1% 0,8%

13,3%

0,4% 2,5%

72,2%

4,0% 6,7% 0,5% 1,1%

14,7%

0,3% 2,1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Full-Time Worker

Part-Time Worker

Freelancer Self-Employed

Full-Time Parent

In Education Unemployed Other

Active Social Media Users by Employment Status

Manage SNS Profile Use Microblogging Services Are SNS Group Members

70

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The Lower The Job Level, The More Active The User; Nevertheless Mid-Level And Entry-Level Managers Remain On Par

2,6%

5,3%

16,1% 17,9%

28,9%

5,5% 4,6%

3,0%

5,2%

18,2% 17,5%

29,6%

5,3% 4,3%

2,4% 5,1%

19,8% 17,7%

25,7%

5,1% 6,2%

0%

5%

10%

15%

20%

25%

30%

35%

Company Owner


Entry-Level Manager


Active Social Media Users by Job Level

Manage SNS Profile Use Microblogging Services Are SNS Group Members

71

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More Than Half Of China’s General Management & Purchasing Workforce Actively Engages In SNS

51,1%

27,1%

18,8%

54,9%

20,0%

10,2%

2,6%

50,9%

28,3%

19,5%

55,9%

21,2%

1,0%

10,8%

2,3%

52,1%

29,2%

22,5%

63,1%

22,2%

1,1%

10,7%

2,1%

0%

10%

20%

30%

40%

50%

60%

70%

General Management

Direct Report/Team



Company Strategy

Others

Active Social Media Users by Responsibility at Work

Manage SNS Profiles Use Microblogging Services Are SNS Group Members

72

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Lessons Learned

•  Chinese customers are young, educated and mobile

•  Mobile is especially popular in rural areas, where smartphones substitute laptops and PC’s

•  Mobile shopping and mobile payment have increased heavily during the last six months

•  Online shopping acceptance is still low but steadily rising

•  Because Chinese customers don’t trust unfamiliar online shops, referral from friends and existing customers is even more important than in Western markets

•  Chinese Internet users consume more online video content than in Western markets; mostly because they see such content as another, more reliable, information source compared to state-owned media

73

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What Does This Mean For Your China Business?

•  Make referral marketing your top priority ▫  Chinese customers are extremely cautious when buying online; make use of happy

existing customers to show you are trustworthy •  Understand how and where Chinese customers perceive your ads ▫  Internet firms reach their customers in China through different channels than in the

West; this includes for example a higher focus on mobile and portals

•  Offer the right payment methods ▫  Although online shopping rates are lower in China, the right payment methods help to

increase sales on your platform; researching the e-payment market is essential in China

•  Employ local staff - also in top-level management ▫  It is a mistake to believe that Western management expertise can offset lesser local

market knowledge; there are enough Chinese young professionals with diplomas from the US or UK by now anyway

74

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About Us

75

•  B.A. in Chinese Studies, M.A. in Corporate Management & Economics •  1.5 years of academic and professional experience in China •  Advises e-commerce start ups on expanding to China

David Lange

Steffen Manes

•  Fund Manager @cfpff - venturecapital.de •  2-times Entrepreneur, worked extensively with Chinese Corporations •  Specialized in business development for start ups •  http://about.me/manes

11/29/2012

davidlange85 [at] gmail.com

steffen.manes [at] gmail.com

China Internet Market 2012 - Extended Version

Technology

Transcript of China Internet Market 2012 - Extended Version