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Chinese digital media today Guide When it comes to digital media, mobile phones are a frequently occurring topic. From mobile video to the rise of chatting on social networks and microblogging, netizens are able to use unique methods to maintain their Internet lifestyles. In this volume we will specifically use the perspective of mobile technology to view the influence of different trends. Look out for the MOBILE symbol, which is used to point out those discoveries targeting mobile phones. 2 In the past year, Chinese Internet revenues grew 54%... … representing an increase of 13.5 billion RMB from last year Chinese Internet revenues from 2010 to 2013 Revenue （billion RMB） Growth Rate 66.9% 54.1% 800.0 46.9% 44.9% 600.0 400.0 557.9 200.0 385.0 249.9 149.8 0.0 2010 2011 2012e 2013e Source: iResearch 2012 China Internet Economy Report 3 18% of growth or 20% of growth or 55% of growth or 270 billion RMB comes from 630 billion RMB 240 billion RMB comes mobile devices comes from e-commerce from advertisements *includes ads streamed before videos *includes video searching, social networking and videos Source: iResearch 2012 China Internet Economy Report 4 Looking at the broad picture, even though trends are leaning towards users of mobile devices; online video, social networks and e-commerce still play a leading role. 371,830,000 14% year-on-year growth (Online video users) 66% of netizens Online video 275,050,000 20% year-on-year growth (Social network users) Social networks 49% of netizens 242,020,000 25% year-on-year growth E-commerce (E-commerce users) 43% of netizens Sources: CNNIC Jan 2013, National Bureau of Statistics of China 2013 5 Advertisements The headline of digital consumption reports 6 Next year, due to shifting budgets for printed media, expenses for digital media will be 24% higher than forecasts predict. Advertisement expenditures for different media from 2009 to 2014 Magazine Newspaper Internet Radio Outdoor Cinema TV 100% 90% 80% 38% 43% 42% 42% 41% 70% 60% 50% 40% 30% 18% 14% 18% 21% 24% 20% 10% 22% 22% 21% 19% 18% 0% 2009 2010 2011 2012 2013 2014 Ad expenditure share Source: ZenithOptimedia AdForecast 2013 7 This trend is being propelled by advertisements streamed before online videos; it is especially prevalent for the food and drink, beauty and skincare industries Internet expenditures for all industries by ad format (not including searches) 132% year-on-year growth Digital ad banner 20% 11% year-on-year growth 3% Display ad special format Video (Pre-roll) 77% Others year-on-year growth Source: iAdTracker February 2013 8 As of February 2013 As of February 2013 Food and drink products: growth of Cosmetic and bath products: growth 125% of50% Drinks: Nestle 6082%; C'estbon: 12331% .L'Oréal Group: 168% Food: Mars: 701%; Kraft: 3609% .Procter & Gamble: 22% Spirits: Harbin Beer: 661%; Snow Beer: 4891% .Unilever: 187% As of February 2013 Telecommunications and IT: growth As of February 2013 Automobiles: growth of of 20% 10% . China Mobile: 54% FAW-VW: 245% . China Telecom: 54% Changan Ford: 77% Dongfeng Nissan: 288% Mercedes-Benz: 287% Chery: 105% Source: iAdTracker February 2013 9 Although mobile sales only account for 8% of advertising expenditures, they are also the most rapidly growing sector. Expenditures and growth in Chinese Internet in 2012 Annual Revenue in 2012 (billion RMB) Absolute growth in2012 (billion RMB) % Growth in 2012 180 162.8 Mobile 500% 160 450% 140 329% 400% 120 350% 100 300% 80 75.3 250% 60 51.8 200% 119% 40 29.2 29.1 162% 150% 20 11.0 100% 13.0 5.2 1.3 0 50% Billion RMB 0% 6.4 Source: iResearch 2012 China Internet Economy Report 10 Users 11 The ever-increasing Internet penetration rate helps reduce difficulties with accessing the Internet from households and mobile devices Total population 564,000,000 42% of the total population Netizens year-on-year growth 16% Internet penetration rate 28% 72% of netizens of netizens Villages Cities 420,000,000 75% of mobile netizens Mobile netizens 32% year-on-year growth Sources: CNNIC Jan 2013, National Bureau of Statistics of China 2013 12 The amount of time spent on digital media is comparable to traditional media, especially among the under-30 years age group Time spent on media consumption by age group (hours per week) 40.0 3.5 2.2 4.3 1.4 35.0 0.3 15.1 30.0 12.0 4.2 Mobile Internet 17.5 25.0 2.7 17.1 Internet 20.0 TV 15.0 11.2 Radio 10.0 25.0 Newspaper 20.2 Magazine 14.1 16.5 18.5 5.0 