China and the app economy


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Overview of China Market, Facts about appstores: "Where the apps are," Mobile ad spending- whats ahead, research about consumer apps

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China and the app economy

  1. 1. China and the App Economy Photo Credit: SocialMediaSEO.net1
  2. 2. Outline• Overview of China Market• Facts about appstores:  “Where  the  apps   are”• Mobile ad spending – what’s  ahead• Research about consumer apps
  3. 3. Introduction  to  China’s  Mobile  Market • 1,023.7 million mobile subscribers (April 2012) • 76%  of  China’s  population • 3 x larger than USA mobile subscriptions • 159.3 Million 3G users (April 2012) • 15%  of  China’s  mobile  subscribers,  global  average  is  20% • China’s  3G  market  grew  28%  from  Nov.  2011  to  March  2012 • 22% of global smartphone shipments in 2012 Q1 “By  the  end  of  this  year,  China  will  have  350  million   smartphones,  that’s  more  phones  than  there  are  people  in  the   US.” - Alvin Graylin, CEO of mInfo3 Source: MobiThinking
  4. 4. China’s  Unique  App  Economy • 80 million new subscribers annually for the past decade • 40% of internet users connect solely via a mobile phone • Historically, Chinese have been reluctant to pay for apps • 62% of iPhone owners have purchased at least one app • 23% of Android users have purchased at least one app • A taste for localized content • Nearly 50%  of  China’s  top  25  apps  are in Chinese • 65% of top 300 free apps are regionally popular only • Only 20% in USA and Europe4 Sources: TechCrunch,, BBC and App Annie
  5. 5. China’s  App  Store  Data8 Source: Stenvall-Skoeld
  6. 6. Apple’s  Chinese  App  Store Strengths Weaknesses • 25 billion apps downloaded • Despite high quantity of downloads, worldwide ranks 8th in total revenue generated • China has 2nd highest iOS app • Piracy and jailbreaking of the iPhone downloads in the world are rampant • Allows users to download paid apps for free • App store revenues grew 213% in one year (May 2011-May 2012) • Downloads increased 305% • In China every iOS app download generates $0.03 • Every US download generates • iPhone has 19% market share $0.287 Source :PC Advisor
  7. 7. China  Mobile’s  Mobile  Market • Launched in 2009 • Activity – November 2011 • 30 Million downloads 87% under 3 RMB ($0.50) • World’s  largest  mobile  phone   • • Avg. price: 2 RMB ($0.30) operator • Avg. game price: 6.3RMB ($1.00) – January 2012 • 150 Million Mobile Market users • 640 Million phone • 120,000 games and apps subscriptions (Jan. 2012) • 490 million downloads5 Source: The Next Web
  8. 8. China  Mobile’s  New  Mobile  Market • Previewed July 2012 • Set to launch September 2012 • China Mobile to take 50% of revenues from sales, compared to Apple’s  30%  revenue  share • Will integrate searches from other app stores 86 Source: Gomo News
  9. 9. Nokia’s  OVI  Store   • 120 million registered customers • 120,000 apps • 15 million downloads per day • 90% of users access in local language • Top-5 Apps Globally in 2011 – Facebook Chat – eBuddy Messenger – WhatsApp Messenger – High Speed 3D Free – Skype9 Source: Nokia
  10. 10. China’s  App  Store  Revenue  Forecast3 Source: Stenvall-Skoeld
  11. 11. China’s  Mobile  Advertising • Potential to reach over a billion people • Compare to 300 million with internet ads • Most effective mobile ads combine 3 factors: • Social Media • Mobile Phones • Location-Based Services Source: eMarketer10
  12. 12. China’s  Mobile  Ad  Spending
  13. 13. Commissioned mobile market research • Surveys conducted in May/June 2012 • Focused on casual dining restaurants • 500 respondents in Tier 1, 2, 3 cities
  14. 14. Have you used the  restaurant’s  mobile app? Percent of respondents (max = 100%) 6% 10% No, I dont know there is one22% No, havent had the chance to 62% Yes, on my mobile Yes, on someone elses mobile phone
  15. 15. If you were to design the restaurants mobile app, which of the following features would you include? Please select top 3. Games, and other fun activities Maps, directory or locations Product Information about restaurants foods and beverages Mobile ordering for in-store pick-up Payment for your order, in place of cash or a debit card Max = 100%Ability to purchase restaurants gift cards or e-coupons for your family & friends News of other coupons and special offers Receiving special offers and other rewards, as a member of the loyalty program Mobile ordering for at-home delivery 0% 10% 20% 30% 40% 50% 60% Percent of respondents (top 3 choices allowed)
  16. 16. When dining at the restaurant, would you check-in on your mobile phone to share your location and: _____________ ? Max = 100% 90% 80% 70% Percent of 60%respondents(more than 1 50% choice allowed) 40% 30% 20% 10% 0% Earn points for current or future Receive discount/offers for your Share discounts and offers received via rewards from the restaurants loyalty current or next visit to any of checking in with your friends via social program restaurants locations networks, like Weibo or RenRen
  17. 17. If you joined the restaurant’s  loyalty  program, what kind of information wouldyou be prepared to offer to help it personalize the rewards you received? None of the info (below) All of the info Number of family members Postal / Email address Favorite products Max = 100% Gender Your birthday Name Mobile phone number 0% 10% 20% 30% 40% 50% 60% 70% 80% Percent of respondents (more than 1 choice allowed)
  18. 18. If another similar restaurant you frequented had a loyalty program that youcould join offering with special offers, exclusive events, and other privileges,would you be: ___________________ ? More likely to increase the amount 22% you ate at the other restaurant, but continue  eating  at  McDonald’s   40% about the same Likely to increase the amount you ate at the other restaurant and decrease the amount you ate at McDonald’s Continue eating at the other restaurant  and  McDonald’s  about   38% the same as before More likely to increase the frequency of visit to the other 15% restaurant, but continue eating at Pizza Hut about the same 50% Likely to increase the frequency of visit to the other restaurant and decrease the frequency of visit to 35% Pizza Hut Continue visiting the other restaurant and Pizza Hut at about the same frequency as before
  19. 19. China’s  Mobile  Future “Don’t  look  to  Japan  or  Korea  to  see  how  consumers  will   be  using  technology,  or  to  the  U.S.  or  Europe.” “China  is  the  hotbed  for  how  consumers  will  live  in  the   global world going forward – and  it’s  all  about  mobile.”   – James Fergusson, Global Head of TNS19 Source: eMarketer
  20. 20. This presentation has been prepared by: Shanghai Headquarters Austin headquartersBridge 8, Building 9, Unit 9605 No. 25 Jianguo 1300 Guadalupe St., Ste. 201Middle Rd., Luwan District Austin, TX 78701200000 Shanghai, China For more information please contact: