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China internet
This document summarizes trends in China's changing internet demographics and how they will impact companies. It notes that China's population is aging and internet usage is dominated by younger users. As the population of young users declines, companies will need to monetize customer lifetime value. Major internet companies like Tencent, Alibaba, and Baidu are poised to leverage their brands and traffic to move into new offline industries like retail, finance, healthcare, and automobiles. The mobile internet has also caused a major shift, making casual gaming and mobile apps the new focus.
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China internet
- 1. China’s Changing InternetDemographics From Games to Garages Frank Yu CEO Kwestr
- 2. Bio /Disclosure/Disclai mer Entrepreneur 1st iPad Gamefrom China Internet Startup Ex-MS IE7, Windows Mobile Launched Xbox in Asia 2003 First Game Team for MS in China Ex-PIMCO 1999 Analyst in #1 Internatiional Fund Morningstar Trading Desk Fixed Inxome/Equities Natwest All opinions are my own
- 3. The Internet Worldin 2011
- 4. China • China isthe largest by population • Still has room to grow • Much larger and more penetrated than India • Korea – a model for the Chinese Internet • Where is Africa?
- 5. AUGUST 2012 CHINAINTERNET
- 6. Looking at China’sreal population collapse
- 7. Why Real Demographicsimpacts Internet Demographics • China’s Internet is driven by users under 40 • After 40, users tend to spend less and save more. Newer tech may not be adopted • Even with a large population and moderate Internet penetration, usage of the internet by users under 30 is already high
- 8. China 2010 vs.2030
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- 10. The Sweet Spotis slowing • China going from Christmas Tree to Palm Tree • Peak Manpower projected at 2016 • The Census Bureau, for example, believes that China‘s current TFR (total fertility rate) is about 1.5— over 30% below the level required for long-term population replacement (2.1) • Women aged 25-29 already in decline
- 11. China 2030 willlook like Japan 2013 except much more males
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- 14. Reversing the declineis hard • Even if China were to abolish population control, the pool of child bearing women is already in decline for 20-24 and in 2015 for 25-29 • On a plus, age of child birth is increasing so 30-35 may be a source • But as China becomes more affluent, DINCs and Yuppies will choose to have less or no kids
- 15. China’s Internet Demographics linkedto China’s real demographics Aging Population Health Care Financial Planning Child Care Education Lifestyle
- 16. The two mostpowerful trends in the internet is driven by the young Social Mobile
- 17. Weibo Users areyoung From We Are Social
- 18. Mobile Internet usersare young (2012)
- 19. China Internet in2012 From Go Globe
- 20. What users doonline in 2012 From Go Globe
- 21. From Games toGarages • Entertainment Driven Tech towards Lifestyle Tech • Entertainment > Lifestyle> Life Planning • Old: Games, Video, Chatting, Entertainment • New: Commerce, Personal and Career Development, Quality of Life • Acquisition of Property, Cars and Family • Tend to kids and elderly
- 22. Gaming still important • Gamersare going from Hardcore to Casual • PC and Web Gamers are turning into mobile gamers • The old Gaming companies have a terrible time converting to mobile and casual • The new Gaming companies are smaller and app driven. New Players are Qihoo and Baidu • Baidu acquires 91.com for USD 2 Billion • Alibaba introduces mobile gaming platform
- 23. Lifetime Value of auser • As customer base shrinks or slows, the strategy for companies is to take their users and monetize them through the lifetime of the user and their family • User affinity towards Chinese technology brands is high or higher than legacy offline brands.
- 24. Biggest New Field Education(most corrupt and broken) NetDragon Estate Planning and Investment Travel and Tourism Minor Luxuries (Govt Austerity and Reform) Environmental Safety (food and pollution) Wellness and lifestyle (LOHAS and Quality)
- 25. The Game Changer •Mobile has caused a reset • A whole new eco-system • Older educated gamers turn to mobile and tablets from PCs and MMORPGs • Legacy game companies challenged / lost their internet café channels • Smart Phone price point means 2nd and 3rd tier users can now participate and transact. Internet users flattening out to the hinterlands
- 26. The Big 4to leverage online credibility and brands to go offline and in traditional product lines • • • • • • Retail Finance Healthcare Housing Local Listings Automobiles
- 27. Conclusion • China’s Netgeneration maturing • Net generation has 2 concerns (children/Parents) • The population crunch will impact companies • China’s Internet giants will use traffic and brands to go offline • WeChat Wechat WeChat • Tencent Health / Aliababa University / Baidu Motors / Qihoo Pharmaceuticals
- 28. Light In theBox • Take factory goods from China and sell to consumers in the US • A little bit of Alibaba and Amazon • Past Margins are being eroded away (wedding dresses) • Export related story slowing down (like Alibaba) • Acquisition of Ador and new Content strategy
- 29. VIP Shop • FlashBuying of old season brand stocks to 2nd or 3rd tier markets • Sold on Concession, no inventory risk • Brands needs to dump inventory, 2nd tier customers want quality brand products, VIP shop acts as a platform to connect • Part Groupon, part Last Minute, part Marshalls. Taobao and Tmall are fine but everyone loves an event and a sale
- 30. Tencent • Games, Communicationand soon MCommerce • Great Mobile and Game Product Teams and knows how to monetize customer base • The Tencent Tentacle in 2014 will soon include finance, video and lifestyle needs like Taxis and Purchases…looking to cut into the Tmall, Weibo Pie • One Word : WeChat
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- 32. The Rest • • • • Youku Sohu Sina (Weibo) TheGaming Companies – Shanda – Netease – Giant – Perfect World
- 33. 58.Com • Known asa Craig’s List but really more like a Yellow Pages • Aggressive Sales force sells space • Online discovery for Offline transactions • Local Search and Listings • Top 5 for Real Estate, Cars and Electronics • Free listing for Consumer to Consumer classified, with fee for rank bumping
- 34. The Ones toWatch • • • • YY Dianping VIP Shop Xiaomi
- 35. The Walking Dead •RenRen • Kaixin • The9
- 36.