Mobile Internet Development Trends Report

Transcription

1 Mobile Internet Development Trends Report 2015 Spring Baidu Mobile Services Group & Baidu Business Analysis Dept.

2 Overview The Mobile Internet Development Trends Report is based on provided by Baidu Mobile Search, Baidu Mobile Assistant, Baidu Mobile and other related data mining. It provides data- based insight into major trends of the mobile Internet in China. The Report consists of two parts: a review of the Mobile Internet market in 2014, and insight into behavior of people born aper 2000 the Post- Millennials Part I: Review of the Mobile Internet Market in The China smartphone market and compe@@on among manufacturers 2. The Return of the King: leadership in Chinese mobile search 3. The old structure of BAT and the new bawlefield Part II: Insight into the Behavior of Post- Millennials Related to Mobile Internet Services 4. Behaviors of exis@ng and Post- Millennial mobile Internet users 5. Ten characteris@cs of Post- Millennial Internet users

3 Review of the Mobile Internet Market in 2014 Part I 1. The Chinese smartphone market and compeggon among manufacturers 2. The Return of the King: Leadership in Chinese Mobile Search 3. The old structure of BAT and the new bamlefield

4 1. The Chinese smartphone market and compeggon among manufacturers Smartphone market CompeGGve landscape for manufacturers Key Points > 1. Smartphone market : Growth of the smartphone market slowed conspicuously in The benefits from the growing ac@ve user base are expected to end in Smartphone user scale and usage ac@vity far outweigh that of tablets. Tablet devices are mainly used for entertainment. 2. CompeGGon among manufacturers: In 2014, Apple won over a number of high- end Android users and grew its market share with the launch of the large- screen iphone 6 In 2014, domes@c Android manufacturers showed robust growth, while the market growth of interna@onal smartphone manufacturers such as Samsung has been declining.

5 1.1 The smartphone market* slowed in Benefits from the growing acgve user base are expected to end in Quarterly average growth rate in % Quarterly average growth rate in % Quarterly average growth rate in % Smartphones account for 91% of the total number of Internet- connected Phones* Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 Figure 1 : The scale of the smartphone market (number of daily ac@ve smartphones) (12Q2 14Q4, unit:0.1 billion) * Smartphone market refers to the number of daily ac@ve smartphones (connec@ng to the Internet at least once a day) out of the total smartphone market. * Internet- connected phones refers to daily ac@ve devices (connec@ng to the Internet at least once a day ) out of the total market of all types of mobile phones (including feature phones)

6 1.2 Smartphone user scale and usage acgvity far outweigh that of tablet users. Tablet devices are mainly used for entertainment. 9.3 Gmes higher Top 3 app types for tablet users Top 3 app types for smartphone users Smartphone volume 3.0 Gmes higher Usage rate of apps Figure 2: Comparison of smartphone volume and usage rate of apps between tablet and smartphone (14Q4, unit: 0.1 billion, %)

7 1.3 In 2014, the iphone 6 won over a number of high- end Android users, and domesgc Android manufacturers grew market share. 14Q3: The launch of large- screen iphone 6 increased Apple s market share iphone 13% 15% Samsung 39% 36% Android 79% 78% Other interna@onal manufacturers 6% Chinese manufacturers 52% 58% Windows Others 14Q2 14Q4 14Q2 14Q4 Figure 3: Device volume of different opera@ng systems in the total smartphone market (14Q2 vs 14Q4) Figure 4: Market share of Android manufacturers in the total smartphone market (14Q2 vs 14Q4)

8 2. Leadership in Chinese mobile search Search s importance as a gateway Search traffic trends Key Points > 1. Search s importance as a gateway: Mobile search apps are the second most widely used apps aper social messaging apps. Mobile and PC search developed along similar lines but mobile has grown faster. Demand for mobile search is robust, with the average number of searches per user steadily increasing. 2. Search traffic trends: Baidu has a nearly 80% traffic market share in mobile search, covering 90% of total mobile users. Baidu mobile traffic has surpassed the PC traffic even as PC traffic has increased. Baidu embraces a new mobile age.

9 2.1 Mobile search apps are the second most widely used apps a\er social messaging. Social Search Entertainment Browser Games messaging Online Video Online music Online shopping App store News Reading Online Map Life payment service Cloud storage Figure 5: DAU of apps by type (14Q4, unit: 0.1 billion)

10 2.2 Mobile and PC search developed along similar lines but mobile has grown faster. 73% 80% 87% 74% 86% 93% Number of PC Search users Number of PC Internet users Number of mobile search users Number of mobile Internet users Figure 6: PC search users/percentage of total PC Internet users ( , unit: 0.1 billion) Figure 7 : Mobile search users/percentage of total mobile Internet users ( , unit: 0.1 billion)

11 2.3 Demand for mobile search is robust, with the average number of searches per user growing steadily. Over the last 3 years, the number of mobile searches per user per day has increased by 47% 12H1 12H2 13H1 13H2 14H1 14H2 Figure 8: Mobile searches per user per day on Baidu Search (12H1 14H2)

12 2.4 Baidu has a nearly 80% traffic market share in mobile search, covering 90% of total mobile users. Baidu s market share has increased by 14 percentage points over the last two years. Have not used Baidu Search 10% Baidu 90% Others Have used Baidu Search Figure 9: Baidu Mobile Search market share ( ) Figure 10: Percentage of mobile users who have/ have not used Baidu Mobile Search (14Q4)

13 2.5 Mobile traffic surpassed PC traffic: Baidu embraces a new Mobile Age 100% Percentage of PC traffic 80% 60% 40% Percentage of mobile traffic 20% 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 Figure 11: Baidu PC and mobile search traffic composi@on (13Q1-14Q4, unit: %)

14 Key Points > 3. The old structure of BAT and the new bamlefield Old structure New bamlefield 1. Old structure: The Top 3 apps take 70% of user market share in most ver@cals. 17 out of the top 20 mobile apps are developed by BAT. Baidu, Alibaba and Tencent are showing an even stronger presence in mobile than they did in PC. BAT hold an even stronger presence in mobile than PC, taking 60% spent on mobile devices. 2. New bamlefield: BAT have started a new bawle with their super plamorm apps, aiming to connect people with services. BAT s super plamorm apps cover most high- frequency lifestyle services. Users prefer using a super plamorm app to look for services, rather than installing individual apps that offer a singular service. Baidu is well- posi@oned in lifestyle services, connec@ng people with offline services.

15 3.1 The top 3 apps take 70% of user market share in most vergcals. Map naviga@on Social messaging Search Online shopping News APP store Online payment Cloud storage Browser Online video Life service Reading Games <50% >70% Total shares of top 3 apps Others Figure 12: User market share of the top 3 apps in each ver@cal (14Q4, unit: %)

16 3.2 The rise and fall of apps in 2014 Fastest Growing TOP 5 Apps WiFi is a daily life necessity. I am proud that I am free. Wanna go home for CNY? Smart train Gcket Wi- Fi Master Key MYOTee This is a fast changing age. No comments, you know One microblog is enough. Most quickly declining TOP 5 Apps Shoot, shoot, shoot, I can t stop. Chubao phone Tencent microblog Wechat bullied me. Big boss! Kuaishou Line I am not an App store. Super Curriculum Wandoujia Figure 13 The Top 5 fastest growing and the most quickly declining apps in 2014 (by DAU)

17 out of the top 20 mobile apps are developed by BAT. Baidu, Alibaba and Tencent have a stronger presence in mobile than PC. 13 BAT 17 7 Others 3 Mobile PC Figure 14: Top 20 mobile apps and PC websites (by number of users) (14Q4) * BAT refers to three Internet companies in China Baidu, Alibaba, Tencent.

18 3.4 BAT hold an even stronger presence in mobile than PC, taking 60% of Gme spent on mobile devices. BAT BAT Others Others 13Q4 14Q4 PC Mobile Figure15: spent on BAT mobile products (13Q4 vs 14Q4) Figure 16 spent on BAT PC/mobile products (14Q4)

19 3.5 A\er a round of user acquisigon compeggon, BAT accelerated monegzing their mobile business and started looking for new market opportuniges. BAT 19% 23% Mobile revenue 36% 29% 23% Others 81% 77% PC revenue 64% 71% 77% Total mobile Internet revenue (China) Total Internet revenue(china) Figure 17: BAT revenue shares comparison (14Q4) Baidu Ali Tencent Figure 18: BAT mobile revenue contribu@on (14Q3) * Sources : Baidu, Alibaba, and Tencent financial reports

