Market research on mobile phone market in China

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Market research on mobile phone market in China

  1. 1. Scope of presentation…1) Mobile phone (Internet) population breakdown: • Total mobile phone internet users • Gender and age • Smartphone users vs. non-Smartphone users • Brand of mobile phone • Operating system2) Trends on mobile phone and analysis • Advanced data users • Potential growth • Forecast of future market share of Smartphones, apps and OS.
  2. 2. Mobile phone (internet)population breakdown Total mobile phone users: 878.83 million (accurate as of February 2011, by MIIT) Breakdown into various Telco’s (source: The Nielsen company, accurate as of August 2010) China Market Share Unicom & China China Mobile Telecom, 3… China Unicom & China Telecom China Mobile, 70%
  3. 3. Mobile phone (internet)population breakdown Breakdown by gender (source: The Nielsen company, accurate as of August 2010) Gender Females Males Males, 51% Females
  4. 4. Mobile phone (internet)population breakdown Breakdown by age (source: The Nielsen company, accurate as of August 2010) Age Groups 55-64, 14% 15 - 24 , 19% 15 - 24 45 - 54, 20% 25 - 34 25 - 34, 24% 35 - 44 35 - 44, 23% 45 - 54 55-64
  5. 5. Mobile phone (internet)population breakdown Smartphone users vs. non-Smartphone users (source: The Nielsen company, accurate as of August 2010) Smartphone users vs. non-Smartphone Voice users only, 10% Advanced data user SMS/ Voice user Advanced Voice only SMS/ Voice data user, 36% user, 54%
  6. 6. Mobile phone (internet)population breakdown Further breakdown of mobile phones by functions (source: 2010年上半年中国手机市场研究报告) Percentage7060 64.450 54.8 48.7 49.5 46.84030 35.3 Percentage2010 0 Smartphone 3G Functions GPS functions Touch screen MP3 functions Camera functions functions
  7. 7. Mobile phone (internet)population breakdown By mobile phone brands - inclusive of non-Smartphones (source: 2010年上半年中国手机市场研究报告)
  8. 8. Mobile phone (internet)population breakdown By mobile phone brands – Smartphones only (source: 2010年上半年中国手机市场研究报告)
  9. 9. Mobile phone (internet)population breakdown By Operating System (OS) market share (source: The Nielsen company – Feb-Apr Nielsen Mobile Insights, National, accurate as of May 2011) 2% Smartphone Market Share 2% 1% 1% Android OS 9% Apple iOS 36% RIM BlackBerry OS 23% Windows Mobile 26% HP WebOS Symbian OS Windows Phone 7 Palm OS
  10. 10. Trends on mobile phone andanalysis Data consumed by advanced data users (source: The Nielsen Company; accurate as of Q1 2011) Average monthly data usage (MB) RIM BlackBerry Windows OS, 6% Mobile, 8% Andriod Andriod OS Windows OS, 27% Apple iOS phone 7, 15% HP WebOS HP Apple iOS, 23% WebOS, 21% Windows phone 7 Windows Mobile RIM BlackBerry OS
  11. 11. Trends on mobile phone andanalysis Breakdown on the usage of data (source: The Nielsen Company; accurate as of Q1 of 2011) RIM BlackBerry 17 Online game playingWindows Mobile 19 Full track music downloadWindos Phone 7 26 Video/ Mobile TV HP WebOS 26 Streaming online music or Apple iOS 37 mobile radio Android OS 35 Application (Apps) Download 0 20 40 60 80 100
  12. 12. Trends on mobile phone andanalysis A noteworthy observation is that despite Android climbed to the number one spot as OS provider so quickly, it appears that their growth would not be as significant as before as the market share of Apple iOS and RIM BlackBerry stabilizes. A surprise finding though, is how much data the Android OS users have consumed, despite the fact that Apple users are more likely to download apps, stream music and watch videos etc.