15.1 0.0 Under 18 19-24 25-30 31-35 36-40 41+ Source: CMMS Winter 2010-2012 13 There are numerous opportunities online to target different age groups by using media portfolio optimization The proportion of time spent on different media by varying age groups 90% Others (net) 80% Game 70% 4.7% 6.4% Finance 60% 9.3% 9.6% 8.3% 7.1% 8.6% 7.4% Recreation 50% 16.5% 10.0% 9.7% 9.8% 9.8% News 40% 19.0% 16.7% 17.9% 17.4% 19.0% 30% Ecommerce 20% 44.2% 39.6% Search Service 32.6% 30.9% 35.2% 10% 29.5% Social Networking 0% Online Video 31-35 19-24 36-40 Under 18 25-30 41+ Source: iUserTracker February 2013 14 Mobile trends 15 MOBILE Its rapid growth has allowed mobile devices to become China's method of choice for accessing the Internet Internet-accessing devices Total Internet 400 Mobile 300 Desktop 200 100 Laptop 0 2H 2009 1H 2010 2H 2010 1H 2011 2H 2011 1H 2012 2H 2012 Source: CNNIC 2009-2013 16 MOBILE As a matter of fact, the amount of time mobile netizens spend on the Internet is becoming to threaten the television industry The amount of time spent weekly on different media 60.0 50.0 38.6h TV 14.6 40.0 Radio Mobile Internet 30.0 12.6 Internet 20.0 Newspaper 19.2 10.0 18.4 Magazine 0.0 3.3 10.8 Total Mobile Netizens Source: CMMS Winter 2012 17 MOBILE Although it is a cost-driven market, smartphones are still the core of mobile phone boom with advertisements strengthening their hidden potential 73% Smartphones made up 73% of all phones sold in These 213 million new devices will China in 2012 provide a more diversified mobile network and advertising medium Source: CNNIC Jan 2013, IDC 2012 Q4 18 MOBILE The importance of smartphones is influencing new behaviors: compared to 12% of time spent browsing the Internet, 88% of time is spent when using apps; this is the new sector for the majority of advertisements to develop Time spent using apps and browsing the Internet by Android and IOS system mobile users Time spent monthly (in billions of minutes) 60 Using apps 40 20 0 Browsing the Internet Source: Nielsen Smartphone Analytics 19 MOBILE Because over 50% of time spent on apps are concentrated on the top 20, it is very possible that the most popular apps will gain much more attention and demand than others Top ten 43% 11-20, 8% 21-30, 4% Remaining apps 39% 31-40, 3% 41-50.3% Source: Nielsen Smartphone Analytics 20 MOBILE The potential of opening a new mobile network depends on: Internet browsing App usage 100% 100% 83% use social networks 70% use search engines Reach Reach 48% use microblogging 32% watch videos 33% play games *Size of bubble indicates relative time spent 21 Sources: iResearch 2013; CNNIC Jan 2013; InMobi & Decision Fuel APAC Mobile Media Consumption 2012 MOBILE At the same time, mobile phones implement data caps Over 90% % of users browse less than Over 80% of users don't exceed their data 300M a month plans Wireless Internet Plans Data Limit Wireless Internet Plans Data usage Smart Mobile Netizens Non-Smart Mobile Netizens Smart Mobile Ne-zens Non-Smart 机 Mobile Ne-zens 7.1% Over 300M 1.5% Never beyond monthly traffic 52.6% 100M-300M limit 6.1% 19.1% 62.4% Seldom beyond the monthly 50M-100M 30.5% 19.3% 30.6% traffic limit 26.7% 20M-50M Often beyond the limit, by 32.1% 9.4% 54.7% just a small portion Below 20M 7.0% Often beyond the monthly 11.0% 7.5% None 4.8% limit, by a large portion 3.9% 7.3% 6.3% 0% 20% 40% 60% 0% 20% 40% 60% 80% Source: CNNIC Jan 2013 22 MOBILE Very few brands are concerned with the status of their mobile networks; the disapproval rate among mobile users for browsing the Internet are noticeably high Approval rates for Internet browsing on smartphones Don't know Completely Unsatisfied Unstatisfied Indifferent Satisfied Completely Satisfied 100% 80% 60% 40% 20% 0% China France Japan USA Source: Think With Google – Our Mobile Planet 2012 23 MOBILE Many websites still lack mobile versions Only 22% of fashion websites are optimized for mobile phones … Just 26% of websites use …52% of websites can't be used with mobile phones Source: L2 Digital IQ Index: Fashion Supplement 24 MOBILE Having an optimized mobile version may decrease a website's bounce rate Bounce rates for site with and without optimized mobile versions 60.00% 54.8% 50.00% 40.00% 30.00% 36.9% 20.00% 10.00% 0.00% Mobile Websites Desktop Websites Source: Google Analytics 2013 25 MOBILE HTML5 allows browsing of mobile websites to become more interactive, more powerful and more effective.
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