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Beyond 1.3 Billion: Understanding China & Social Media

Beyond 1.3 Billion: Undertsanding China & Social Media

China is a massive market for social and mobile. It has the most Internet users in the world, and the majority of them access the web through mobile. While most studies about China’s Internet ecosystem only focus on the size of the market opportunity from an economic perspective, this report not only explores the immense scale of China’s social and mobile market but also why it is culturally distinct, and how a more digital China is a core driver of the country’s current business innovation.


China: A different type of social scale


Think about it this way: the Super Bowl, the largest annual

real-time marketing event in the United States, had 111.5

million viewers this past February. It also happened to

coincide with the Chinese New Year, which is the largest

annual human migration on the planet. Over the holiday

about 3.6 billion trips were taken in China, an entirely

different order of magnitude in terms of consumer activity.

Narrowing our focus to Internet users leaves a smaller

population, but one that’s hardly small compared to

Internet usage in the United States or Europe. 618 million

people have Internet access in China, making it the largest

Internet population in the world, and almost twice as many

people as the entire U.S. population.

Moreover, despite its size, there are still major opportuni-

ties for online usage growth. While 85 percent of Amer-

icans have Internet access, only 45.8 percent of China’s

population is connected. However, the China Internet Net-

work Information Center estimates that there will be over

800 million Internet users in China by the end of 2015. For

marketers, the immensity of this scale changes everything.

There is a reason conversations about China’s Internet industry typically start with its size: the numbers are staggering. Overall, the country boasts 1.3 billion people, 56 ethnic groups, and over 290 spoken languages.

China has the largest Internet population in the world


Across the globe more and more Internet users are

accessing the web primarily through their mobile device.

However, in China, an overwhelming majority already

does. Of the 618 million Internet users there, a mobile

device is the primary gateway to the web for 500 million

of them. That’s over 80 percent of Internet users.

China is already the world’s biggest consumer of smart-

phones. But the smartphone market in China is distinct

from the United States. Major mobile device manufactur-

ers like Apple and Samsung have both retail and manu-

facturing presences in China, but foreign brands remain

behind domestic market leaders like Xiaomi, China’s top

selling smartphone brand.

Founded in 2010, Xiaomi sells almost exclusively via

e-commerce; the company only announced its first phys-

ical retail presence in Beijing in September 2013. None-

theless, by December Xiaomi had overtaken Samsung

and Apple in local market share.

Mobile is the Route. What’s the Destination?Most Chinese online destinations will be unfamiliar to

Americans. Baidu, Alibaba and Tencent, which dominate

search, e-commerce and social, respectively, have prac-

tically no presence in the United States. However, having

been shaped by the unique culture and conditions of

China, they are especially well suited to thrive there.

Thrive might even be putting lightly: Alibaba is the world’s

leading e-commerce platform. Tencent has a larger mar-

ket cap than traditional American tech giants like Intel,

Cisco Systems and Hewlett-Packard.

The technology that catapulted social media to its central place within China’s Internet landscape was mobile. As content marketers think critically about how to make inroads into the country’s vast social media market, the conversation needs to begin with the nature of mobile web access.

A mobile-first Internet market


Chinese social’s Swiss-army knife approach


The major categories for social in China are microblog-

ging, messaging services, and video/gaming, but there is

a lot of overlap between them. You might say Chinese so-

cial media platforms have a Swiss-army knife approach.

An app originally intended for messaging might have

gaming, music, mobile payment and sharing functionality

as well. Each platform is a unique mixture.

Sina Weibo

When talking with our clients about Chinese social

media, Weibo is often the first platform that gets men-

tioned. When many Americans use the term Weibo, they

are referring to Sina Weibo. In reality, “Weibo” doesn’t

refer to a specific company. It is a type of microblogging

platform; Sina Weibo, a private company that filed for an

IPO on March 15th, is one of the major ones. The service

became exceptionally popular in 2009 and 2010, when

it emerged as an alternative from the state media as a

source of news and information. It also became a popular

forum to discuss taboo topics like politics and controver-

sial social issues. The format is similar to that of Twitter;

users are limited to 140 characters per post. However,

given the nature of the Chinese language – characters

signify an entire concept, not just a single letter – that’s

actually far more content per-post than Twitter allows for.

But while microblogging may be the platforms oldest ser-

vice, it is hardly the only one offered: Sina Weibo users

can play games, listen to music and read the news as

well. Brands are very active on Sina Weibo, which makes

sense given that the platform has more than 280 million

users. However, that’s down 9 percent from the previous

year. Sina Weibo lost 28 million users in just 12 months.

Many of those users may have been reacting to changes

to the platform, in particular the government-mandated

requirement that users register with their real name. But

they didn’t leave the Internet entirely. Where did they go?

The China social media landscape comprises companies that structure themselves differently than those in the United States. Where as American companies like Twitter or Instagram hone in on a single format, Chinese social media platforms rarely focus on a singular form of functionality.

Each platform is a unique mixtureSina Weibo Wechat YY


The rise of Wechat

WeChat dominates mobile messaging services in China.

It occupies about 82 percent of market share for Chinese

messaging services, and that market is not small. In fact,

Mobile messaging apps have overtaken SMS to become

the largest communication channel among Chinese citi-

zens.

On Chinese New Year’s Eve an estimated 61% more mes-

sages were sent via Chinese social giant Tencent’s mobile

messaging products than via SMS. Part of the appeal of

messaging services like WeChat is that they offer more

private forms of communication than services like Sina

Weibo.