20 3.6 The next bamlefield: BAT super plakorm apps. The three companies are striving to connect people with offline services. Mobile Baidu Taobao WeChat

21 3.7 All high- frequency life services have been covered by BAT super plakorm apps. 21 % Hotel booking Tickets Job- booking Hospital Group purchase Taxi- hailing Food delivery Beauty & Housekeeping Car rental Highest demand services 移 动 互 联 网 发 展 趋 势 报 告 2015 贺 岁 版 Figure 19: Penetra@on* and frequency* of use of life services provided by mobile apps (14Q4) Frequency of use ( /month) PenetraGon refers to the percentage of mobile Internet users who have used a par@cular service. Frequency of use is how frequent a user uses a par@cular service.

22 3.8 Users are more open to consume online on mobile devices than on PCs, pargcularly for life services. 30 Gmes higher 2.4 Gmes higher 1.1 Gmes higher 1.5 Gmes higher PC Mobile Have used before 78% 65% Haven t used before 22% 35% Music Games Reading Life service PC Mobile Figure 20: Openness to pay on PC vs. mobile (14Q4) Figure 21: Percentage of users who have/have not used life services on PC/mobile end (14Q4)

23 3.9 Users are more willing to search on BAT super plakorm apps for different life services, rather than installing individual apps that provide a singular service. Super plamorm apps Individual apps Occupy too much storage 34% Services provided are limited Demand is weak 29% Average number of app ac@va@ons per person Reten@on rate Online payment is unsafe. Figure 22: Super plamorm apps vs. Individual apps (14Q4) Figure 23: Why users choose super plamorm apps over individual apps (14Q4)

24 3.10 Baidu is well- posigoned in lifestyle services, connecgng people with offline services. Group buy Mobile Baidu & Baidu Connect Users demands for various life services Food delivery Movie Gckets Taxi- hailing Hotel booking Scenic spot Gckets Flight Gckets Car rengng Show Gckets MulGple life service Clients Baidu s life service resources Merchants Third- party plakorms Value- added service providers...

25 3.11 Baidu Connect has become a popular service among tourists, who can buy Gckets to scenic spots by and the name of a desgnagon into Mobile Baidu search app.

26 26 Part II Chinese Post- Millennial Mobile Behavior 4. Set behaviors of exisgng users and emergence of Post- Millennials 5. User behavior of Post- Millennials 移 动 互 联 网 发 展 趋 势 报 告 2015 贺 岁 版

27 4. Set behaviors of exisgng users and emergence of Post- Millennials Set behaviors of exisgng users DrasGc change in user base structure Key Points> 1. ExisGng users behaviors are set: Replacing old phones with new ones was the driving factor of sales in smartphone. New user purchases only account for 30% of the total sales of smartphones. No significant differences observed in of users before and aper their phone replacement which means their behavior is approaching stasis. 2. DrasGc change in the structure of new smartphone user base: New user base structure is different, with elderly and young users growing faster. Users born aper 2000 are much more than those born in the 1950s. The Post- Millennials will become the major force in the future mobile Internet.

28 4.1 Replacing old phones with new ones was the major factor driving smartphone sales in New user purchases only account for 30% of the total sales. New purchase 55% 48% 42% 31% Replacement 45% 52% 58% 69% 13H1 13H2 14H1 14H2 Figure 24: New purchases vs. old phone replacement in China, 2014 (13H1 14H2)

29 4.2 No significant difference observed in acgviges of exisgng users before and a\er phone replacement: behavior is approaching stasis. 154 min/day 155 min/day Newly installed apps 22% 78% Before replacement APer replacement Apps used on old phones Figure 25: spent on mobile devices before and aper phone replacement (14Q4 ) Figure 26: Installa@on of apps before and aper phone replacement (14Q4) *The Gme that users spend on mobile devices refers to the that the smartphone users spend on all kinds of apps in a day, excluding on text messages and phone calls.

30 4.3 New user base structure is different, with elderly and young users growing faster. Post- Millennials 18% 13% Post- Millennials are mostly children age 6 to 15. They are students from Grade 1 to Grade 9, with an average age of 12. The rest 67% 79% Born before 1950s 15% 8% New users Exis@ng users Figure 27: Age groups of smartphone users (14Q4) * Post- Millennial users refer to children under 14 years old, while users born before 1950s are people beyond 65 years old.

