Tencent, Baidu, Alibaba dominate China internet

61 Pages·2013·2.1 MB·English

GroupM Interaction
2013 China Internet
Overview
December 2013
China Internet Key
Sector Overview
Overall trends: China Internet and advertising
Online Video: Brand ads pour in big time
Social: WeChat & Weibo
E-Commerce: Herculean growth
Portals and Verticals: Sunset industries
Search: Baidu hegemony erodes
Mobile: Smartphones go mainstream
CHINA INTERNET:
Overall Trends
2013 China Internet Overall Trends
• China internet led by 3 dominant players – Tencent (QQ/games), Baidu
(Search), Taobao (E-commerce)

• Mobile forms the major undercurrent across all sectors; strategic question of
the year: how to capture and monetize mobile traffic?

• China’s major revolutions in Online TV (OTV), Social, and E-Commerce are
nearing “middle-age” as China goes mobile and we wait for the next big thing

• Online TV led by Youku rakes in massive brand ad dollars – a possible 3rd year
of 100%+ growth in 2013 – as OTV players consolidate and tier-1 inventory fills

• Weibo and WeChat dominate social, but unlike Facebook neither thrives on
brand ads; brand advertisers in China struggle to spend meaningfully on social

• China to surpass US in e-commerce; brands must formulate e-commerce
strategies
China leads the world in internet users
yet penetration at just 41% leaves much room for growth
2008-2012 China internet users
2008
298m
2009
384m
2010
457m
2012
564m
Source: CNNIC
Chinese are among the heaviest
internet users globally
Frequency of internet use by country
76% 77%
60%
56%
52%
38%
33%
29%
19%
17%
Many times a day Several times per day
Source: eMarketer August 2012
Internet taking more time
from traditional media in China
Time spent on media from 2005 – 2012
199
192
(min/per day)
170 168
148
123
87
78
54
43
39
32
9 8
3
Newspaper Magazine TV Radio Internet
2005 2008 2012
Source: CNRS; 36 cities
Access is shifting to mobile
with more than 463 million Chinese accessing the internet via mobile
Internet users in China by access device (PC, Laptop, mobile phone)
79%
74%
71% 72%
70%
66%
46% 45% 47%
June-11 June-12 June-13
Source: CNNIC July 2013
Social networks, music, and films/TV
lead online activities in China
Digital activities of internet users in
metro China over the past month
0000 0000 0000
72% 67% 57%
0000
Streamed music Streamed films Accessed maps,
72%
directions
0000 0000 0000
68% 61% 56%
Social networks, blogs
Downloaded music Accessed news Streamed TV
programs
Source: KPMG Digital Debate, Jan 2013
Online Video
continues to extend its dominance capturing 34% of time spent online
20%
34%
Other
Online
Video
5%
News
6%
Gaming
7%
E-Commerce
10% 18%
Search Social
Source: iUsertracker, July 2013