Ellie Johnston at Ellie JohnstonVery impressive numbers. I would like to know the actual buying power of Chinese people though. I heard it's something like only 40 million. Could that really be true? How can the average Chinese person afford a virtual pet if this is the case?3 years ago
China’s Mobile Internet Market Overview 201001Presentation Transcript
Make for GWC executive trip – USA
January 2010
www.thegreatwallclub.com
移 动 互 联 网 长 城 会
Mobile Internet Great Wall Club
www.thegreatwallclub.com
Why look at China?
What is “Chinnovation”?
Some examples
Why look at China?
Internet users 338 231
(Million) (Jun 2009) (2008)
Mobile users 695 270
(Million ) (Jun 2009) (2008)
Source: MIIT, CIA World
Company Operating Margin Company Operating Margin
Chinese American
NetEase 62.1% eBay 24.3%
Alibaba 39.7% Google 30.4%
Tencent 45.4% Yahoo! 0.2%
Sohu 38.2% Amazon 4.4%
Shanda 40.4% IACI -4.3%
Baidu 32.8% EA -13.3%
Sina 20.2% VeriSign 7.4%
Ctrip 27.7%
51job 11.2%
Average 35.3% 7.0%
Source: Plus Eight Star, Apr 2009
Over 1/3 from
Internet Café
Internet penetration 25.5% 73%
(%) (Jun 2009) (2008)
Mobile penetration 50% 90%
(%) (Jun 2009) (2008)
Over 50% additional
users from rural market
= Actively expanded
“Blue Ocean”
Source: MIIT, CIA World, GWC
Fixed-line
For many users and
Mobile SMEs, Internet will
VAS = 28% of total rev. only be mobile
60
Penetration rate %
50 Mobile = 50%
40
30 Internet = 25%
20
Fixed-line = 24%
10
0
Sources: MIITT, CNNIC, +8*
181 million mobile internet users = 26% mobile users
Cost of laptop
Netbook
3G
Smart phone
We expect Mobile Internet market is going to boom in the near future
Source: CNNIC, GWC, Aug 2009
Mobile
operator
Service &
Handset
App
maker
provider
What is “Chinnovation”?
Low price
Short time-
to-market
125~142 USD
Over 90% of
functions are
directly onto
the MTK chip
Source: an e-commerce site, Jan 2010
“BlockBerry” made by HAFF-COMM
Source: The Wall Street Journal Blogs, Jun 2009
Shaver phone
Cigarette case shaped
Barbie dressing case phone
PSP shaped, popular
games preinstalled
Watch phone
Car shaped
Solar power
Super lens attachable
rechargeable handset
WANG Jianzhou
CEO, China Mobile
2009 WEF, Davos
Company Operating Margin Online Ad / Total
rev.
NetEase 62.1% 13%
Tencent 45.4% 11%
Sohu 38.2% 41% Sohu’s online gaming biz lists in Apr
Shanda 40.4% <4% 2009 with a market cap over 1.8 bln USD.
1st IPO on Nasdaq since Nov 2008
Source: Company data, Jun 2008
Extremely advanced in China, lead by Tencent, 723 million USD, or 70%
total revenue, from virtual goods in 2008
Where? What?
Avatar for IM, Apparel, decoration (ear ring, bracelet, necklace, eyeglasses),
SNS, game background (building, car, sea, house, etc.), express/emotion, etc.
Pet - Virtual • Food for feeding
word • Shampoo, body shampoo
• Study at school
• Work for earning money
• Play in the world for entertainment
Social • Decoration of personal page and mini-home (background, navigator,
network animation, etc.)
• Background music (music, player)
Social game • Depends on the game, same concept with the ones in social network
Online game, • Depends on the game, for example, a powerful car or an accelerator in
mobile game Racing Car game
Available for both PC Internet and mobile
Source: GWC, Jan 2010
Low trust E-commerce booming
Few credit card 88 million online
2.3% of Chinese own credit shopping users
card
Taobao GMV: 11.9
Bad credit system
billion USD in 2009H1,
Huge population
Unbalanced economic
Y0Y growth ~100%
development
Alipay’s (brother company of Taobao) online escrow system helps both
buyer and seller build trust between each other, and largely accelerated
online shopping market.
1 billion USD rev. in 2008
~40% net profit
~90% of 1 billion USD from users
Source: Plus Eight Star, 2009
Some examples
~900 million registered accounts
~400 million actives
Over ~40 million paying ones
Revenue in 2008: 1,047 million USD
~70% from virtual goods
~20% from wireless value-added services
~10% from online advertising
Source: Yahoo! Finance, Jan 2010
Search
QB: Virtual $
Online shopping Entertainment
Email Multi-person chat
QQ buddy list SMS/MMS
Weather File transfer
Online disk Voice chat
Video chat
Wireless service
Mini portal Ad
Music
Chatting with friend
Game
friend’s QQ Show
Interaction Take a group photo with
Panel admin friend’s QQ Show
Making friends Friend’s QZone
E-magazine Background
Screen shoot
Online video Send pic
Stock info
Address list Font
Group list Smiley
Last contacts Animated smiley
Input area
SMS
Main menu
My QQ Show
History
Tencent browser IPTV
QQ Pet Source: Plus Eight Star, 2009
QQ Music
Market cap: 39.4 billion USD
Is it #3 Internet company, after Google and Amazon, in the
world?
Tencent
5 years comparison
Google
NASDAQ
Composite
Source: Yahoo! Finance, Jan 2010
Year 2008
Subscribers +200 million +400 million
actives
Revenue ~350 million USD 1,047 million USD
Net profit - ~40%
Market Cap 3~15 billion USD ~40 billion USD
Biz model Mostly ads Virtual goods: 70%
Wireless: 20%
Ads :10%
Source: Company data, Plus Eight Star, 2008
145 million registered users
3 million sellers Consumer
community
GMV in 6 months: 11.9 billion USD,
80% of market share
3 service
Consumer
YoY growth over 100% platforms
community
C2C “B2C”
1700 employees
Source: Company data, Jul 2009
Price Commission
rate
Official online store Taojianghu: SNS within
of Nokia in Taobao Taobao.com
Taoke – Human powered
marketing for sellers
Generating >100k USD
commission per day
Recently launched 3
customized Taobao Phone
An English learning SNS
Product name: Ucenter Home
Long tail in SNS
Thousands of thousands of
standardized “Facebook”
It’s free!
Powered by Ucenter Home
URL: http://home.ebigear.com/network.html
App1 App2 App3 App4 …… App N
SNS1 SNS2 SNS3 SNS4 …… SNS N
Source: GWC, Jan 2010
2010 Global Mobile Internet Conference
Mobile Internet Opportunities in Asia
Beijing, May 27-28th, 2010 2010 GMIC calls for
visionary speakers,
partners and sponsors!
Gold Sponsors
GWC holds the annual Global Mobile Internet Conference
(GMIC), one of the industry’s most influential conferences. This
year, approximately 1,000 mobile internet professionals will
attend the conference.
• Keynote speeches from the world’s industry leaders.
• Country Forums: China, Japan, South Korea, Europe
and the United States Silver Sponsors
• Innovation Show – Startup Competition (20 teams
from 9 countries)
• East & West Dialogue
• GWC Member Meeting
Chirag Shah
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