  13. 13. Trends on mobile phone andanalysis The breakdown of the data (above) was pegged to the US population. It is not entirely accurate for the Chinese market, but may serve as a generic guideline on the breakdown of the usage of the data, by the various OS users. A more accurate breakdown on how the Chinese use their data is as follows:
  14. 14. Trends on mobile phone andanalysis
  15. 15. Trends on mobile phone andanalysis However, the Chinese mobile consumers have surpassed the Americans in a short period when it comes to accessing the internet via mobile phone. (39% of the Chinese mobile subscribers as compared to 27% of American mobile subscribers. (source: Mobile internet more popular in China than in US; Nielsenwire) Text messaging/ SMS remains the key function used by the the Chinese consumers at 87%. This implies that an advertisement sent out by SMS is rather effective as it reaches out to almost all the mobile phone users (non discriminating to non-smartphone users)
  16. 16. Trends on mobile phone andanalysis High use of the SMS function also implies that users are likely to ”forward” the message (advertisement) to their friends (i.e. other doctors in the case of MSD) and thus achieving a multiplier effect. The 2nd highest function they Chinese consumers use their phones for are for gaming purposes (39% on pre-installed games and a further 11% on downloaded games. This is excluding downloaded apps which might be games as well.
  17. 17. Trends on mobile phone andanalysis MSD can look at modifying Reckitt Benckiser’s approach to having a social media game, “poweRBrands” (as a recruiting tool) to become a mobile phone game (downloaded from web or even as an App for android/apple users). The game could be focused on being a (virtual) doctor, treating patients and prescribing the correct medicines (MSD products) to treat the correct ailments. This game could be targeted at doctors or even undergraduate students, studying medicine.
  18. 18. Trends on mobile phone andanalysis This mobile phone game could also be tied in with social media sites, (i.e. can be played on 人人网) and thus they can share their progress on the game with their friends via 人人网 or even 微博. Through this game, gamers (doctors) can better understand MSD products and how and when to use it in its most effective manner. The ultimate goal is that when these doctors are in practice, their tendency to prescribe MSD products will be comparatively higher, since they already know the product rather well.
  19. 19. Trends on mobile phone andanalysis The high usage of the mobile phone to surf the web, is also something we can look at, and a medium segmented marketing.
  20. 20. Trends on mobile phone andanalysis The breakdown of the categories of websites visited is listed below (source: The Nielsen Company; accurate as at Q1 2010)
  21. 21. Trends on mobile phone andanalysis The high interest in the segment of “Health & Fitness” – 15% is a good indicator that if resources were spent to advertise/ sponsor (in terms of articles to raise awareness for unbranded diseases), it implies that MSD’s brand exposure would then be significantly higher.
  22. 22. Trends on mobile phone andanalysis The trend of using picture messaging/ MMS, is also on the rise. Though it currently sits at 21% of data used, it is a more effective tool then SMS (when the 3G services are fully accessible by all). The idea of visually placing your ad in color, together with your brand name and information of your promotion, is definitely more effective than just receiving the same information via text alone. A case study on MacDonald’s Singapore, recent promotion has shown that the promotion, promoted via MMS is a very successful one.
  23. 23. Trends on mobile phone andanalysis Case Study on MacDonald’s Singapore:  They sent out the promotion coupon via MMS to their customer data base.  Many of them subsequently forwarded this “one of deal” coupon to many of their friends  The end result was that throughout the promotion period, the volume of their lunch and dinner crowd was 3 times as large.  Other fast food chain outlet came out with similar promotions, sent via the same medium, MMS with similar success.
  24. 24. Trends on mobile phone andanalysis The potential growth of the Chinese mobile phone market remains positive. Although the growth of mobile subscribers is slowing down, the growth of mobile INTERNET is picking up. (source: Noah Elkin; eMarketer.com; accurate as at March 2010)
  25. 25. Trends on mobile phone andanalysis However, it is important to note that despite this growth, it might still take a while before the bigger majority adopts the use of smartphones. Despite that, we see that many Chinese consumers prefer to get a smartphone when they purchase their next phone.
