China’s Infatuation with Apps

Download Data

China’s love affair with mobile is well documented.  Naturally the involvement with mobile suggests an involvement with apps.  Juniper Research has substantiated the inference.  It is hard to believe that 59% of all downloaded apps in the world are downloaded in China and that no other country cracks 10% market share.  In further support of these data, Juniper says that the global average for download per mobile device is 28 per year.  In China, it is 90 per year.  Source: Juniper Research


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McKinsey: Middle class households will make up more than half the households in China by 2020.  That puts 472 million people in the middle.

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Forrester: e-Commerce in China is larger than the US.  Gross merchandise value (GMV) coming from e-commerce will exceed $1 trillion by 2019.

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Boston Consulting Group: Urban consumption in China will grow from $3.2 trillion today to $5.6 trillion in 2020.

Sources: The Economist, Boston Consulting Group

Consumer Sentiment Defies Popular Wisdom

Consumer Sentiment-August2015

Consumer Sentiment Defies Popular Wisdom

China’s consumer sentiment for August defies talk about a slowing economy.  For the fourth consecutive month it has risen.  It follows last week’s Carrier Data increases as another positive indicator that contrasts with popular perception.  The GDP slowdown has yet to reach the street.  Source: Westpac MNI China Consumer Sentiment

China Has 110 Million Mobile Addicts

Smart Device Population

Data from Flurry shows significant year-over-year growth for the worldwide smart device population – no surprise.  The interesting addition is a breakout of users into three levels of engagement.  We added the ‘percent of users’ column, which gives us a way to infer usage in China.  Our latest Carrier Data for China shows about 730 million smartphone subscribers in China.  If we apply the three levels of engagement to China, according to the ‘Percent of Users’ breakout, there are 387 million regular users, 234 million super users and 110 million mobile addicts.  Source: MediaPost

Luxury Brands to Take a Hit from China’s Devalued Currency

Rev from chinese Shoppers

China has devalued its currency and that will have an effect on luxury brands that depend most on China for revenue.  Deuteche Bank analysis shows the most vulnerable.  At the same time they minimize the damage to these brands by noting the average revenue loss will be around 4%, which isn’t good, but it also isn’t as dire as has been suggested.  Further they remind us that even with reduced growth, the Chinese economy is still growing – probably faster than any other major economy in the world.  Source: Quartz

No Slowdown in Smartphone Subscriber Growth

Carrier Data-August2015

The run rate for conversions to smartphones in China has been steady at about 20 million new subscribers per month for the last three months.  That is a growth rate of almost 3% per month during that time. Another way to look at it: There have been 100,000,000 new 3G/4G subscribers in the six months since February of this year.  And China Mobile’s market share continues to increase.  Source: China Mobile, China Unicom, China Telecom

McKinsey Recommends Five e-Commerce Strategies

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Adopt an integrated platform strategy

Even if you have a bricks-and-mortar presence in China you need to have a strong online presence as well.  McKinsey research shows that as much as 70% of internet users shop online regardless of the size of the city they live in.

Understand China’s vast network of distributors

Just placing your product in random TaoBao stores can lead to trouble. You can lose control of your branding and pricing.  Your products can go sideways into gray markets where things get ugly.  To counter those problems companies such as Kimberly-Clark have gotten cooperation on branding and pricing by offering store certificates, a promise of stable product supply and promotional benefits.  It’s a carrot and stick approach.

Harness the power of social media

In China the influence of word-of-mouth in purchase decisions is twice that of the US.  Social media in China is, therefore, even more important than in the US.  The leader is WeChat, a messaging service on steroids, which has effective commercial channels.

Leverage China’s growth in location-based services

To successfully build your brand, McKinsey recommends strategies that incorporate a combination of social media, location services – a strength of mobile, and mobile commerce.  They already have initials for it “SoLOMo.”

Work with platforms to understand China’s consumers

Example: P&G, China’s largest digital advertiser worked with Baidu, the search leader there, to analyze searches for the company’s Olay brand.  They found that aging was at the center of the queries, then adjusted their advertising to say that Olay will help you hold onto age 25.  It worked.

Source: McKinsey


China’s 2013 e-Commerce GMV to Double by 2018

GMV projection

The folks at McKinsey have pulled together an analysis of China’s gross merchandise value (GMV) through e-commerce back to 2012 and forward to 2018.  It takes into account China’s mobile subscriber penetration, which today stands at twice the entire US population and the intensity of the Chinese consumer’s focus on mobile as part of their lives.  The result, according to this analysis, is a doubling of China’s e-commerce GMV in three years from now.  Source: McKinsey, iResearch, eMarketer, Forrester Research

Serious Player

Handset Market Shares

Huawei very quietly has moved above Chinese rival Lenovo into the rarified air occupied by the top three handset producers in the world according to Gartner, the technology research organization.  The company now sits behind Samsung and Apple and earlier this month they announced a new phone called the Mate 2 that puts their equipment in direct competition with high-end Samsung phones.

The Mate 2 earns its $732 list price with features such as 5.5-inch display, a 13 mega pixel rear camera and fingerprint security.  It will also have a Force Touch display, which distinguishes between a light tap and deep press, which adds new functionality.  Apple is said to be adding that feature the next iteration of their operating system.

Huawei has a way to go to catch the big two, but they have made themselves a player in the game. Source: Reuters

Interactive Advertising Bureau Confirms Mobile Revenue Gains

Global Mobile Ad Rev

The mid-August release of global, mobile advertising revenues for 2014 by the Interactive Advertising Bureau (IAB)was in the truest sense, old news that had no surprises.    Revenue in every region was up compared to the prior year as mobile usage increases and all revenue was up better 50% regardless of region.  Asia-Pacific, dominated by China, showed the least growth of all regions probably because China’s 3G/4G penetration that didn’t get its legs relatively late in 2014 are likely causes.

Both Latin America and the Middle East & Africa started at such a low point that large growth in a world going mobile was inevitable.  North America’s growth spurt is likely elevated because Mexico is included.  Overall, the regional shares changed little from 2013 to 2014. Source: Interactive Advertising Bureau