WeChat sends messages via Internet connections but,

keeping in the spirit of Chinese social’s Swiss-army knife

approach, also lets users send voice messages, share

social moments, purchase virtual goods like stickers, and

meet new people in a format similar to that of chat roul-

lette. They recently rolled out a mobile payment option as

well. Unlike mobile-focused American platforms, which

have increasingly focused their attention on providing and

improving a single service, China’s most popular mobile

app is a veritable cornucopia of functionality.

YY: Beyond comparison

While platforms like WeChat offer a broader array of

services than most American-based mobile platforms, you

can still draw parallels between it and similar services

that are popular in the U.S. (For instance, WeChat most

closely resembles WhatsApp.) Then there are platforms

like China’s YY, which utterly defy comparison.

In the words of Forbes’s Tomio Geron, YY is something

akin to “WhatsApp meets Zynga meets American Idol.”

It started as a service for gamers to discuss strategy, but

its real-time video capabilities caught on with general

audiences, who use the service for everything from broad-

casting karaoke sessions to hosting tutoring lessons. Your

audience can reward users with virtual goods like emoji

roses and lollipops, which the performer can then redeem

for real money. Some users earn the equivalent of tens of

thousands of dollars in Yuan a month performing on YY.

The service, which of course includes a mobile app and a

messaging component, is nothing like anything available

in the United States.

“It’s a little like a cross between Skype, Zynga and American Idol.”— Tomio Geron, Forbes


One nation.Many cultures.


Tier 1 – Beijing Tier 2 – Qingdao Tier 3 – Shenyang

Geography & demographicsChina is an enormous market that is very active on social, but it is hardly one large, uniform opportunity. China and its population of 1.3 billion people don’t even all speak the same language, much less share the same culture. In order to understand why the Chinese mobile and social market is so unique, you have to look at the distinct cultural underpinnings of the specific audiences that use social media there.

Experiences and subsequently attitudes also change as

you move between the generations and other socio-demo-

graphic divides, much like the ways Baby Boomers and

members of Generation X have very different approaches

to media and technology.

For example, consider the Fu Er Dai, which literally

translates into “Rich Second Generation.” The Fu Er Dai

is made up of individuals who were born in the 80s and

90s after China experienced a wave of reform and cultur-

al opening. They haven’t been weighed down by many of

the trials and tribulations their parents and grandparents

experienced. Most of them were born after the enactment

of the One Child Policy, so they’ve had the resources of

up to six income-generating adults (maternal and paternal

grandparents as well as their parents) to indulge their

whims with since early childhood.

Single men and women have a distinct set of attitudes and

experiences because of the tremendous amount of pressure

they have to get married and the professional success they

are expected to have established by the time they do so.

It is not easy to be a young man in China today. In order

to get married, you need to have a stable job as well

asW own your own home and, preferably, a car. You can

expect a prospective bride to question you in minute detail

about your income and assets.


Toursim, holidays and gifting

Giving gifts in China is extremely important, especially

when traveling. When you travel abroad, you are expect-

ed to return with gifts for everyone you know: Your family,

colleagues and clients.

That cultural practice manifests itself technologically

as well, through phenomena like virtual goods. Virtual

goods, such as those in YY and WeChat, are largely

based on the premise of and traditions surrounding

gifting. For instance, WeChat’s mobile payment scheme

uses virtual red envelopes, which is based on the Chinese

New Year tradition of giving others little red envelopes

with money.

Social pressure was also the catalyst for digital phenome-

na like Singles Day, an annual online holiday. Celebrated

on November 11th (11.11), it’s basically the opposite of

Valentine’s Day. In a spirit of rebellion against the social

pressure to get married and settle down, young people

celebrate being single and purchase things for them-

selves. On Singles Day 2013 $5.7 billion was spent on a

single e-commerce platform, T-Mall. That’s nearly 3 times

the amount spent on all of Cyber Monday.

The point is: The scale of China makes all of these differ-

ent audiences seem immense, and they are. But as a mar-

keter, if you want to capitalize on this opportunity, you

have to understand the difference in their online habits.

Then there are audience groups like Chinese tourists, which are somewhat nebulous but still very impactful economically. In 2015 Morgan Stanley, using research by McKinsey & Co., concluded that Chinese spending abroad would exceed the rest of global luxury sales combined. It’s an astounding barometer of the wealth being generated in China, but it also speaks to the particularity of certain Chinese cultural practices, like gifting.

“In 2015 Morgan Stanley, using research by McKinsey & Co., concluded that Chinese spending abroad would exceed rest of global luxury sales combined.”


An Immense Scale. A Unique Opportunity.


It’s also clear that we’re just beginning to feel the impact

of China’s web users. If, as predicted, China has 800

million Internet users by the end 2015, it seems inevitable

that their technologies and ways of interacting online will

begin to affect our own.

Knowing what we know now, what conclusions can we make about China and the future of the social and mobile market there? Simply put, because of the enormity of China and its unique sociopolitical conditions, we see technology and platforms emerging that are very different from those here in the United States.

And while the scale is immense, it’s important to

remember that all 800 million will not act in concert. In

order to understand and capitalize upon the opportunities

offered by such a large market, we have to look to the

cultural values that drive and influence both online and

offline behavior in China.

Understand the cultural values

Photo credit: http://pco.lt/OW3a6l


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