31 4.4 Users born a\er 2000 are much more acgve than those born before The post- 2000s will become the main force in the future mobile Internet. 1.2 Gmes higher 2.7 Gmes higher Born before 1950 Post- Millennials Figure 28: spent on smartphones (14Q4) Born before 1950 Post- Millennials Figure 29: Average number of app downloads (14Q4)

32 5. CharacterisGcs of the Post- Millennials 10 behavioral characterisgcs 4 development trends 1. CharacterisGcs of users born a\er 2000 Key Points> They are not the decision makers: Post- Millennials pay awen@on to fashionable, emerging brands, but tend to make similar purchase choices as other users parents are buying or giving second- hand phones. MulGple devices: Percentage of users with both smartphones and tablets among Post- Millennials is higher than average. Trying new things: Post- Millennials are more willing to try new and long- tail apps. Work & entertainment: Apart from educa@on apps, Post- Millennials show strong interest in games, music apps and app stores. Younger game fans: Post- Millennials prefer RPG and EDU games while show liwle interest in board games. Night owls: They spend on mobile devices at night hours due to school hours. Weekend effect: They spend on entertainment during weekends than on weekdays. Pre- exam effect: Before major exams, Post- Millennials tend to remove social and entertainment apps from their phones. Search pioneers: They are more interested in online search and they are the major users of voice and visual search. Mobile lovers: Mobile search has become an essen@al part in the life for the Post- Millennials. 2. Development trends of mobile Internet driven by Post- Millennials: MulG- device and cross- device more common More products and brands that appeal to the younger generagon Seasonality (weekends, pre and post- exams, holidays) prominent Voice and visual search becoming mainstream

33 5.1 Not decision makers: Post- Millennials pay amengon to fashionable and new brands, but tend to make similar choices to regular users when purchasing a mobile phone. Most Post- Millennials have no say in purchase decisions. Their parents buy them phones or give them hand- me- downs. iphone 34% MI 20% MEIZU Samsung 11% 8% Huawei 4% Others 23% iphone Samsung MI Huawei Lenovo Others 11% 32% 10% 8% 7% 32% iphone Samsung MI Huawei Lenovo Others 15% 34% 9% 8% 5% 29% Brands that Post- Millennials are interested in Brands that they use Figure 30: Top 5 Smartphone brands that Post- Millennials favor and actually buy (14Q4) Smartphone market

34 5.2 MulGple devices: percentage of users having both smartphones and tablets among Post- Millenniails is higher than average. 1.7 Gmes higher Video 19% 14% Games 17% 12% Others 64% 74% All Post- Millenniails Tablet Smartphone Figure 31: of Post- Millennials who have tablets (14Q4) Figure 32: Time that Post- Millennials spend on tablets and smartphones (14Q4)

35 5.3 Trying new things: Post- Millennials more willing to try new and long- tail apps. Top 1000 apps* Other apps* Post- Millennials demand for download unpopular apps is 1.3 Gmes stronger than other users. Post- Millenniails The whole market Figure 33: apps that smartphone users download (14Q4) Top 1000 APPs: the top 1000 Apps installed in Andriod devices; other Apps, besides the top 1000.

36 5.4 Work & Entertainment: Besides educagon app, Post- Millennials show great interest in games, music apps and app stores. Usage rate Work & study Average usage rate Online video Security Online shopping App store Cloud storage News Reading Entertainment Online music Games Social chat Life service Map & Online payment spent on Apps Time spent On apps Figure 34: Post- Millennial use rate and and average

37 5.5 Post- Millennials prefer RPG and EDU games while shows limle interest in board games. Puzzle games and games 14% 11% Role playing 6% 3% Board games EDU games Others Post- Millennials overall market Figure 35: Types of apps that smartphone users download(14q4)

38 5.6 Post- Millennials spend more Gme on mobile devices at night due to school hours. Sleeping Gewng up & on the way to school At class Midday rest At class Homework & entertainment Sleeping Post- Millennials The whole market Figure 36: Post- Millennial mobile Internet workdays (14Q4)

39 5.7 They spend more Gme on entertainment during the weekends. 168 min/day 135min/day Video 15% Games 14% 11% Others Weekend Workday Weekend Workday Figure 37: Time spent by Post- Millennials on mobile Internet on weekends and on workdays (14Q4) Figure 38: Time spent on different apps at weekends and on workdays (14Q4)

