Beyond 1.3 Billion: Understanding China & Social Media
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1 Beyond 1.3 Billion: Understanding China & Social Media
2 China is a massive market for social and mobile. It has the most Internet users in the world, and the majority of them access the web through mobile. While most studies about China s Internet ecosystem only focus on the size of the market opportunity from an economic perspective, this report not only explores the immense scale of China s social and mobile market but also why it is culturally distinct, and how a more digital China is a core driver of the country s current business innovation.
3 China: A different type of social scale
4 China has the largest Internet population in the world There is a reason conversations about China s Internet industry typically start with its size: the numbers are staggering. Overall, the country boasts 1.3 billion people, 56 ethnic groups, and over 290 spoken languages. Think about it this way: the Super Bowl, the largest annual real-time marketing event in the United States, had million viewers this past February. It also happened to people have Internet access in China, making it the largest Internet population in the world, and almost twice as many people as the entire U.S. population. coincide with the Chinese New Year, which is the largest annual human migration on the planet. Over the holiday about 3.6 billion trips were taken in China, an entirely different order of magnitude in terms of consumer activity. Moreover, despite its size, there are still major opportunities for online usage growth. While 85 percent of Americans have Internet access, only 45.8 percent of China s Narrowing our focus to Internet users leaves a smaller population, but one that s hardly small compared to Internet usage in the United States or Europe. 618 million population is connected. However, the China Internet Network Information Center estimates that there will be over 800 million Internet users in China by the end of For marketers, the immensity of this scale changes everything.
5 A mobile-first Internet market The technology that catapulted social media to its central place within China s Internet landscape was mobile. As content marketers think critically about how to make inroads into the country s vast social media market, the conversation needs to begin with the nature of mobile web access. Across the globe more and more Internet users are accessing the web primarily through their mobile device. However, in China, an overwhelming majority already does. Of the 618 million Internet users there, a mobile device is the primary gateway to the web for 500 million of them. That s over 80 percent of Internet users. China is already the world s biggest consumer of smartphones. But the smartphone market in China is distinct from the United States. Major mobile device manufacturers like Apple and Samsung have both retail and manufacturing presences in China, but foreign brands remain behind domestic market leaders like Xiaomi, China s top selling smartphone brand. Founded in 2010, Xiaomi sells almost exclusively via e-commerce; the company only announced its first physical retail presence in Beijing in September Nonetheless, by December Xiaomi had overtaken Samsung and Apple in local market share. Mobile is the Route. What s the Destination? Most Chinese online destinations will be unfamiliar to Americans. Baidu, Alibaba and Tencent, which dominate search, e-commerce and social, respectively, have practically no presence in the United States. However, having been shaped by the unique culture and conditions of China, they are especially well suited to thrive there. Thrive might even be putting lightly: Alibaba is the world s leading e-commerce platform. Tencent has a larger market cap than traditional American tech giants like Intel, Cisco Systems and Hewlett-Packard.
6 Chinese social s Swiss-army knife approach
7 Each platform is a unique mixture Sina Weibo Wechat YY The China social media landscape comprises companies that structure themselves differently than those in the United States. Where as American companies like Twitter or Instagram hone in on a single format, Chinese social media platforms rarely focus on a singular form of functionality. The major categories for social in China are microblogging, messaging services, and video/gaming, but there is a lot of overlap between them. You might say Chinese social media platforms have a Swiss-army knife approach. An app originally intended for messaging might have gaming, music, mobile payment and sharing functionality as well. Each platform is a unique mixture. forum to discuss taboo topics like politics and controversial social issues. The format is similar to that of Twitter; users are limited to 140 characters per post. However, given the nature of the Chinese language characters signify an entire concept, not just a single letter that s actually far more content per-post than Twitter allows for. Sina Weibo When talking with our clients about Chinese social media, Weibo is often the first platform that gets mentioned. When many Americans use the term Weibo, they are referring to Sina Weibo. In reality, Weibo doesn t refer to a specific company. It is a type of microblogging platform; Sina Weibo, a private company that filed for an IPO on March 15th, is one of the major ones. The service became exceptionally popular in 2009 and 2010, when it emerged as an alternative from the state media as a source of news and information. It also became a popular But while microblogging may be the platforms oldest service, it is hardly the only one offered: Sina Weibo users can play games, listen to music and read the news as well. Brands are very active on Sina Weibo, which makes sense given that the platform has more than 280 million users. However, that s down 9 percent from the previous year. Sina Weibo lost 28 million users in just 12 months. Many of those users may have been reacting to changes to the platform, in particular the government-mandated requirement that users register with their real name. But they didn t leave the Internet entirely. Where did they go?
8 It s a little like a cross between Skype, Zynga and American Idol. Tomio Geron, Forbes The rise of Wechat WeChat dominates mobile messaging services in China. It occupies about 82 percent of market share for Chinese messaging services, and that market is not small. In fact, Mobile messaging apps have overtaken SMS to become the largest communication channel among Chinese citizens. YY: Beyond comparison While platforms like WeChat offer a broader array of services than most American-based mobile platforms, you can still draw parallels between it and similar services that are popular in the U.S. (For instance, WeChat most closely resembles WhatsApp.) Then there are platforms like China s YY, which utterly defy comparison. On Chinese New Year s Eve an estimated 61% more messages were sent via Chinese social giant Tencent s mobile messaging products than via SMS. Part of the appeal of messaging services like WeChat is that they offer more private forms of communication than services like Sina Weibo. In the words of Forbes s Tomio Geron, YY is something akin to WhatsApp meets Zynga meets American Idol. It started as a service for gamers to discuss strategy, but its real-time video capabilities caught on with general audiences, who use the service for everything from broadcasting karaoke sessions to hosting tutoring lessons. Your audience can reward users with virtual goods like emoji WeChat sends messages via Internet connections but, keeping in the spirit of Chinese social s Swiss-army knife approach, also lets users send voice messages, share roses and lollipops, which the performer can then redeem for real money. Some users earn the equivalent of tens of thousands of dollars in Yuan a month performing on YY. social moments, purchase virtual goods like stickers, and meet new people in a format similar to that of chat roullette. They recently rolled out a mobile payment option as well. Unlike mobile-focused American platforms, which The service, which of course includes a mobile app and a messaging component, is nothing like anything available in the United States. have increasingly focused their attention on providing and improving a single service, China s most popular mobile app is a veritable cornucopia of functionality.
9 One nation. Many cultures.
10 Tier 1 Beijing Tier 2 Qingdao Tier 3 Shenyang Geography & demographics China is an enormous market that is very active on social, but it is hardly one large, uniform opportunity. China and its population of 1.3 billion people don t even all speak the same language, much less share the same culture. In order to understand why the Chinese mobile and social market is so unique, you have to look at the distinct cultural underpinnings of the specific audiences that use social media there. Experiences and subsequently attitudes also change as you move between the generations and other socio-demographic divides, much like the ways Baby Boomers and up to six income-generating adults (maternal and paternal grandparents as well as their parents) to indulge their whims with since early childhood. members of Generation X have very different approaches to media and technology. Single men and women have a distinct set of attitudes and experiences because of the tremendous amount of pressure For example, consider the Fu Er Dai, which literally translates into Rich Second Generation. The Fu Er Dai they have to get married and the professional success they are expected to have established by the time they do so. is made up of individuals who were born in the 80s and 90s after China experienced a wave of reform and cultural opening. They haven t been weighed down by many of the trials and tribulations their parents and grandparents experienced. Most of them were born after the enactment of the One Child Policy, so they ve had the resources of It is not easy to be a young man in China today. In order to get married, you need to have a stable job as well asw own your own home and, preferably, a car. You can expect a prospective bride to question you in minute detail about your income and assets.
11 In 2015 Morgan Stanley, using research by McKinsey & Co., concluded that Chinese spending abroad would exceed rest of global luxury sales combined. Toursim, holidays and gifting Then there are audience groups like Chinese tourists, which are somewhat nebulous but still very impactful economically. In 2015 Morgan Stanley, using research by McKinsey & Co., concluded that Chinese spending abroad would exceed the rest of global luxury sales combined. It s an astounding barometer of the wealth being generated in China, but it also speaks to the particularity of certain Chinese cultural practices, like gifting. Giving gifts in China is extremely important, especially when traveling. When you travel abroad, you are expected to return with gifts for everyone you know: Your family, colleagues and clients. Social pressure was also the catalyst for digital phenomena like Singles Day, an annual online holiday. Celebrated on November 11th (11.11), it s basically the opposite of Valentine s Day. In a spirit of rebellion against the social pressure to get married and settle down, young people That cultural practice manifests itself technologically as well, through phenomena like virtual goods. Virtual goods, such as those in YY and WeChat, are largely based on the premise of and traditions surrounding celebrate being single and purchase things for themselves. On Singles Day 2013 $5.7 billion was spent on a single e-commerce platform, T-Mall. That s nearly 3 times the amount spent on all of Cyber Monday. gifting. For instance, WeChat s mobile payment scheme uses virtual red envelopes, which is based on the Chinese New Year tradition of giving others little red envelopes with money. The point is: The scale of China makes all of these different audiences seem immense, and they are. But as a marketer, if you want to capitalize on this opportunity, you have to understand the difference in their online habits.
12 An Immense Scale. A Unique Opportunity.
13 Photo credit: Understand the cultural values Knowing what we know now, what conclusions can we make about China and the future of the social and mobile market there? Simply put, because of the enormity of China and its unique sociopolitical conditions, we see technology and platforms emerging that are very different from those here in the United States. It s also clear that we re just beginning to feel the impact of China s web users. If, as predicted, China has 800 million Internet users by the end 2015, it seems inevitable that their technologies and ways of interacting online will begin to affect our own. And while the scale is immense, it s important to remember that all 800 million will not act in concert. In order to understand and capitalize upon the opportunities offered by such a large market, we have to look to the cultural values that drive and influence both online and offline behavior in China.
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