  26. 26. Trends on mobile phone andanalysis A Alphawise/ Morgan Stanley survey, polling 2,029 Chinese in Q1 2011 shows: I. 88% of respondents said they expect the next phone they buy, would be a smartphone. II. 30% of those who plans to buy a 3G phone, said they expected to buy an iPhone, even at its current price. III. If price was not a consideration, that number would jump to 53%. IV. Current market leader providing 3G handsets, Nokia, has the most to lose.
  27. 27. Trends on mobile phone andanalysis Breakdown of current and forecasted 3G handset market (source: Alphawise/ Morgan Stanley survey; accurate as at 1st April 2011):
  28. 28. Trends on mobile phone andanalysis The way the Chinese consumers choose their smartphone, has also become significantly complicated as shown below
  29. 29. Trends on mobile phone andanalysis With Smartphones available, comes the possibility of tapping onto the “Apps craze”. MSD could adopt a few options and jump onto the “bandwagon”:  Creating an app, targeted at the industry, giving a brief summary of MSD’s product.  Focused on explaining the products (OTC) instead of “advertising” them.
  30. 30. Trends on mobile phone andanalysis MSD could adopt a few options and jump onto the “bandwagon”:  Create a game (app) simulating a clinic, with the gamer as the “doctor”, as mentioned earlier in the slides, slightly different approach to that of Reckitt Benckiser.
  31. 31. Trends on mobile phone andanalysis Global mobile statistics 2011; mobitinking.com; accurate as at March 2011:  Over 300,000 apps have been developed in 3 years and the growth is not about to stop (according to IDC; Dec 2010).  Demand for apps stores Is expected to peak in 2013 (ABI Research; May 2010).  Price of apps continue to fall rapidly.
  32. 32. Trends on mobile phone andanalysis  Change of the prices are as follows: Change in price of a download app over 12 months, 2010 App Store Apple BlackBerry Ovi Android (Nokia) No. of 300,000 18,000 130,000 25,000 Apps Price All Apps -12 -24 +1 -29 Change Top 100 -19 -24 -9 -61 Apps Source: The Distimo report (Jan 2011)
  33. 33. Trends on mobile phone andanalysis This indicates that prices of apps are going to plummet further, but it does not mean that the number of free apps would surpass the number of paid apps. Furthermore, due to many platforms available to build your app upon, many are shifting away from building a platform app (downloaded app for a specific OS). Instead most choose to adopt to have a Web-based application. This is inline with the trend of developers building more powerful browsers on the mobile phones.
  34. 34. Trends on mobile phone andanalysis Hence, it is viable for MSD to pursue the possibility of establishing themselves on the online world, where majority of the Gen X and Y spend their time on. It would also be a strategic advantage for MSD as no other pharmaceutical firms have explored that territory yet (game – OTC products and Products catalogue – RX products). The only health mobile apps available currently are mostly focused on diseases (diabetes) management tools and tracking related functions.
  35. 35. Trends on mobile phone andanalysis However, it is also important to decide on which platform, should the apps be designed upon. One might be mistaken to solely focus on the fastest growing/ largest market share app. But such decision makes us fall into the trap of focusing on the “majority” and thus ignoring the rest. To eliminate this problem, MSD can choose to develop a web-based app instead of one, pegged to any OS.
  36. 36. Trends on mobile phone andanalysis Benefits of adopting the web-based apps are as such:  You can target audience using different OS (mobile) all at once.  Reaches wide audience and educates potential customers (patients) about MSD’s products (OTC) via the game.  Allows physicians to have and overview of what MSD has to offer (RX products) before the sales rep actually meet them to give them a detailed explanation of what the products can do.  Using a web-based application, MSD can also track who is using the app (i.e. for product catalogue app), by comparing it with the data base of doctors (via univadis) and make sure non-medical practitioner cannot misuse the knowledge/products.

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