40 5.8 Before major exams, they tend to remove a many social and entertainment apps from their phones. +42% +27% +17% Post- Millennials tend to remove apps before exams and reinstall them a\er exams. 57% Social/ messaging Reading Games The whole market Post- Millenniails Figure 39: Top 3 app types removed before exams Figure 40: 57% of apps removed before exams are reinstalled one week aper the exams

41 5.9 Post- Millennials are more interested in online searches, and are the major users of voice and visual search. 1.3 Gmes higher Post- Millennials account for 17% of the total mobile online search users, but account for 34% of total voice and visual search queries. 17% 34% Post- Millenniails 83% 66% Others All users Post- Millennials User structure of mobile search User structure of voice and visual search queries Figure 41: Average searches per day (14Q4) Figure 42: Post- Millennial users of Baidu voice and visual search (14Q4)

42 5.10 Mobile search has become an essengal part of life for Post- Millennials. Books & documents 3% 3% & training Movies & f(x)=a- 2/2 x 1 Solve for x One Piece My Li9le Pony 7% Games 67% 5% Q&A about life and love Will a girl wearing glasses turn ugly when she grows up? All users 48% Post- Millenniails Others Why do I have dark circles under my eyes? I am only 14. Figure 43: Mobile searches performed by Post- Millenniails (14Q4)

43 Trend: Post- Millennials, as the majority of mobile Internet users in the future, will shape the development trends of the mobile Internet. I. MulG- device and cross- device The Post- Millenniails, born in the mobile era, are used to switching from smartphone to tablet and to PC. Their demand for trans- device usage is very strong. III. Seasonality With the of Post- Millennial users increasing, the overall mobile Internet development is seeing more seasonality: in different seasons, e.g. on weekends/before & aper exams/ summer & winter breaks. II. Products and brands catering to the younger generagon The younger is a major target when a smartphone brand or an app wants to acquire new users. The young are always more willing to embrace new things. IV. Voice and visual search dominates Post- Millennials exhibit a stronger desire to use voice and visual search. In just a few years, voice and visual will replace text search to become the mainstream means of online search for the Post- Millenniails.

44 Appendix: Sources of the AnalyGcal Data Time: Data: Baidu Mobile Search(hWp://m.baidu.com)Baidu Mobile Assistant(hWp://as.baidu.com and client products, Baidu Mobile related user research and data mining; StaGsGcs: Source of the data used in this report: Analysis of results pages produced by Baidu Mobile Search. Baidu Mobile Search is an important gateway from which mobile users get access to Internet resources. It has more than 100 million visitors per day. Analysis of the of apps launched or jointly produced by Baidu Mobile Assistant Analysis of apps and devices powered by Baidu Mobile At present, Baidu covers more than 100 million mobile devices. Online and offline research and analysis on users conducted by Baidu Business Analysis Dept. Graphs & Charts: The double slash sign in some of the column charts is designed to shorten the length of high columns and creates a bewer reading experience.

45 Disclaimer The report is jointly produced by Baidu Mobile Service Group and Baidu Business Analysis Dept. herein is for references only. Based on the provided by Baidu Mobile Search, Baidu Mobile Assistant, and Baidu Mobile other related data mining as well as data from the research and analysis on users, the report is designed to reflect the general development trend of mobile Internet in China. We do not guarantee 100% accuracy and completeness of the data in the report. The report shall not be used as the basis of investment decisions, nor should it be regarded as obligatory or a legal basis or evidence, no mawer explicit or implicit. Baidu Mobile Cloud Business Dept. will supplement, correct and revise relevant informa@on at a regular basis, but we do not guarantee a prompt release of the informa@on updates. Baidu disclaims any responsibility for direct/indirect investment profit and loss resulted from the informa@on herein. Copyright therein is reserved by Baidu Mobile Service Group. No further redistribu@on is permiwed without a wriwen permission from Baidu. If quoted and republished, sources of the informa@on shall be indicated as Baidu Mobile Service Group. Quota@ons, omissions or revisions that are inconsistent with the views herein shall not be permiwed. The power of interpreta@on and revision of the disclaimer shall be vested in Baidu Mobile Service Group. For more informa@on about mobile Internet, please visit hwp://developer.baidu.com/. Baidu Mobile Service Group & Baidu Business Analysis Dep. Address: 10 Shangdi 10 th St., Haidian District, Beijing Postal code: