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2015 DIGITAL STATSHOT FOR CHINA: THE STATE OF DIGITAL, SOCIAL MEDIA, MOBILE AND eCOMMERCE

The latest report in our series of studies into Digital, Social & Mobile use around the world shows that the pace of digital adoption in China shows few signs of slowing.

You can read the full report in the SlideShare embed above (or download it here), but numbers don’t mean much on their own, so we’ll use this post to dig into the significance of the data and their associated trends for marketers.

China Digital, Social and Mobile By The Numbers

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To get us started though, here are the key data headlines:

• Internet Users: 668 million, a 6% year-on-year increase
• Social Media Users: 659 million – more than the USA and Europe combined
• Unique Mobile Users: 675 million, responsible for 1.3 billion mobile subscriptions
• Mobile Internet Users: 594 million, accounting for 89% of all China’s internet users
• Mobile Social Media Users: 574 million, up 15 million since this time last year

The year-on-year growth rates tell interesting stories too (note that the mobile figures in this slide represent the growth in mobile subscriptions, not unique users):

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We’ll examine each of these in detail in the sections below.

Internet in China

Roughly 100,000 people in China started using the internet every day over the past year – that’s more than one every second.

Much of this growth is being driven by improved mobile access, with close to 90% of the country’s netizens using mobile devices to access the internet. It’s worth noting that this is often in addition to PC-based usage too, but an increasing number of the country’s internet users are mobile-only, especially in rural areas.

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When it comes to the total volume of web traffic, PC-based access still dominates, with 56% of the web pages served to China’s netizens in the past month going to laptop or desktop computers. However, this figure is down 29% year-on-year, while the number of web page requests from mobile devices has jumped 136% to 42%.

These trends suggest that mobile usage will account for more than half of all China’s web activity by early 2016.

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Despite mobile’s promise of ubiquitous internet access, however, internet usage still isn’t evenly distributed in China, and a marked difference remains between urban and rural usage rates. Nearly two-thirds of China’s urban population now uses the internet every month, but barely 3 in 10 of China’s rural citizens are online:

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The good news is that connection speeds are up considerably on last year, with the average fixed-connection access speed up 17% year-on-year according to Akamai. It’s worth noting that the average mobile connection speed is considerably higher than that of fixed connections though, with the average connection in China now considered ‘broadband’ (i.e. 4Mbps or above).

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Social Media in China

The overall number of social media users in China grew more slowly than we expected over the past year, but this is more likely due to a change in behaviour, rather than a waning of interest in social media. 

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It’s also worth noting that social media usage in China is already at a very high level, with the numbers suggesting that 99% of China’s internet community uses social media of some description.

The numbers for individual platforms tell the more interesting story though. QQ, Tencent’s ever-popular instant messaging service, still claims the country’s top position in terms of monthly active users (MAUs), and despite the vast majority of its users residing in China, it also claims the second-place spot in the worldwide rankings behind Facebook (click here to read more about the global picture).

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It’s worth noting that more people sign in to QQ via mobile devices each month than sign in to WeChat, but WeChat offers more varied services and functionality for both users and marketers.

User numbers suggest that QZone still dominates when it comes to traditional ‘social networking’, but WeChat (or Weixin, as it’s know in China) is quickly catching up, and is the platform that most users claim to use on a regular basis (note the difference between ‘use’ and ‘sign in’, the latter being the metric many of the platforms use to measure ‘active’ users).

For those who are still relatively unfamiliar with Chinese social media, Baidu Tieba may be a new discovery. Tieba, or “Post Bar” as the platform calls itself in its English literature, is a community that has grown up around specific areas of user interest related to the searches that people conduct on Baidu, China’s largest search engine.

Meanwhile, readers of our previous China reports (2013, 2014) will notice the absence of Tencent Weibo in this ranking. Tencent stopped publishing monthly active user figures for Tencent Weibo a number of months ago, and we have interpreted this to mean that the company has de-prioritised the platform in favour of its three larger ‘products’, QQ, Qzone and WeChat. Tencent Weibo appears to remain popular with many users though, with 38% of China’s internet users claiming to have used the platform in the past month (see below).

Research from GlobalWebIndex suggests that more than 6 in 10 internet users in China used WeChat in the past month. Sina Weibo comes in second, with 54% of survey respondents claiming to have used the service in the past 30 days.

It’s interesting to note that Facebook, Google+ and Twitter all appear in this list too; they may be officially ‘blocked’ by the Great Firewall, but GlobalWebIndex’s research suggest that a considerable number of China’s netizens are getting round these blocks to access non-Chinese social platforms.

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87% of China’s social media users now access via mobile devices at some point each month, with platforms like WeChat helping to drive overall numbers up 77 million over the past 12 months – a year-on-year increase of 15% that equates to more than 200,000 new users every day, or almost 2.5 new users every second.

At 1 hour and 43 minutes per day, social media accounts for just under half of all the time that people spend online in China. The country’s social media users spend 23% longer using social media than they do watching TV each day, although it’s worth noting that much of this time overlaps, with many TV viewers engaging in ‘second-screen’ social media use at the same time.

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It’s worth noting that use of tablets appears to be down slightly year-on-year though, with 22% fewer web page requests coming from tablet devices in the past month compared to this time one month ago.

Mobile in China

With 675 million unique subscribers in China, almost half the country’s population now owns a mobile phone, and we fully expect to see the country pass this milestone before the end of 2015.

The number of mobile subscriptions in China rose significantly in 2014 too, with three new subscribers every second contributing to annual growth of 94 million – an 8% year-on-year increase.

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The number of mobile subscriptions in China is now very close to the number of people living in the country, which suggest that the average user still maintains close to 2 active connections.

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However, we expect that this ratio will reduce over the coming months as more and more people upgrade from feature phones to smartphones; the main reason why individuals operate more than one mobile contract is to benefit from intra-network deals, but data-powered communications such as chat apps and VOIP are more efficient and effective ways of achieving the same benefits.

Smartphones are clearly the must-have devices in China today, accounting for 90% of new handset sales. They already account for just less than two-thirds of all handsets in active use, and we expect their overall share to increase steadily over the coming months as more people renew their devices.

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When it comes to internet-powered activities on mobile devices, Chinese netizens appear to be particularly interested in checking the weather. 

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China’s mobile users also appear to have embraced m-commerce, with reports suggesting that 20% of the country’s population have made a recent online purchase via their mobile device.

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E-Commerce in China

E-commerce more generally appears to be thriving in China, with almost one in three internet users buying online each month. 

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The country’s consumer e-commerce market was worth more than a quarter of a trillion US dollars in the six months to June 2015, with the year’s biggest shopping event – Singles Day – still to come. Sales on Alibaba’s various sites exceeded US$9 billion in just one day last November, and there’s every chance that number will pass $10 billion on 11th November this year.

Conclusions

So what does all this mean for brands? Here are our three key tips, designed specifically for non-Chinese marketers looking to make sense of the world’s largest consumer market:

China’s Different: it’s obvious that the platforms that dominate in China are markedly different to those that marketers are familiar with elsewhere – even those in their Asian neighbours. However, it’s not just the platforms that are different; the ways that Chinese netizens use social channels is also markedly different, and marketers need to carefully adapt their approaches for China’s cultural and societal idiosyncrasies as much as for its technological differences. One size does not fit all when it comes to China, and marketers would do well to engage the expertise of a partner who understands the ‘how’ as well as the ‘what’.

1-to-1 Social: The numbers in this year’s report highlight the growing popularity of chat apps – a trend that we’ve seen elsewhere in the world too. The growing popularity of chat apps presents a new set of opportunities for marketers, as many of the conversations that take place on these platforms are more private in nature, taking place between individuals and small groups (versus the public environments that Western marketers will know from Facebook and Twitter). In order to take advantage of the ‘intimate’ nature of these one-to-one conversations, however, marketers will need to explore new approaches to social media and content marketing, ensuring that the tactics they employ make it easy for audiences to find and consume content on one platform (e.g. video-sharing services like Youku or Tudou), and then share that content proactively via chat apps. This will require greater emphasis on highly engaging content and organic sharing, rather than an approach that relies on paid media to push mediocre content to the masses.

Social Selling: China’s netizens are already very comfortable buying things online, whether that’s through their PCs or via their mobile devices. The next big opportunity for marketers is to understand how the dynamics of social referral work in China, and use that to move from social engagement to social conversion.

COMMENTARY:  If you have been looking for information on the state of China's growing digital, mobile, social media and e-commerce for 2015, this is a great source thanks to the nice guys at We Are Social. 

Courtesy of an article dated August 18, 2015 appearing in We Are Social

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ALIBABA IS THE WORLD'S LARGEST eCOMMERCE COMPANY, BUT DOES IT POSE A REAL THREAT TO AMAZON AND eBAY?

Founder and Executive Chairman of Alibaba Group 

Alibaba to invest more abroad as globalization becomes a top priority

Group Holding Ltd will invest heavily in existing and new ventures abroad, making its push beyond the China market a top priority, the Chinese e-commerce leader's new CEO, Daniel Zhang, said.

Alibaba Group CEO Daniel Zhang (Click Image To Enlarge)

Zhang's comments come at a time when Alibaba aims to maintain its rapid growth even as the prospect of e-commerce saturation at home looms over the company.

Zhang said in his first speech since taking up his new post this week, according to a report on Thursday on Alibaba's news and commentary website, Alizila.

"We must absolutely globalize,"

The vast bulk of Alibaba's revenue comes from its dominant domestic online marketplaces, but the company has been investing in a range of sectors abroad. Just this week it announced it would set up a cloud computing base in Dubai, and boosted its stake in U.S. e-retailer Zulily Inc.

Alibaba Group Holding Limited - Revenues by Segment - 2010 Through 2014 - Includes China vs International Revenues  - In Millions of Yuans - Statista (Click Image To Enlarge)

Zhang was quoted as saying.

"We will organize a global team and adopt global thinking to manage the business, and achieve the goal of 'global buy and global sell'." 

Alibaba, which handles more transactions on its platforms than Amazon.com Inc and eBay Inc combined, would continue to invest heavily in new and existing overseas operations, Zhang was quoted as saying. Those included AliExpress, a platform for overseas consumers to buy Chinese goods, and Tmall Global, a marketplace for overseas goods to be sold online in China.

For the quarter ending in December 2014, Alibaba achieved $127 billion in China retail gross merchandise value (GMV).  For calendar year 2014, Alibaba achieved $370 billion in China retail GMV. A key reason for the strong GMV growth is the continued growth in active buyers across its platforms—Taobao Marketplace and Tmall.com. The company explained that an active buyer is someone who came to its retail marketplaces to make at least one purchase during the period of measurement.

Alibaba Gross Merchandise Volume (GMV) - Taobao and Tmall - By Quarter in Billions of  Chinese Yuans - Q4 2012 through Q4 2014 (Click Image To Enlarge)

The GMV growth was also driven by category expansion. On November 11, 2014, the company’s Singles Day promotion generated GMV of $9.2 billion. This was an increase of 58% compared to the Singles Day in 2013. These transactions were settled through Alipay on its retail marketplaces within a 24-hour period.

Alibaba's online shopping gross merchandise volume (GMV) in millions of Chinese Yuan's from Q2 2012 through Q1 2015 (Click Image To Enlarge)

Zhang said if Alibaba does not globalize it won't be able to last 100 years - a goal set out by Executive Chairman Jack Ma.

But growth of Alibaba's international commerce business is lagging the pace of growth in China, even as the new CEO faces the prospect of slowing domestic growth as saturation among online shoppers threatens to hobble expansion.

In the three months ended March, Alibaba's revenue from China commerce grew 39 percent to $2.2 billion. International commerce grew 27 percent to $264 million and only accounted for 9 percent of revenue, compared to 11 percent in the same period a year earlier.

Alibaba says some of its larger overseas markets include Brazil and Russia. The company and its affiliates are also making overtures in India, where it is in talks with phone maker Micromax Informatics to buy a $1.2 billion stake, according to several people with direct knowledge of the matter.

For the United States, Alibaba is planning a major move to win business this year, by offering American retailers new ways to sell to China's vast and growing middle class.

Mobile commerce is driving an increasing share of Alibaba's business

Alibaba’s growth has been further boosted by an exponential increase in mobile users. China’s 600 million-plus Internet users are migrating to smartphones, setting off a race to capture this new market. Alibaba’s mobile GMV now represents over 51% of a staggering 289 million mobile active users.

Alibaba said it had 289 million mobile active users (MAUs) out of 350 million buyers at the end of Q1 2015.   Mobile users represented $49 billion or 51% of  total gross merchandise volume (GMV) on its Chinese retail platforms during Q1 2015, up from 42% in Q4 2014.  Mobile users also represented a whopping 40% of total ecommerce revenues for Q1 2015, up from 30% in Q4 2015.

Alibaba Active Buyers and Mobile Active Users by Quarter in Millions - Q1 2014 Through Q1 2015 (Click Image To Enlarge) 

Alibaba Total Mobile Active Users (MAUs) in Millions, Mobile Gross Merchance Volume (US$) and Mobile Revenues as a % of China Retail Rvenues (US$) for Q1 2015 (Click Image To Enlarge)

Alibaba Mobile GMV, Mobile Revenues and Revenue Contribution by Quarter - Q1 2013 Through Q1 2015 (Click Image To Enlarge)

Does Alibaba represent a serious competititve threat to Amazon and eBay?

Wether Alibaba represents a serious to U.S. ecommerce leaders Amazon and eBay depends on who you ask.  Let's look at the opinions of a few ecommerce experts.

Mike van Dulken, head of research at Accendo Markets, says Yes

In terms of sheer size, accounting for 80 per cent of all Chinese online shopping, with volume growth easily outstripping rival internet retailers thanks to 1 billion items on offer to 350 million buyers, and with 30 million shipments made per day, fast-growing behemoth Alibaba represents a genuine threat to the likes of Ebay and Amazon.

Jack Ma’s stateside charm offensive has provided key insight into the firm’s goals, with some impressive numbers, such as sales of a landmark $1 trillion by 2019, generated by a whopping 2 billion customers.  The founder has made it clear that the aim is to reduce reliance on China, increasing rest-of-world sales by a factor of 20.

This implies taking market share, which the promise of 72-hour worldwide shipping and attracting US businesses to its already highly-successful platform may well help deliver. Outside China, Alibaba is looking increasingly like the retail elephant in the internet chatroom. The competition better watch out.

Steve Mader, a vice president at Kantar Retail, says No

In the short term, Alibaba is not focused on entering the US or European retail markets to compete on Amazon and Ebay’s home turf. Its attention is connecting Chinese businesses to Chinese consumers, Chinese businesses to the world, and the world to Chinese businesses.

Ma’s goal is to remove a significant amount of friction from Chinese retail trade and have Alibaba positioned as the conduit the traffic flows through, generating a massive number of monetisation opportunities through media and marketing services, or payment programmes such as Alipay.

With Alibaba focusing on China, it offers global retailers the ability to learn and adapt. We’re already seeing this with Amazon’s moves in the UK to become more flexible in its distribution network by partnering with other retailers such as Smiths News, and Ebay becoming increasingly brand focused. In the longer term, however, the tech giants would be foolish to dismiss the threat of Alibaba.

COMMENTARY:   Based on Alibaba Group CEO Daniel Zhang goal to expand internationally by a "factor of 20," both Amazon and eBay should take this as a threat, but not an eminent one.  Alibaba Group faces several hurdles in order to successfully penetrate the U.S. market.

1)  U.S. buyers do not use escrow accounts to make online purchases like Alibaba Group uses to make sales.  We prefer to use credit and debit cards to make our purchases, expect a liberal merchandise return policy, and delivery of our purchases within 1 to 5 days.  I don't think Alibaba Group's business model translates well in the US market except for very expensive items like jewelry, art and collectables.

2) U.S. buyers are very loyal to both Amazon and eBay.  The seller reviews on eBay weed out crooked sellers.  Likewise, product reviews on Amazon are very useful in assisting buyers to make their purchasing decisions.  

3) U.S. buyers have the advantage of buying products from sellers located and shipping within the U.S.  Alibaba Group does not carry merchandise, but depends on millions of small sellers, to produce and ship the product directly to the customer.  Alibaba would have to open large distribution centers in the U.S. in order to meet the demands of U.S. customers for quick turnaround of their orders. This would require a huge investment in facilities and merchandise inventory to meet the demand of customers in the U.S. and Europe. 

4) Both eBay and Amazon have fond ways to weedout sellers of cheap knockoffs.  On the other hand, Alibaba Group has been criticized by the government for the large number of sellers selling knockoff products through their ecommerce platforms.  Alibaba Group has spent over $1 billion over the last two years to control the knockoff problem.

5) U.S. and European online buyers are much more sophisticated than Chinese consumers.  They are very leary of these small Chinese producers, the quality of the products they sell, and how to deal with merchandise returns.  This is a big reason why I believe that Alibaba Group will have to adopt a business model that is similar to Amazon and eBay in order to compete with those companies.

6) Alibaba Group does not have a well known brand name in the U.S.  This lack of brand awareness by U.S. consumers is a huge weakness.  This lack of a strong brand identity will hurt Alibaba with U.S. consumers who are used to buying from well established companies like eBay and Amazon.        

In spite of these weaknesses and disadvantages, Alibaba Group still represents a threat, probably within 5 to 10 years. Alibaba cannot just compete on the basis of price, it must compete on the basis of the four P's (price, product, promotion and place).    

Courtesy of an article dated June 11, 2015 appearing in CityAM, an article dated May 14, 2015 appearing in Reuters, an article dated January 29, 2015 appearing in The Wall Street Journal, an article dated March 23, 2015 appearing in Market Realist, an article dated March 23, 2015 appearing in Yahoo Finance, First Quarter 2015 Earnings Presentation for Alibaba Group, Full Year 2014 Earnings Statistics by Statista

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THE QUALITY OF LIFE AROUND THE WORLD IN ONE NEAT INFOGRAPHIC

Came upon this infographic designed by Movehub for Business Insider.  Its quite revealting.  The USA is not No 1 in quality of life.  We rank No 10.  Switzerland, Denmark, Germany, Finland and Sweden are the Top 5.  These are followed by Saudi Arabia, Oman, Australia, Norway and the USA.  Hope you find the information useful.  

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Courtesy of an article dated June 15, 2015 appearing in Business Insider

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SOCIAL MEDIA IN CHINA 2015, CHINESE SOCIAL MEDIA GROWTH DRIVERS, AND GOVERNMENT CENSORSHIP AND SURVEILLANCE

Social media in China is even more popular than social media in the United States, based on the population of those who use these services. It is now estimated there are 650,000,000 people who utilize popular social media websites throughout China.Setupablogtoday.com has developed an infograhpic that shows the popularity of social media in China, as well as a few predications for the future of social media in China.

The infograhpic looks into the user base of social sites, determining that more men than women utilize these services, and there is a fairly high percentage of people who do not utilize their true identity when using these sites. Perhaps most interestingly, the inforgraphic lays out the top 10 social media sites in China including Tencent QQ, QZone and Sina Weibo, which round out the top 3 networks people utilize.

Here is the full infographic to view:

COMMENTARY:   It has been over four years since I began blogging about China's growing social network landscape in a post dated January 17, 2011.  It was difficult finding reliable information about the number of social network users or China's social network stats.  Most of the social networks were Facebook and Twitter copycats.  All of them were privately-owned and did not publish their user stats.  None of China's social networks or microblogging sites had gone public yet.  Facebook did not go public until May 18, 2012.  Back then Qzone was the largest social network with an estimated 370-388 million users.  As of the start of this year, Qzone had a reported 755 million users.  Tencent QQ is now the largest messaging app in China with 830 million users.  This clearly beats out Facebook Messenger with 600 million active users and Whatsapp with 300 million active users as of Q1 2015.  

What's driving the social media revolution in China?

• Separation of families due to migration from rural to urban areas due to the availability of better paying jobs and greater opportunities.
• The availability of affordable broadband internet.
• An internet generation of young Chinese (under 30) without siblings, resulting from China's late 70's one-child policy.
• Underlying mistrust of government-controlled media. 

China's internet censorship and surveillance

In 2003, China's Ministry of Public Security began the "Golden Shield Project," an attempt to put controls over internet use in place and prevent the sharing of information that could threaten national security, disclose state secrets, or damage the government's reputation.   In reality, the Ministry of Public Security is the main instrument to achieve Internet censorship and surveillance in China.  The Golden Shield Project blocks potentially unfavorable incoming data from foreign countries.  

The "Great Firewall of China" a term coined by Wired Magazine in an article it published in 1997 to describe legislation and projects initiated by the Ministry of Public Security (which is controlled by the Chinese Community Part, or CCP) that attempt to regulate the internet in Mainland China.  It is the main instrument to achieve Internet censorship and surveillance of Internet users in China.  These CCP regulations include criminalizing certain online speech and activities, blocking from view selected websites, and filtering key words out of searches initiated from computers located in Mainland China.

The Ministry of Public Security through its Golden Shield Project has succeeded in blocking thousands of digital sites located outside of China including Facebook, Twitter, Google, to name a few.  If you would like to know if your favorite site is blocked in China, checkout GreatFire.org,  an online service that tracks websites blocked in China.

Courtesy of an article dated May 6, 2015 appearing in SocialBrandWatch

CHINA SURGES AHEAD OF THE U.S. IN APPLE APP STORE iOS DOWNLOADS FOR THE FIRST TIME

 

China has been #2 in iOS downloads for a while, but just last quarter, it took the top spot. In our recent Q1 2015 Market Index, we noted this landmark event. However, we feel the news is big enough to deserve its own report. This deep-dive investigates the numerous dynamics related to China’s rise to the top.

 

Just in time for GMIC Beijing (taking place April 28-30, 2015), we’re excited to announce our latest free report, China Surges Ahead of the United States in iOS App Store Downloads. Inside you can find the market forces, categories, apps and publishers that played a role in this major shift. And you can bet we’ll be on the expo floor at GMIC ready to answer your questions about how this can impact your mobile app business in this fast-growing country.

1. China Snags the Top Spot

China’s iOS Quarterly Downloads Grew 30% Between Q1 2014 and Q1 2015

Apple has been clear about China’s importance in its overall strategy. At various events, including its Q1 2015 earnings call and March 2015 "Spring Forward" event , the company has specifically noted China’s importance.

In terms of app downloads, China had been the iOS App Store’s second largest market behind the United States since Q1 2011. Four years later, China’s quarterly iOS downloads grew by approximately 30% year-over-year in Q1 2015, while remaining relatively flat in the United States. This allowed China to overtake the United States as the largest country in terms of quarterly iOS downloads.

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2. China Overtakes the United States in Downloads With Faster Growth in iOS Installed Base

China's move past the United States for iOS downloads in Q1 2015 was possible thanks to large growth in the adoption of iOS devices, rather than an increase in downloads per device.  According to IDC, the installed base for iPhone and iPad combined grew 40% in China during 2014, compared to 13% growth in the United States.

As we discussed in our Q1 2015 Market Index , the launch of the iPhone 6 and iPhone 6 Plus may have played an important role in the rise of iOS App Store downloads in China. These devices are significantly larger than previous versions and deliver increased screen size and battery life. This is particularly important in China, a mobile first country where smartphone adoption exceeds PC adoption and many consumers carry out more tasks on mobile devices rather than desktop devices. This leads to higher demand for large screen smartphones with longer battery life, even if portability is sacrificed.

Expanded distribution also played a role in the success of the iPhone 6 and iPhone 6 Plus.  A pple has invested heavily in growing its retail presence and, as of April 2015, mainland China has 19 Apple Stores across 10 cities, up from just 8 in only Beijing and Shanghai in October 2013. During its Q1 2015 earnings call, Apple said it is on track to reach 40 stores in Greater China by mid2016.
Moreover, the iPhone 6 launch was the first time that Apple released a new iPhone on all three of China’s major mobile carriers at the same time, increasing its distribution network by thousands of stores.

3. Entertainment, Photo & Video and Lifestyle Apps Rode the Wave

In China, Games continues to be the largest category on the iOS App Store by both downloads and revenue by a large margin. However, three other categories experienced even higher yearoveryear
absolute download gains in Q1 2015: Entertainment, Photo & Video and Lifestyle. This aligns with three of the most popular activities for Chinese consumers on their smartphones: enjoying entertaining apps, capturing memorable life moments and shopping.

Entertainment Apps Get a Boost From Increased Content

Some of the Entertainment category’s impressive growth can be attributed to the proactive content strategies of China’s key video streaming providers, including internet giants like Tencent ( Tencent Video ), Baidu ( iQIYI ) and Sohu ( Sohu TV ), as well as online video services like Youku Tudou ( Youku , Tudou ) and LeTV ( LeTV ). Over the past few years, these services evolved from YouTube like usergenerated content video platforms to Netflix like providers of professional shows. They have successfully attracted audiences from traditional broadcasting TVs by offering the content on omniplatforms including desktop, mobile, settop boxes and digital TV. They have also enticed users to their platforms by securing rights to a broad range of foreign and domestic premium content including drama series like House of Cards and The Wife’s Lies , hit TV shows like Voice of China and Happy Camp, recent movies like Interstellar and Gone With the Bullets and live broadcasting of premium sports like the English Premier League and the NBA, as well as making their own exclusive content. Mobile video streaming delivers significant value to consumers by enabling them to consume content anytime and anywhere on devices that are more affordable than TVs and PCs. Recognizing this huge opportunity, traditional TV networks in China like Hunan Broadcasting System have also joined the competition for mobile audiences by launching their own apps like ImgoTV. 

iOS 8’s ‘App Extensions’ Help Photo & Video Apps Go Viral

Photo & Video’s explosive growth in Q1 2015 was helped by Apple’s own iMovie , which it has
offered for free since September 2014. The category also received a boost from newly released camera and photo editing apps like FotoPlace and Pitu . The upward trajectories of these new apps have outpaced previous leaders in this category. This is partially due to iOS 8’s new App Extensions feature which allows onetap photo and video sharing from camera and photo editing apps to any social platform. In previous iOS versions, consumers could only do one click sharing with a few social networks selected by Apple. The launch of iOS 8 in September 2014 extended this functionality to WeChat,  China’s largest social network, and the seamless sharing experience helped new camera and photo editing apps go viral.

MCommerce Hits New Heights

In the Lifestyle category, mcommerce apps — which include apps for online shopping, shopping guides, service ordering, daily deals, local business reviews and classifieds — experienced massive growth in 2014. Among the China iOS App Store’s top 20 Lifestyle apps by downloads, 17 are mcommercerelated.  From Q1 2014 to Q1 2015, total downloads of these 17 apps grew by 85%, showing that mcommerce is booming from an app perspective.  According to Alipay, China’s largest online payment platform and the backbone of ecommerce in China, mobile payments accounted for 54% of all of its transactions in the first 10 months of 2014, up from 22% for all of 2013. It will be interesting to see how mcommerce further develops as the potential of one billion customers is unleashed.

4. iOS’ Bright Future in China

Download Growth Paves the Way for Monetization

In mature markets, such as United States and Japan, we have seen explosive download growth lay the foundation for significant revenue growth that follows. We expect to see this repeated in China in the near future. Furthermore, the iOS App Store's potential size in China may be even higher than it initially appears since downloads per active iOS device is significantly higher in China than in the United States.

As we mentioned in our 2014 Retrospective , China is appealing for its monetization potential as well as its expansive smartphone user base. In Q1 2015, it was the #3 country (behind only the United States and Japan) by total quarterly revenue on the iOS App Store. From Q1 2014 to Q1 2015, revenue in China grew 90% compared to roughly 30% in the United States and approximately 50% in Japan. Although the United States leads China in terms of revenue per iOS device, China grew even more quickly to narrow that gap from Q1 2014 to Q1 2015.

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One category that demonstrates the future revenue potential for iOS in China is the Entertainment category. In Q1 2015, it experienced 385% year-over-year revenue growth.  Video streaming apps aided this revenue leap to a major extent. All the video apps mentioned in the previous section were among the top 30 apps outside of games by revenue in the China iOS App Store, 3 of them among top 5. By steadily adding new premium content to their easy to access libraries, Chinese video streaming services have increased their perceived value and helped expand Chinese consumers’ willingness to pay for content, even on a smaller screen. In addition to advertising, these services are gradually increasing their monetization via premium memberships, program subscriptions and pay-per-view models, which are partially collected through the app store channels.

5. Recap

The iOS App Store has experienced phenomenal growth in China. In Q1 2015, quarterly iOS
app downloads increased approximately 30% year-over-year resulting in China surpassing
United States to become the largest market by iOS app downloads. Some key insights related
to this impressive growth:

• IDC figures show that the installed base for iOS devices in China experienced higher growth than that in the United States over the span of 2014. This was the key driver that helped China surpass the United States by iOS App Store downloads.
• The launch of the iPhone 6 and iPhone 6 Plus may have played an important role aswell. In addition to addressing China’s particularly high demand for smartphones with larger screens, it also benefitted from Apple’s expanded retail presence and broader carrier support.
• The Entertainment, Photo & Video and Lifestyle categories especially benefitted from the increase in iOS App Store downloads in China. Entertainment was helped by key video streaming providers’ content strategies, Photo & Video was assisted by enhanced sharing capabilities from iOS 8’s new App Extensions feature and Lifestyle was aided by mcommerce and related apps.

The continued growth of iOS device installed base and iOS App Store downloads in China may be laying the the foundation for significant revenue opportunities in the near future. We are excited to watch the mobile app market develop in this key market for Apple.

COMMENTARY:   As reported in an article dated April 27, 2015 appearing in TechCrunch, Apple is tearing it up in China. During its second quarter 2015, the company saw 71 percent revenue growth in the locale, and the company is widely thought to have sold more iPhones there than in the United States.

Notably, the company’s Chinese revenue came in second place to Europe’s during the first quarter, losing $17.2 billion to $16.1 billion. In the most recent quarter, the second of 2015, Apple’s Chinese revenue grew to $16.8 billion, while its European top line, measured on a sequential-quarter basis for now, fell to $12.2 billion. The company’s European revenue grew on a yearly basis, further underscoring how important China is to Apple.

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The technology company posted revenue gains in the Americas, Europe, Greater China and the ‘rest of Asia Pacific.’ Japan declined for Apple, something that should not surprise after Microsoft unloaded on the country as a slipping zone of demand. 

The Apple Watch, with its high-end options, has been discussed as a potential play for the Chinese luxury market. That aside, it seems that the company has no issues selling its products in the location. As such, Watch aside, it seems that Apple has a winning formula in place.

Courtesy of an article dated April 28, 2015 appearing in App Annie and an article dated April 27, 2015 appearing in TechCrunch

FACEBOOK GROWS TO 368 MILLION ACTIVE USERS IN ASIA DURING Q4 2013, BUT ASIA WAS ONLY 13.19% OF TOTAL REVENUES

World Map of Social Networks 2013 (Click Image To Enlarge)

Facebook’s newest earnings report reveals that it now has 368 million monthly active users across Asia. Despite strong competition from full-featured messaging apps like Line and WeChat, Facebook displayed steady Asian growth in the figures for Q4 2013. It’s up from 298 million monthly active users (MAUs) at the end of 2012.

Here’s the graphic for global monthly active users from Facebook’s Q4 slideshow:

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Facebook just crossed 200 million daily active users in Asia at the end of 2013:

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Revenue boost

The social network’s revenue from Asia is still slim compared to Europe and North America, but it rose very strongly from Q3 to Q4, shooting up from $278 million to $341 million, which is the biggest leap it has ever seen:

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Facebook’s average revenue per user (ARPU) in Asia is now $0.95 – that’s $0.88 from advertising, and a mere $0.06 from transactions on Facebook. Yes, one penny has gone missing there.

Facebook saw strong growth in ARPU in Q4 around the world. It’s largest ARPU is still in North America, where each user generates $6.03.

The full Q4 slideshow is here.

COMMENTARY:    During the 4th quarter 2013, $1.933 billion or 74.78% of total revenues were generated by North America and Europe.  Asia represented $341 million or 13.19% of total revenues during Q4 2013.  Only $318 million in ad revenues were generated in Asia.  Average revenue per user from Asia was only $.95 compared to $6.03 in the USA/Canada.   Most of Facebook's growth in users has come from Asia.  However, Asia's average revenues per user are lagging way behind those of the West.  

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If Facebook hopes to increase overall ad revenues to justify its lofty stock valuation, it must increase average revenues per user in Asia.  One of the reasons for the disparity is that Facebook is only now beginning to monetize Asian users. It has some catching up to do, but there are tremendous hurdles it must cross, including cultural differences between East and West when it comes to acceptance of commercial ads and brands are only now gaining a better understanding of how to effectively market their products to the Asian marketplace.

Courtesy of an article dated January 30, 2014 appearing in TechInAsia

ASIA: THE LEADING APP MARKET IN THE WORLD

Asia: The Leading App Market in the World

The Asian app store market is a train that can’t be stopped. This month’s publication takes a deep dive into trends we spotted in Asia and the countries in it. To get a deeper insight into the Chinese market, we have made this publication in partnership with Wandoujia, a leading mobile content search engine for Android users in China.

Major Findings

• Asia is the most lucrative app market in the world. 41 percent of the total revenue globally in December 2013 came from Asia, while North America generated 31 percent and Europe 23 percent. 
• Revenue in Asia increased by 162 percent year-over-year (December 2012 to December 2013), while North
• America’s revenue grew by 46 percent. 
• Japan was undoubtedly the most lucrative country in Asia, followed by South Korea and China, Taiwan, and Hong Kong. 
• Freemium is the leading business model in Asia. 
• South Korea witnessed the steepest growth in revenue. Money generated in the country grew by 271 percent, with Google Play driving most of that growth. 
• Angry Birds Go! was the most downloaded game in Asia in December 2013, followed by 保卫萝卜2：极地冒险 (CarrotFantasy 2: Polar Adventure), and 史上最坑爹的游戏 (The Hardest Game in History).  
• On the Android platform Wandoujia, the most downloaded app was 12306官方, a railway ticket reservation app.

Asia Leads the World

How does Asia stack up against other continents? Globally, 41 percent of the total revenue in December 2013 came from Asia, while North America generated 31 percent and Europe 23 percent.

For Asia the divide in revenue between the Apple App Store and Google Play is almost half-and-half, while for North America, three-quarters of the revenue comes from the Apple App Store and one-quarter from Google Play. The revenue divide in North America also applies to Europe. Clearly, Asia is a different landscape than what’s seen in North America and Europe. Revenue in Asia is more evenly distributed between the Apple App Store and Google Play, while the Apple App Store generates the lion’s share of revenue in North America and Europe.

Below is a representation of the relative growth of each continent in the last year. In the below table, we’re comparing December 2013 to December 2012. All continents show revenue growth in the past year, but there are big differences among the continents. Revenue growth in Asia annihilated all other continents, seeing revenue increase 162 percent year-over-year (December 2012 to December 2013). Revenue swelled in Europe and North America by 45 percent and 46 percent, respectively. Australia saw the least growth, advancing revenue by 23 percent.

In conclusion, we can say that Asia is the leading continent in terms of revenue and had the greatest increase in revenue in the last year.

Aggregated Apple App Store and Google Play Revenue Growth - Comparing December 2013 to December 2012.  (Click Image To Enlarge)

Explosive Revenue Growth in Asia

We already illustrated that Asia is the No. 1 continent in terms of revenue and had the highest growth throughout last year. Below, we separate total revenue in Asia by app store — iPad, Phone, and Google Play. As we stated earlier, revenue in Asia expanded by 162 percent across the last year.  The chart below demonstrates that the spike in revenue is due to Google Play. Revenue from Google Play more than quadrupled throughout the last 12 months.  On the Apple App Store, revenue for iPhone nearly doubled (94 percent) and revenue for iPad grew by 64% (which is still more than the total growth in Europe or North America).

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Top Countries in Asia

When we separated revenue by country in Asia for December 2013, we dug up the following breakdown: Japan was undoubtedly the most lucrative country, followed by South Korea and China. Below the top three were: Taiwan, Hong Kong, Singapore, Thailand, Turkey, Indonesia, and Malaysia. To put into perspective the enormous difference in revenue between the top Asian country Japan and Malaysia, Japan’s revenue is 77 times that of Malaysia’s. The extremely disproportionate revenue share among Asian countries led us to believe that the market isn’t evenly divided.

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We already presented the huge revenue escalation in Asia; after we calculated the revenue growth for the top Asian countries, the numbers looked even more impressive. South Korea witnessed the steepest growth in revenue. Money generated in the country grew by 271 percent, with Google Play driving most of that growth, but also the revenue of the Apple App Store for iPhone grew more than for example the revenue in the United States.

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Now that we’ve analyzed the continent of Asia and its corresponding countries, it’s time to take a look at the business models apps have deployed in the Apple App Store. Compared to the U.S. all the top Asian countries make more revenue from in-app purchases (IAP) than from one-off revenues.

China led the way, with apps generating 96 percent of revenue from IAP. Japan and South Korea were closely behind China with 94 percent and 91 percent of total revenue from IAP, respectively. The freemium model is across the board the dominant business model in Asia.

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The Size of Locally Popular Apps

We took a look at the top 300 apps in Asia, checking to see the number of countries each app ranked in. If an app was only ranked in one Asian country, we defined it as locally popular. In the table below, we display the percentage of locally popular apps. In just a glance, we can see that the percentage of locally popular apps differs greatly among Asian countries.

In the United States, between 25 to 32 percent of apps were locally popular. In Asia, Singapore had the lowest proportion of locally popular apps (between 10 and 13 percent), while Japan had the highest proportion (60 percent 72 percent). The proportion of locally popular apps is directly correlated with specific languages and alphabets for some Asian countries, as well as developers investing in the localization of their apps on the leading platforms. In South Korea, the popular platform Kakao has a lot of Kakao-dedicated apps, while in Japan, the LINE platform is
extremely popular.

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Top Apps in Asia

The top performing apps in Asia on the Apple App Store in terms of downloads are presented below. In the rightmost column the top three country breakdown is included.

Angry Birds Go! Was the most downloaded game in Asia in December 2013, followed by 保卫萝卜2：极地冒险 (CarrotFantasy 2: Polar Adventure), and 史上最坑爹的游戏 (The Hardest Game in History). Most downloads came from China. Apple’s 12 Days of Gifts app was the only exception — it was downloaded the most in Japan (47%), Taiwan (10%), and Turkey (9%).

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Courtesy of Distimo's "Asia: The Leading App Market in the World" for January 2014

 

EUROZONE UNEMPLOYMENT RATE HIT 11.8% IN NOV 2012, WAS 12% IN FEB 2013, AND 23.9% OF EUROZONE YOUTH ARE STILL UNEMPLOYED

Scene of unemployed workers outside a Spanish unemployment office in Madrid in December 2012 (Click Image To Enlarge) 

The eurozone unemployment rate has hit a record high at 11.8% in November 2012 with 18.8 million people out of jobs according to Eurostat and youth unemployment at a new high of 24.4%.

The eurozone unemployment rate rose to 11.8% in November 2012 - the highest rate on record according to official figures out today.

Up from 11.7% in October, the latest figure has caused some concern in the eurozone. Graeme Wearden wrote on October 31, 2012:

"Today's unemployment data rather takes the shine off recent claims that the eurozone crisis is over. The immediate threat to the single currency has receded, but politicians and policymakers still face an ailing economy. Initiatives such as a banking union or the ECB's bond-buying programme may hold the eurozone together, but they don't deliver the hope of immediate growth."

Once again the highest rate was seen in Spain at 26.6% followed by Greece at 26% (recorded for September 2012). According to Eurostat, the unemployment rate increased in 18 of the EU member states, fell in seven and remained stable in both Denmark and Hungary.

Unemployment rates vary slightly between the EA 17 (European nations adopting the EURO as their currency) and the EU 27 or European Union.

EA 17 and EU 27 Unemployment Rates - 2000 through Q1 2012 - EuroStat (Click Image To Enlarge)

The latest figures from Eurostat, the statistical office of the European Union, also show the EU27 unemployment rate stood at 10.7% in November, stable compared with the previous month.

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Eurostat figures also show youth unemployment and the latest figures suggest the situation has got worse. The youth unemployment rate for November 2012 was 23.7% in the EU, up from 22.2% in November 2011.

The eurozone recorded a youth unemployment rate of 24.4%, up from 24.2% the previous month. Greece and Spain reported the highest rates at 57.6% (September 2012) and 56.5% respectively.

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Germany, Austria and the Netherlands had the lowest youth unemployment rates at 8.1%, 9% and 9.7% respectively.

The latest release shows that 26.06m people in the whole European Union were unemployed in November 2012 - an increase of 154,000 people on the previous month. Compared with November 2011, unemployment has risen by 2.012m.

Despite the latest release displaying the November 2012 seasonally adjusted rates for most EU countries, there are still some gaps. The latest recorded figures for Greece are from September 2012.

Austria and Luxembourg had the lowest unemployment rates at 4.5% and 5.1% respectively. Germany (5.4%) and the Netherlands (5.6%) also recorded low rates of unemployment.

The table below shows the seasonally adjusted unemployment rates by country and month. There is also a table showing youth unemployment by country. Breakdowns by gender can be found in our downloadable spreadsheet. What can you do with this data?

Eurozone Unemployment Rate Hits Record High in February 2013

Unemployment rose to a record high of 12 percent in February 2013 in the Eurozone, according to the latest data released by the EU's official statistics agency.

The Belgium-based Eurostat said on Tuesday that some 19.07 million people in the 17-member currency bloc are looking for jobs, up by 1.01 percent from the same month last year.

Laszlo Andor, a spokeswoman for EU Employment Commissioner, said.

"Such unacceptably high levels of unemployment are a tragedy for Europe.  The EU has to mobilise all available resources to create jobs...young people in particular need help."

The figures and a weak manufacturing sector report added to the gloom after data earlier this year had encouraged some hope the European economy might finally have touched bottom.

Analysts suggested Tuesday's reports pointed instead to worse to come, with the jobless queues likely to grow as the debt crisis continues to sap the economy.

Youth Unemployment

The highest unemployment rates in February 2013 were found in Spain with 26.3 percent and neighbour Portugal, on 17.5 percent.

Greece was put at it 26.4 percent but this figure is for December, the latest available.

The lowest rates were 4.8 percent in Austria and 5.4 percent in Germany, Europe's biggest economy.

With youth unemployment a huge cause of concern, Eurostat said that the jobless rate for under-25s ran at 23.9 percent in the Eurozone and 23.5 percent in the EU.

Among the countries with the highest youth jobless levels, Spain was on 55.7 percent, followed by Portugal on 38.2 percent and Italy with 37.8 percent.

Greece was the highest with 58.4 percent but this was also for December.

In the United States, the youth unemployment rates for teens (16-19 yrs) and young adults (20-24 yrs) are at historical highs, peaking at 26.75% for teens and 17.5% for young adults in early 2009 as a result of the Great Recession.  

U.S. Unemployment Rates - Teens (16-19 yrs), Young Adults (20-24 yrs) and Adults (25+ yrs) - 1948 through 2012 - Bureau of Labor Statistics (Click Image To Enlarge)

According to the Bureau of Labor Statistis, the youth (ages 16-24 yrs) unemployment rate stood at 16.2% at the end of March 2013.  This is more than double the U.S. unemployment rate.  By contrast, the Eurozone youth unemployment rate was 23.9% -- +47.5% higher than the U.S.

When you breakdown the U.S. unemployment rate by age and race, it is obvious that Hispanic and Black youth are having a difficult time finding employment.

U.S. Unemployment Rates - Teens, Young Adults and Adults Over 25 yrs - By Age and Race - March 2013 - Bureau of Labor Statistics (Click Image To Enlarge)

Howard Archer of IHS Global Insight said the figures marked a "dismal landmark" at 12 percent -- already very close to the official EU 2013 forecast of 12.2 percent.

COMMENTARY:   As you can readily see, although the U.S. unemployment rate as of March 2013 was 7.6%.  At the height of the Great Recession, the official U.S. unemployment rate exceeded 10%.  If you factor in individuals who gave up looking for work and under-employed individuals (part-time workers and temps) the U.S. unemployment rate was 22%.  

Three Measurements of U.S. Unemployment Rates - Official, Official+Workers No Looking For Work, and Official+Workers Not Looking For Work+Underemployed Workers - 1994 through April 2009 - BLS  (Click Image To Enlarge)

In a blog post dated November 6, 2011, I prepared a detailed analysis of the U.S. unemployment rate, and I explained the three key factors as to why the unemployment rate will continue to remain high, and why no President, not even Barack Obama, is likely to do much about it.   I believe that the Eurozone is in a similar fix.

To put things into perspective, the present Eurozone unemployment rate of 12% is probably closer to 25% when you factor in individuals who gave up looking for work and under-employed individuals (part-time workers and temps).  As a resu;t of these horrific unemployment statistics, the Eurozone is suffering through a recession similar to what the U.S. experienced just recently.  

Courtesy of an article dated October 31, 2012 appearing in The Guardian and an article dated April 2, 2013 appearing in Aljezeera and an article dated April 5, 2013 appearing in Center For Amerian Progress 

INSIDE RIO DE JANEIRO'S SAMBODROMO, CARNAVAL 2013 AND THE SAMBA SCHOOL THAT WON 2013'S COMPETITION, PLUS MUCH MORE

Rio de Janeiro Carnaval 2013 (Click Image To Enlarge)

Inside Rio de Janeiro's Famous Sambodromo

If you have ever wondered what it would look like from ground-level inside Rio de Janeiro's Sambrodomo, the place where the samba schools parade in annual competitions during Carnaval, then let the below Google Map image load, then left click on your mouse pointer to move down the parade promenade of Sambodromo.   Use the right click button of your mouse to move around to look at the grandstands and to reverse course.  That's what it looks like during Carnaval.  

Click To Enlarge And Left Click On Your Mouse To Move Forward Through The Sambodromo

The Samba School of Vila Isabel Wins Carnaval 2013 Competition

RIO DE JANEIRO, BRAZIL – Late on the afternoon of Wednesday, February 13th, G.R.E.S. Unidos de Vila Isabel was declared the Champion of the 2013 Rio de Janeiro Carnival competition, marking the third championship victory for the samba school and the close of this year’s Carnival.

 

Vila Isabel amazed the crowds and judges alike with their presentation of the Endredo (Theme), “A Vila canta o Brasil, celeiro do mundo – Água no feijão que chegou mais um” (The Vila sings Brazil, world’s breadbasket – Add more water to the beans, one more has arrived) when they paraded last during the final night of competition on Monday, February 11th. 

Lead by famous Carnavalesca (Carnival Designer) Rosa Magalhães, the parade was filled with brightly colored costumes and elaborate floats.

The school also featured a Samba-Enredo (Theme Song) that was praised for being catchy and sung well throughout the parade. Known for its famous composers in the past, the school won for best samba-enredo this year with the aid of famous contemporary Brazilian composer Arlindo Cruz.

The tallying of the votes held at the Sambódromo was broadcast live. It was a tight competition with the schools; Vila Isabel, Beija-Flor, Unidos da Tijuca (the 2012 champion) and Empress Leopoldinense tied at the beginning.

Popular favorite Mangueira had been penalized due to failing to finish their parade on time and São Clemente was criticized for using station logos during their tribute to the Prime Time block of programming but did not ultimately receive point deductions by LIESA.

Vila Isabel fans in attendance at the Sambódromo during tallying of the votes – and those gathered in the samba school’s Quardra (rehearsal hall) in the neighborhood of Vila Isabel in the city’s Zona Norte (North Zone) – began chanting “a campeã voltou” (the champion returns) during the announcements of the samba-enredo scores. Shortly thereafter, it was officially announced that Vila Isabel had won the 2013 competition.

Vila Isabel will be parade once again along other five top schools (Beija-Flor, Unidos da Tijuca, Imperatriz, Salgueiro and Grande Rio) during the Champions Parade on Saturday, February 16th at the Sambódromo.

Here's the list of the winners of Rio de Janeiro's Carnaval for 2012 and 2013:

List of Winners - Rio de Janeiro Carnaval for 2012 and 2013 (Click Image To Enlarge)

COMMENTARY:   If you are considering making a trip to Rio de Janeiro to experience Carnaval first hand, I recommend that you start making your reservations now.  Ticket reservations for the samba school competitions held in the Sambodromo for the 2014 Rio de Janeiro Carnaval are now on sale.  You can find out more by clicking HERE.   The site also provides information about the history of Carnaval, Carnaval Packages (hotel accommodations, tours, Carnaval balls and Carnaval parade tickets at the Sambodromo), the names of the samba schools competing in the 2014 Rio de Janeiro Carnaval, information about the Sambodromo, Carnaval costumes, and many other valuable information. 

Pictures of the 2013 Rio de Janeiro Carnival can be viewed HERE.  

Courtesy of  an article dated February 14, 2013 appearing in Rio Times