DTTT Market Report - China - Digital Tourism Think Tank

Transcription

China. #DTTT Market Reports
Contents
Country Overview
2
Consumer Behaviour
4
Connectivity
12
Mobile Devices
16
Social Networking and UGC
21
eCommerce
26
Summary
30
Read more
34
#DTTT Insights - China - thinkdigital.travel
2
COUNTRY
OVERVIEW
Country Overview
Key Facts
• China has the biggest population in the world.
• China is the fourth largest country in the world.
• There are 160 cities with a population of over 1
million.
• The biggest city in China is Shanghai with 20
million urban population.
• China is expected to become the world’s largest
economy by 2017.
Population size: 1,350,695,000
GDP (nominal): $ 13.374 trillion
Key Links
http://english.gov.cn/
Average salary: $ 730 / month
Capital city: Beijing
Currency: Renminbi (yuan) (¥)
https://twitter.com/china
https://www.facebook.com/pages/China/
107769809246142
4
CONSUMER
BEHAVIOUR
Consumer Trends
Future technology consumption
Undoubtedly, the sheer size of the Asian-Pacific region
positions it as one of the key markets that have to be
considered globally. Tourism in Asia Pacific is growing
and becoming increasingly available to the wider public.
The fast adoption of new technologies drives a dynamic
and constantly changing landscape when it comes to
consumer trends.
With more than 500 million Internet users there has been
a rapid growth in recent years in the domestic demand
for Information and Communication Technologies (ICTs)
(Open Society Foundations, 2012).
Overall, China has one of the biggest online audiences
in the world. China’s Internet Network Information
Centre (CNNIC) estimated that there were 591 million
Internet users in China in 2012 (CNNIC, 2013). This
number indicates that Internet penetration was still low
(44.1%), compared to other more developed countries.
However, the penetration rate is growing rapidly. The
first half of 2012 witnessed an increase with a total of
24.5 million Internet users. Within that period, Internet
users on desktop computers accounted for 70.7% of
the total, 2.7% less than that in the second half of 2011,
while the percentage of mobile Internet users increased
with 72.2%, surpassing that of desktop users (CNNIC,
2013). Such annual growth rates are significant,
compared to other countries, like the US, where growth
rate reaches approximately 0.6% (comScore, 2013).
In 2014, CNNIC released its 33rd report on Internet
Development in the country indicating that the number
of Internet users reached 618 million in 2013 (CNNIC,
2014).
The sheer number of users positions China not only as
the biggest Internet audience in the Asia-Pacific region,
but also as the main online consumption market in the
world.
Recently, the Chinese government made substantial
plans for investments in ICT infrastructure. According to
a report by the Information office of the State Council,
China has invested $680 billion in Internet infrastructure
over the past 13 years (Open Society Foundations,
2012). Part of the investment is directed at significant
improvements of Internet services offered in the country,
which means large investments in fibre optics. By 2015,
the Chinese government has promised to improve the
Internet speed of fixed broadband connections.
According to the third phase of the project, running
between 2016 and 2020, the State Council plans to
further improve the infrastructure, narrowing the gap
between developed Western countries and the national
market. In order for this to happen, broadband
connection speeds have to reach 50Mbps by 2020
(Forbes, 2013).
Currently, the Internet consumption market has not
realised its full potential and there are still many
challenges for marketers who want to target Chinese
consumers. With many markets in the region restricted
by broadband infrastructure limitations and low access
to computers, the ubiquitous mobile phone and 3G/4G
services are predicted to be a game changer for the
national market.
6
Consumer Trends, Media Time and Consumption
The three biggest Internet audiences in the world (unique visitors)
Engagement in Asia-Pacific Countries (Hours / Week)
27.2
Thailand
618
245
millions
millions
137
millions
Vietnam
26.2
Taiwan
26.1
23.7
Hong Kong
21.5
Japan
16.2
China
11.9
India
China
USA
India
Source: comScore, 2013
Source: InternetWorldStats, 2012 and CNNIC, 2014
Numbers of hours spent online for video consumption in China
and India (Hours/Month)
Current and expected Internet speed by 2020
(Mbps)
50
50
180
173
164
135
126
37.5
90
108
108
121
25
20
12.5
0
45
4
2012
2015
Radio
0
TV
China
Video
India
Mobile
Source: Forbes, 2013
7
Media time and consumption
Currently, television is still the preferred information and
entertainment channel in the country with a penetration
rate of 98% (Open Society Foundations, 2012). Nielsen
(2013) reported that in 2012 TV consumers reached
1230 million, while the estimated number of online
consumers was less than half, or approximately 457
million.
Consumption of social media through the mobile
medium is expected to grow. This is important, as it
seems that social media has a huge potential to drive
online and physical sales. Research by Nielsen
(2013) illustrates the huge influence of social media
on purchase decisions, with 77% of purchases
influenced by reviews and ratings on one or more
social media channels.
In comparison to other countries, radio has never
enjoyed much popularity and has approximately 30%
penetration rate in the country. On the other hand, the
popularity of the Internet as a media consumption
channel is growing, especially in urban regions, where
Internet consumption is 10 times higher than in rural
regions (Open Society Foundations, 2012).
On average, the weekly time spent online by Chinese
internet users increased to 16.2 hours in 2012. The
corresponding averages for Taiwan (26.1) and Hong
Kong (23.7) are even higher (comScore, 2013).
Nielsen’s global media consumption index (Nielsen,
2012) shows that Asia (excluding Japan) and BRIC
nations surpass Europe and western markets on
television viewing and video consumption via desktop
internet or mobile devices. According to Nielsen’s
report on the Asian media landscape, consumers in
China spend 108 hours monthly for watching TV.
General online video usage is even higher, with 126
hours per month, where China leads the chart. In
terms of mobile video usage, consumers spend 173
hours on average per month.
8
Demographics
Age profiles
China has the biggest population in the world with over
1344 million people in 2013. The population reached
the billion mark in 1982, but the current annual growth
rate (0.4%) has been slower due to the implemented
one-child policy.
As a result of the implemented one-child policy,
the share of younger people is decreasing. In
terms of age groups, 17.2% belongs to the
0-14 age group, 73.4% to the 15-64 age
group, and 9.4% to the 65+ age group
(IndexMundi, 2013).
Among Internet users, the middle class is expanding
very fast. The disposable income levels per household
have significantly increased in comparison to previous
years. Another very interesting factor that makes this
new middle class very special is that these consumers
are younger in comparison to other developed
markets. This is quite unique, as China’s wealthiest
consumers are normally aged between 25-44 as they
actually have a very high level of education and training
required for well-paid jobs. Older Chinese consumers
very often do not have that level of education, making it
harder for them to get well-paid positions. However,
with the growing income they have available, the
demands and expectations towards brands, shopping
experiences and products also increases. This new and
young generation is very digitally savvy and will lead and
drive change within Asia (Euromonitor 2011).
Looking at online engagement per age group,
surprisingly the biggest share of online
consumption belongs to the 55+ age group
with 19% of males and 15.7% of female
representatives. Among males, the 35-44 age
group has the lowest share of Internet
audience. Among females, the 45-54 age
group seems the least engaged with online
consumption (14.4% of the total share of
Internet audience) (comScore, 2013).
Males between the ages of 15 and 24 are the
heaviest Internet users in Taiwan and Hong
Kong (comScore, 2013).
Gender differences in terms of online media
consumption in China are small. The average hours per
visitor for men (16.5) do not differ significantly from the
average amount of time spent online by women (15.7)
on a monthly basis (comScore, 2013).
The differences are, however, bigger when we look at
the situation on a regional level. On average, men
spend 4 hours more online in Taiwan than women. The
audience in Hong Kong shows a similar trend, with
averages for men (25) higher than the corresponding
average for women (22.6) (comScore, 2013).
9
Age Profiles and Web Languages
Average time spent online (Hours per users)
16.2
17.0
16.6
15.7
CHINA
15.8
29.8
14.8
25-34
35-44
45-54
TAIWAN
22.8
15.7
15-24
23.6
23.8
55+
29.2
27.1
27.3
27.8
14.4
19.0
35.9
33.6
16.0
22.4
22.5
19.7
20.8
Portugese
German
Arabic
Chinese-speaking
consumer markets
Hong Kong
Macao
153 807
Singapore
99 111
Japanese
83
990
75
174
65
21.9
China
445 1479
Spanish
23.5
537 301
Chinese
HONG KONG 18.6
16.4
Top Internet languages and yearly growth
(Millions / %)
English
21.4
23.2
Taiwan
2501
10
Web languages
Search engines
For the tourism industry, languages are always a key
factor, as content is the one thing that sells a tourism
destination, product or service. In the digital era,
content is gradually moving towards multimedia.
Videos, interactive maps and virtual reality are often
used to represent the same information in more
engaging ways.
As in other regions, search engines are very important
in Asia Pacific. Consumers are spending an increasing
amount of their time online and the starting point for a
lot of things consumers are looking for is a search. Within the Asia-Pacific region, the Chinese language is
the preferred language for communication and viewing
online content.
Looking globally, Chinese is the second most popular
Internet language, with more than 509.9 million people
(25% of all Internet users) who use it as a main
language on the Internet (Internet World Stats, 2010).
Together with Arabic and Russian, the Chinese has
been the fastest growing Internet language in
popularity in recent years.
Apart from China, there are several other Chinese
speaking markets, including Taiwan, Singapore, Hong
Kong and Macao. This huge market means
that tourism businesses should consider to have
websites and content translated into Chinese in order
to address the market more efficiently.
By the end of June 2012, China had 8.73 million
domain names, among which those with “.cn” number
3.98 million. In 2014, 3.3% of all websites are in
Chinese (W3Techs, 2014).
China has the largest audience of searchers in the
world. According to comScore (2013), the number of
searchers is growing fast, with an 8% increase
between 2012 and 2013. In comparison, the same
period saw an increase of 6% in searchers on a global
scale. ComScore (2013) estimated that there were
320.4 million unique searchers in China in 2013. The
country that comes the closest to this number is the
USA. Nonetheless, the number of unique searchers in
America still lags behind with approximately 80 million
unique visitors. In 2013, the number of unique
searchers in Taiwan was 12.3 million, while searchers in
Hong Kong were 4.2 million.
Currently, the vast majority of searches are still carried
out from desktop computers (98%). Despite the large
number of mobile device owners, only 1% of searches
were carried out from a mobile phone, and less than
1% from tablets. It seems that mobile search is more
popular in Hong Kong, where 4% of searches were
carried out from mobile phones, while 4% were made
from tablets.
However, the numbers are different when we look at
search referral rates. In mainland China, 16% of
referrals came from searches on desktop PCs, 15%
from tablet, and only 6% from mobile phones. The
numbers are higher for Hong Kong, as 20% of referrals
come from desktop search, 16% from mobile phones,
and 20% from tablets (eMarketer, 2012).
11
China is one of the few countries in the world where a
home-grown search engine dominates the market. The
most popular search engine in China is Baidu, with 78.6%
market share in 2012 (China Internet Watch, 2012). The
company owns the Chinese language-search engine for
websites, audio files, and images and has its headquarters
in Beijing. Most popular search engines in China
E-mail Marketing
Globally, email marketing is often ranked second as a
direct digital communication channel. Number show
that it is still a very essential part of consumers’ daily
lives in Asia Pacific. For instance, China Internet Watch (2013) reports the
results from a study carried out by Experian,
investigating 321 Chinese enterprises in a variety of
industries. According to the survey results, email
marketing is seen as the most important channel to
reach consumers. From all surveyed enterprises, 66%
indicated that they have already adopted email
marketing within their multi-channel marketing strategy.
The demographics of email usage is another very
interesting factor to consider in terms of email
marketing within the region. Over the last years, there
has been a shift as young consumers are decreasing
their overall engagement with emails.
75%
Having in mind the significant mobile penetration rates,
mobile marketing in China is predicted to increase, but
has not reached its full potential. Experian study results
showed that enterprises in China are quickly adopting
mobile marketing, however, less than half have
developed a mobile marketing strategy. In comparison,
65% of Hong Kong enterprises tried mobile marketing,
while only 36% of Chinese enterprises tried. Merely
16% enterprises integrated mobile marketing into its
strategies (China Internet Watch, 2013). 14%
2%
Source: China Internet Watch, 2012
12
CONNECTIVITY
Connectivity
Broadband Access
Looking with more detail at the big players within Asia
when it comes to broadband access, it becomes clear
that China is still the top internet country within the
region, followed by two other countries: India and
Japan. Broadband makes up the majority of Internet
connections in China, with 363.81 million users at this
service tier (Internet World Stats, 2012). Considering
the sheer size of the population, however, in 2013, a
mere 40% of households had Internet access.
In 2013, the average fixed broadband download speed
in China was 3 mega bits per second (Mbps). In parallel
to an increasing number of broadband subscriptions,
Internet speeds are also expected to improve, as the
country launches a major project for fibre optics. Forbes
(2013) reported that the goal is to reach 20Mbps for
urban households, while rural Internet speeds are
expected to reach up to 4Mbps.
The improvement of speed of Internet connections will
drive a higher Internet penetration rate and the number
is expected to rise up with 50% by 2015. By this target
year, China is expected to have 270 million residential
and 850 million commercial users (Forbes, 2013).
Internet Use
Without doubt, China is the country with the biggest
Internet audience in the world. On January 16, 2014,
China’s Internet Network Information Centre (CNNIC)
released its 33rd annual report on Internet Development
in the country (CNNIC, 2014). According to the report,
the number of Internet users reached 618 million in
2013. This comprises of 45.8% penetration rate, up by
3.7% in comparison to the previous year. This growth is
quite interesting, and shows that in years to come
China will be most likely a driving factor of growth in the
region.
The proportion of mobile Internet users is 74.5%, which
is much higher than Internet users who access the Web
from other devices (CNNIC, 2014). Internet usage in China may be divided into four general
categories: the acquisition of information and
education, various business transactions,
communication, and entertainment. Of these, “the
acquisition of information” is reported by users to be
the second most common reason for web usage (after
“communication”) (Open Society Foundations, 2012).
In 2012, the most popular online activities in China were
music streaming (83%), news (78.5%), instant
messaging (75.3%) and video consumption (67.7%)
(Open Society Foundations, 2013). More recently, a
report by comScore (2013) indicates that the most
popular web categories in China are social networking
(86%), multimedia (74%) and games (59%).
14
China has the number 2 audience in the world
in terms of video consumption. A study by
comScore (2013) reports that the number of
videos watched online reached 30.9 billion, with
101 monthly average videos per viewer. Such
numbers are higher than the reported
equivalents in countries such as the UK.
Youku leads the online video segment in China
with 280,975 million unique visitors in 2012
(comScore, 2013). Tencent and Tudou sites
follow in the chart with 265 million and 220
million unique visitors.
Internet Usage Patterns
Reach of key web categories in China / World (%)
90
67.5
45
22.5
0
Social Networking
Retail
China
Search/Navigation
E-mail
World
Most popular online activities
86%
Music
Streaming
75%
Instant
Messaging
75%
67%
News
Video
15
Internet Censorship
Internet usage patterns in China are heavily influenced by
the “Internet Censorship” imposed by the government.
The censorship is implemented through a wide variety of
laws and administrative regulations. In accordance with
these laws, more than 60 regulations have been
introduced and approved by the government of the
People’s Republic of China.
In 2013, more than 18,000
websites have been blocked in
mainland China
The regulations of censorship are normally implemented
through provincial branches of state-owned Internet
Service Providers (ISPs), companies and various
organisations.
In practice, the censorship has been implemented through
intricate and complex protocols and techniques. One part
of the block is to prevent users from accessing specific
websites. According to a study from Harvard (King et al.,
2013), more than 18,000 websites have been blocked
within mainland China. Out of the top 100 global
websites, 12 are currently featured in the list of banned
domains in the country.
C
O
L
D
E
K
B
Another part of the block includes filtering out the results
for specific terms and words. Searches for these specific
keywords will yield few to no results (Council on Foreign
Relations, 2014).
Apart from Internet websites, online censorship is also
imposed on personal pages, blogs and social media.
Blocked content and censorship is mainly directed at
government-sensitive issues and critics. The government,
as well as the media often use microblogging service Sina
Weibo to spread ideas and monitor corruption.
Interestingly, the website is also supervised and selfcensored by 700 Sina censors.
Sina Weibo employs more than 700
censors who go meticulously
through the content on the website
16
MOBILE
DEVICES
17
Mobile Devices
According to The Guardian (2014), the predicted number of sales of new
mobile devices for 2014 is 283 million. This means that China will be the
country where smartphone penetration will grow the fastest in 2014. In
terms of ownership, the Guardian predicts that 76% of sales will be made
to first-time users.
Mobile devices
The penetration rate of mobile is higher than other Asian-Pacific countries
(except South Korea). According to the report by Nielsen, “The Mobile
Consumer” (2013), 89% of consumers have a mobile device. Two-thirds of
Chinese mobile subscribers surveyed own a smartphone, compared to
only 10 percent in India where the majority of consumers have feature
phones (80 percent penetration).
Within the BRIC countries, China is leading in ownership of smartphones.
The share of smartphone devices (66%) is significantly higher than that of
feature phones (25%) and multimedia phones (9%) (Nielsen, 2013).
Internet access modes present a new pattern in China. In 2014, the
mobile phone is the Internet access terminal with the greatest number of
Internet users in the country (CNNIC, 2014). According to a report by Pew
Research (2014), approximately 79% of China’s 618 million Internet users
accessed the Web through a mobile device.
This means that more and more people prefer the mobile medium to
consume information online and this is why many companies want to
ensure that they tap into this growing mobile market.
There are differences in the device penetration rates between men and
women among all countries, however, China and Brazil show the largest
gender divide among smartphone owners (17 and 16 percentage points,
respectively, skewing male).
An excellent example for this is the search giant, Baidu. In 2014, the
company announced that it will focus on four major areas of growth. Two
of them are directly connected to mobile: 1) mobile and cloud, 2) locationbased services, 3) consumer products, including gaming, and 4)
international operations (Mitra, 2014).
Approximately one-third of consumers (36%) own more than one mobile
device (Nielsen, 2013). China is predicted to be one of the 10 largest
countries that will contribute the most to sales of mobile devices, followed
by India and the US.
The mobile initiatives of the company are already highly successful,
bringing in 20% revenue in 2013. The giant ended the year with a total of
14 different mobile applications on the market. It is expected that the
revenue from mobile will increase up to 30% in 2014 (Mitra, 2014).
18
Mobile Devices
Ownership of annual data plan
Factors when buying a mobile device (%)
China
77%
China is predicted to
be one of the 10
largest countries that
will contribute to sales
of mobile devices
17
Stylish design
21
Operating system
25
Value for money
13
Easy to use
21
Choice of apps
43%
Brazil
Source: Nielsen, 2013
Use of mobile devices
84%
Russia
SMS / Text messaging
43%
58%
57%
India
Email
39%
Video
42%
Banking
67%
Instant message
59%
Online music
19
Tablets
Apart from smartphones, China is quickly becoming
one of the largest markets for tablet devices. In 2011,
the US computer company Dell announced that it will
team up with China’s biggest search engine, Baidu, to
create a new line of smartphone and tablet devices
(Reuters, 2011). While plans fell through, there a
number of other players that are willing to take a
leading position on the tablet market in the country
because of the major expansion and huge potential
outreach.
China’s tablet market grew at 62.5% in the third quarter
of 2013 (Reuters, 2013). Apple device sales in 2012
were 1.6 million and reached 2.6 million in 2013. The
dominant device on the market is Apple’s iPad with
two-thirds of all sales. Apple has the largest share of
the market (71.4%), followed by Lenovo Group (10.5%).
The Chinese company Ereneben and Samsung
Electronics still remain in third and fourth place
respectively.
Mobile ready web
In 2013, a huge number of consumers in the AsiaPacific region reported that they own a mobile device
which allows Wi-Fi access (Webintravel, 2013). The
huge increase of ease of connectivity has caused a
considerable surge and expansion of traffic from mobile
devices.
In terms of mobile device usage patterns, text
messaging and SMS are still the predominant and most
popular activities among consumers. However, when it
comes to using the mobile ready Web, China differs
from other countries in several aspects. First, mobile
web browsing is very popular among consumers (75%).
In comparison to other countries, such as the US and
Brazil, mobile banking (42%) and mobile shopping
(43%) also take up a lot of mobile use time. Social
networking, location-based services and streaming
online music are other two major mobile activities that
are predicted to grow in popularity in the future
(Nielsen, 2013).
20
Mobile apps
The wide choice of applications is the main driver for
purchases of a specific mobile device in China. In
fact, 21% of consumers find this the most important
factor when buying a mobile device. This number is
larger in comparison to other countries, according to
Nielsen (2013). For instance, mobile apps availability
is considered important only by 8% of consumers in
India.
Good value for money and operating system come
next as factors that influence purchases of mobile
devices for Chinese consumers.
Apart from Americans, Chinese are the heaviest app
users. Games are the most popular types of apps in
China, with 70% of apps that consumers use on their
mobile devices. Maps and navigation apps come
second (63%), followed by weather apps (62%).
However, other types of apps, such as productivity
related apps, video, music, news, and finance related
applications, are also used more regularly than the
global average (Nielsen, 2013).
21
SOCIAL
MEDIA & UGC
Social Networking & UGC
Social Networking
China has managed to achieve 86% social media penetration rates,
despite ongoing internet restrictions in the country (comScore, 2013).
eMarketer (2013) estimated that the number of social media users will
reach 414 million by 2014 and a staggering 517 million by 2017. The
report predicts that China will be a leader and contribute to the highest
increase in social media users.
A study by McKinsey (2012) surveys 5,700 consumers in the country and
indicates that 95% of those living in Tier 1, Tier 2 and Tier 3 cities (higher
population, provincial capitals and higher income) are registered on a
social media site.
In many Asia-Pacific countries, the dominant social network is Facebook.
But some major markets have developed their own social networks,
which have become dominant over the international contenders. China is
of particular interest here, because Facebook and Twitter have been
inaccessible to users in the country since 2009, therefore the main social
networks vying for top spot are all homegrown Chinese language
versions. Qzone is the most popular at present, with approximately 40%
of the social media population using it (McKinsey, 2012). The platform
boasts an impressive user base of 531 million.
McKinsey’s survey (2012) reveals a few other
interesting observations. First, Chinese social-media
sites are already nearly as important as portals are as
an entry point to obtain content, with approximately
40% of users opting for social-media sites when
starting to explore content. Of course, search is still by
far the largest source of content, with 80 percent of
users taking advantage of that tool.
Mobile messaging applications are also gaining
popularity and could begin to threaten the dominance
of Weibo. Currently, WeChat is the most popular mobile
messaging application in China, surging in popularity
since its relatively recent launch in 2011.
The number of desktop and mobile microblog users is
growing rapidly. By the end of June 2012, the
penetration rate of microblogs has exceeded 50%
while the growth rate of microblog users has decreased
to below 10%. However, the growth of mobile
microblog users is still remarkable, from 137 million at
the end of 2011 to 170 million, up 24.2% (CNNIC,
2012).
Scale, of course, is also important. During the 2012
Olympic Games opening ceremony, Twitter recorded
almost 10 million related mentions, while Sina Weibo
recorded 119 million ((Sina Weibo, 2012). #DTTT Insights - China - thinkdigital.travel
23
Social media usage
Social Networking Penetration (%)
Social Media Demographics
77
79
UK
USA
57%
86
53
China
Japan
43%
19-
18%
25
12
%
0
%
3
31-35 3
60
3
40
26
40+
Social Networking reach is above global average,
but usage is still low and has a huge potential to
grow
19%
21%
Social Media Users by Age
Source: eMarketer, 2013
712 million
507 million
500 million
300 million
259 million
QZONE
TENCENT
SINA
WECHAT
PENGYOU
Source: Techniasia, 2013
24
Travellers and Social Media
Social Networking Patterns
Beginning with the rise of WeChat in mainland China,
mobile chat is the latest social networking phenomenon
to sweep across Asia-Pacific. Mobile chat networks Line
(Japan) and KakaoTalk (South Korea) are the two
leading contenders, while Chinese giant Qzone
continues to dominate the entire Asia-Pacific region in
terms of number of active users. However, with the ongoing growth of WeChat throughout the region, far
beyond its home market China, this situation is
expected to change during the remainder of 2013.
WeChat currently has over 300 million registered users,
making it 15% bigger than Facebook in the region (We
Are Social, 2013).
Chinese consume online content mainly through
desktop computers. However, they are moving quickly
to mobile devices. About 50% of mobile phone users in
McKinsey’s survey said they were planning to buy a
smartphone in the next six months, 35 percent said they
have used a tablet computer, and one-fourth of
consumers who do not own a tablet computer said they
plan to buy one in the next year (McKinsey, 2012).
All marketers are aware that social media is changing
the way people interact, in particular the way they plan,
book and manage travel. The Asia-Pacific region has
some of the world’s most socially connected travellers,
with over 70% of travellers from this region reporting
that they used social media channels to gather
inspiration for aspects of their future trips. This
compares favourably with the global average of 51%,
according to research from Text 100′s Digital Travel and
Tourism Index 2012 (Text100, 2012).
Travellers search social networks to gather information
about their destination before they make a purchase,
and also use information from social networks to
influence the way in which they make bookings and
transact with travel providers. In 2011, only about onethird of consumers in China considered online word-ofmouth as an important and reliable source for travel
information. However, trust levels are increasing, and
this share is expected to reach 50% in 2030 (Amadeus,
2013).
In parallel, apart from growing engagement on social
media channels, consumers are changing their attitude
towards sharing their travel experiences online. In fact,
according to the report by NH Hotels “The Social
Traveller in 2013” (2013), consumers in Asian countries
(including China, Indonesia and the Philippines) are the
most eager to share their travel experiences online.
25
Insights for Marketers
China has the world’s biggest population and is a highly
connected region, with a social media penetration rate
of 41% according to latest data. But the world’s biggest
market also presents a unique set of challenges. Now
that Orkut has finally succumbed to the might of
Facebook in Brazil, China remains the only significant
global market where the social networking giant has not
achieved dominance (and is not likely to in the
foreseeable future). There is good reason for this: access
to Facebook (and Twitter) have been restricted by
Chinese authorities since 2009. Access is now only
possible by means of a virtual private network, which
some, but not many, Chinese have. Instead, China has
developed its own social media landscape, consisting of
homegrown networks with unique usage patterns.
Language is another key factor to consider, as the
majority of Chinese social networking is conducted in
Mandarin or Cantonese. Producing content and
marketing messages in these languages is an absolute
necessity for accessing the Chinese market. As for
social networks, Sina Weibo is a key player to consider,
as are Qzone and WeChat. Marketers considering travel
marketing campaigns targeting the Chinese market
need to become au fait with these networks and
perhaps consider hiring a local agency for assistance.
26
eCOMMERCE
S
!
e
l
a
eCommerce
E-commerce Insights
E-commerce in China is flourishing. According to eMarketer (2012),
China is the largest e-commerce market in the world. While in the
rest of the world online shopping is usually driven by convenience,
online sales in China are dictated mainly by the much wider
availability of online products otherwise not accessible beyond Tier 2
cities (eMarketer, 2012).
As consumers become more comfortable with online shopping,
eMarketer estimated that their number will rise up to 220 million in
2013. This number shows that China will be the leading country in
eCommerce, as it will surpass countries such as the USA
(eMarketer, 2012)
China is also quickly growing the online portion of its ad spending,
which is set to reach $7.36 billion this year. Rapid growth in China
will help push Asia-Pacific past Western Europe to become the No.
2 region in the world for online ad spending in 2013. In 2014, this
growth will make China the second-largest online ad market in the
world, as it surpasses the UK and remains only behind the US.
Travel Planning and Booking
A report by eMarketer (2013) indicates that travel sales
have and will continue to play a major role in the
country’s e-commerce landscape. In January 2013,
digital travel sales brought a $6.5 billion revenue, which
represents a 20% increase compared to the previous
year, according to a report by eMarketer (2013). The
same study predicts that 2014 will see a 34.2%
increase with a total of $8.72 billion revenue from digital
travel sales. In the coming years, the total percentage
annual revenue will decrease, reaching 6% by 2016,
with a total of $10 billion revenue.
The online travel site Ctrip (2014) reports the results of a
survey of 3,000 respondents from more than 30
Chinese cities. The study investigated Chinese
travellers’ travel plans for 2014, including where they are
going, how much they are spending, and how they are
booking. More than half of the respondents stated that
they plan to take three or more trips this year, with 11%
answering that the total will be five or more. According
to Ctrip, the average number of planned trips has gone
up from last year’s survey.
A growing number of Chinese tourists prefer individual
travel. The survey found that 39% are planning to have a
self-organised trip. Mobile bookings through a travel
website went up dramatically: according to the survey,
39 percent said they would use a mobile app for
booking, which was 10 times higher than last year’s
survey. In addition, 93 percent said they would use
online booking, a number which may need to be taken
with a grain of salt considering the fact that Ctrip
administered the survey. 45% of consumers said they
would book by phone, and 17% said they would go
through an agency.
28
eCommerce in China
Top 5 countries, ranked by B2C e-commerce sales (2011-2013, billions)
400
43%
of China’s netizens
are interested in
products shared by
friends on social
networking sites
384.8
343.43
300
301.69
200
181.62
100
110.04
141.53
140.35
127.82
124.76
112.78
109.03
56.69
0
USA
38.08 47
China
2011
UK
2012
Japan
2013
53
Germany
Source: eMarketer, 2013
Online buyers in China (211-216, millions / % change)
30
500
22.5
375
15
250
7.5
125
0
2011
2012
% change
2013
2014
2015
Online buyers
2016
0
On average, each
social media user
follows at least 8
brands on social
networks
29
Mobile Commerce
According to further research by Accenture, consumers
in the Asia-Pacific region are keen to experiment with
new forms of m-commerce technology. For example,
70.3% of the respondents who are aware of mobile
NFC payments have expressed interest in adopting use
of this technology. About the same amount have
expressed interest in digital wallets (71.5%) and SMS/
MMS-based payments (72.5%). 70.7% of the
respondents across Asia-Pacific are ready to try out
social-networking-based shopping apps (Cellular News,
2011).
Furthermore, 69% of respondents in Asia-Pacific
preferred using mobile phones for most payments.
Chinese consumers led this total (76%) followed closely
by Indians (75%), followed by Koreans (56%) and
Japanese (47%). This contrasts strongly with the US
and Europe where, even combined, only 26% of
respondents favoured using mobile phones for most
payments.
When survey participants were asked if they had used a
mobile phone to make purchases in the past six
months, nearly half (47%) of Chinese consumers
indicated they had. In Asia Pacific, consumers surveyed
had scanned a product’s barcode while shopping to get
additional information; 36% had used a digital ticket to
gain admission to an event or to board a flight; while
31% had bought an item or received a coupon from a
‘smart poster’ containing an electronic barcode (Cellular
News, 2011).
When it comes to mobile advertising, consumers are
more likely to accept ads if they are delivered through a
simple text. According to the results from “The Mobile
Consumer” report by Nielsen (2013), Chinese are more
willing to accept mobile advertising than consumers in
other more saturated markets. Their survey identified
that 47% of consumers do not mind ads, if they provide
them access to free content.
The Mobile Consumer report (Nielsen, 2013) also
identifies the state of current mobile commerce.
According to the survey, the most popular type of
mobile advertising in China is through mobile apps
(38%), mobile websites (35%) and games (32%). Text
message ads, video advertising and location-based
services are less regular. In terms of frequency, 65% of
consumers reported that they receive ads at least once
a day.
Chinese consumers seem to have very positive attitude
towards mobile advertising. According to Deloitte
(2013), about half of mobile consumers researched for
more information after their received a mobile ad. There
seems to be a large opportunity for mobile marketing in
the country, as the same study shows that a large
number of consumers clicked on the provided link from
a mobile ad. As a result of a mobile marketing
campaign, almost one-third of consumers bought the
advertised product.
30
Social Commerce
Insights for Marketers
Asia-Pacific presents huge opportunity for European
marketers to expand their brands, if approached in the
right way for each individual market. But there is still
much room for improvement. According to research
from SP e-commerce, while Western retailers are fast
pursuing the Asia-Pacific online shopping audience,
they are not achieving optimal customer satisfaction.
For example, more than 50% of online foreign brands
still do not offer their online products in local currency.
97% do not have free returns and 91% do not have a
facility to exchange currencies (SP ecommerce, 2013).
To encourage more people to buy online, providing a
positive customer experience is key. Companies should
focus on improving customer relationship management
and rewarding customer loyalty. When customers are
happy with a brand, they often become ambassadors
for it by recommending to their friends and making
positive comments on social media. Therefore, the
customer should be the centre of every move the
company makes and should be satisfied in many
different ways to create an all-round positive
experience. Retaining existing customers is easier than
trying to win new ones.
One aspect of social-media usage in China makes the
country significantly different than other regions: social
media has a bigger influence on purchasing decisions
for consumers in China than for those anywhere else in
the world. Chinese consumers say they are more likely
to consider buying a product if they see it discussed
positively on a social media site, and more likely to
actually purchase a product or service if a friend or
acquaintance recommends it on a social media site.
This can be explained at least in part by a cultural
difference: Chinese consumers disproportionately value
peer-to-peer recommendations, as the Chinese are
more skeptical of formal institutions (McKinsey, 2012).
Travel brands that wish to tap into this growing market
will need a sound knowledge of the peculiarities of the
Chinese legislative environment as well as the country’s
consumers, if they are to operate successfully. The
social media scene in China stands out in that it has a
greater influence on purchasing decisions than in other
markets. This is attributable to the fact that most
shoppers in China are sceptical of formal authority.
Thus they tend to over-value the advice of opinion
leaders on social networks.
31
SUMMARY
Key Take Away Messages
More Country Reports
If you have little time to go through the report in more
detail, here the key take away messages that you need to
have in mind if you want to understand the local digital
dynamics:
It is always a good idea to stay informed and now you can
obtain our regional reports, which provide an overview of
the current and future digital trends in selected countries.
If you liked this country report, you can also have a look at:
• China has the largest online population in the
world.
• United States #DTTT Market Report
• Brazil #DTTT Market Report
• Baidu is the biggest search engine in the
country.
• Russia #DTTT Market Report
• The most popular social networking site is Qzone
with 712 million users in 2013.
• India #DTTT Market Report
• Mobile is getting more and more popular with 79%
of users accessing the Web through a
mobile device.
• Chinese are very active on social networks and
influenced by recommendations and
reviews before purchasing products online.
33
Read more
Amadeus, 2013. Asia Pacific poised to leapfrog the world in travel technology and infrastructure. See: http://www.amadeus.com/blog/13/06/asiapacific-poised-to-leapfrog-the-world-in-travel-technology-and-infrastructure/
Cellular News, 2011. Interest in Mobile Phone Payments Strong Despite Security and Privacy Concerns. See: http://www.cellular-news.com/story/
47912.php
China Internet Watch, 2012. Chinese Search Engine Marketer: Stats, Trends, and Insights. See: http://www.chinainternetwatch.com/category/
search-engine/
China Internet Watch, 2013. China Mobile Marketing Insights. See: http://www.chinainternetwatch.com/category/search-engine/
CNNIC, 2013. CNNIC 32nd Annual Statistical Report. See: www1.cnnic.cn/AU/MediaC/rdxw/hotnews/201307/t20130722_40723.htm
CNNIC, 2014. CNNIC 33rd Annual Statistical Report. See: http://www1.cnnic.cn/AU/MediaC/rdxw/hotnews/201401/t20140117_43849.htm
comScore, 2013. 2013 China, Taiwan, Hong Kong Digital Future in Focus. Download report: http://www.comscore.com/Insights/Press_Releases/
2013/10/comScore_Releases_the_2013_China_Taiwan_Hong_Kong_Digital_Future_in_Focus_Report
Council of Foreign Relations, 2014. Media Censorship in China. See: http://www.cfr.org/china/media-censorship-china/p11515
Ctrip, 2014. Chinese Travel Willingness Survey (in Chinese). See: http://www.199it.com/archives/186710.html
Deloitte, 2013. Global Mobile Survey. See: https://www2.deloitte.com/content/www/global/en/pages/technology-media-and-telecommunications/
articles/2013_GlobalMobileSurvey.html
eMarketer, 2012. China’s Ecommerce Market Joins the Majors. See: http://www.emarketer.com/Article/Chinas-Ecommerce-Market-Joins-Majors/
1009466
eMarketer, 2012. Mobile Search Flexes its Muscles in Asia-Pacific. See: http://www.emarketer.com/Article/Mobile-Search-Flexes-Its-Muscle-AsiaPacific/1009300
eMarketer, 2013. Ecommerce Sales Topped $1 Trillion for the First Time in 2012. See: http://www.emarketer.com/Article/Ecommerce-SalesTopped-1-Trillion-First-Time-2012/1009649
eMarketer, 2013. Social Networking Reaches Nearly One in Four Around the World. See: http://www.emarketer.com/Article/Social-NetworkingReaches-Nearly-One-Four-Around-World/1009976
Euromonitor, 2010. Socioeconomic impact of growing Internet usage. See: http://blog.euromonitor.com/2010/05/qa-socioeconomic-impact-ofgrowing-internet-usage.html%22%20%5Ct%20%22_blank
Euromonitor, 2011. Expanding middle class and digital technology drive China’s market to a new level. See: http://blog.euromonitor.com/2011/08/
expanding-middle-class-and-digital-technology-drive-chinas-beauty-market-to-a-new-level.html%22%20%5Ct%20%22_blank
Forbes, 2013. China Says Broadband Speeds of 20Mbps by 2015. See: http://www.forbes.com/sites/kenrapoza/2013/08/18/china-saysbroadband-speeds-of-20-mbps-by-2015/
34
Index Mundi, 2013. China Demographics Profile 2013. See: http://www.indexmundi.com/china/demographics_profile.html
Internet World Statistics, 2010. Top 10 Internet Languages. See: http://www.internetworldstats.com/stats7.htm
Internet World Stats, 2012. Asia Internet Use, Population Data and Facebook Statistics. See: http://www.internetworldstats.com/stats3.htm#asia
InternetWorldStats, 2012. Top 10 Internet Countries by users. See: http://www.internetworldstats.com/top20.htm
King, Gary, Jennifer Pan, and Margaret E Roberts. 2013. How Censorship in China Allows Government Criticism but Silences Collective
Expression. American Political Science Review 107, no. 2 (May): 1-18. Copy at http://j.mp/LdVXqN
McKinsey, 2012. China’s social media boom. See: http://www.mckinsey.com/insights/marketing_sales/chinas_social-media_boom
Mitra, Sramana, 2014. Baidu and Alibaba Delivering on China’s Mobile Explosion, One Million by One Million Blog. See: http://
www.sramanamitra.com/2014/03/11/baidu-and-alibaba-delivering-on-chinas-mobile-explosion/
NH Hotels, 2013. The Social Traveller in 2013. Download report: http://territoriocreativo.es/Social_Traveler_2013.pdf
Nielsen, 2012. The Asian media landscape is turning digital. Download report: http://www.nielsen.com/content/dam/corporate/au/en/reports/2012/
changing-asian-media-landscape-feb2012.pdf
Nielsen, 2013. The Mobile Consumer. Download report: http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2013%20Reports/
Mobile-Consumer-Report-2013.pdf
Open Society Foundations, 2013. Mapping Digital Media: China. Download report: http://www.opensocietyfoundations.org/reports/mapping-digitalmedia-china
Pew Research, 2014. Emerging Nations Embrace Internet, Mobile Technology. See: http://www.pewglobal.org/2014/02/13/emerging-nationsembrace-internet-mobile-technology/
Reuters, 2011. Dell and Baidu team up for tablets, mobiles. See: http://www.reuters.com/article/2011/09/06/us-dell-baidu-idUSTRE7850C820110906
Reuters, 2013. China’s tablet market grows 63 pct in Q3; Apple is king. See: http://cn.reuters.com/article/companyNewsEng/
idCNL4N09814A20121128
Sina Weibo, 2012. Microblogging and the Olympics (in Chinese). See: http://e.weibo.com/1642909335/yuy8CfU6I?ref=http://www.techinasia.com/sinaweibo-olympics-opening-ceremony/%22%20%5Ct%20%22_blank
SP ecommerce, 2013. The rise of the new ecommerce powerhouse. See: http://bambooinnovator.files.wordpress.com/2013/06/fashion-ecommerceasia-infographic.png
Techniasia, 2013. China’s Top 10 Social Media Sites (Infographic). See: http://www.techinasia.com/2013-china-top-10-social-sites-infographic/
Text100, 2012. Digital Index Travel and Tourism. See: http://info.text100.com/travel-tourism-digital-index-2012/info.text100.com/travel-tourism-digitalindex-2012.html
35
We Are Social, 2013. Internet Consumption Around the World. See: http://wearesocial.sg/tag/sdmw/
We Are Social, 2013. Social, Digital and Mobile in China. See: http://wearesocial.net/blog/2013/01/social-digital-mobile-china-2/
Webintravel, 2013. Travellers in Asia lead surge to online bookings. See: http://www.webintravel.com/news/travellers-in-asia-lead-surge-to-onlinebookings_3736
#DTTT
Insights - China - thinkdigital.travel
www.etc-digital.org
36
The Digital Tourism Think Tank is an international knowledge hub
that aims to provide thought leadership to the tourism industry in
digital marketing best practice. This project was created by Nick
Hall, Managing Director at SE1 Media, who has more than 10 years
experience working in digital tourism marketing, both in the
marketing sector and in the tourism industry.
Nick is supported by his team at SE1 Media, who have a great
experience in the tourism industry as well. In addition, The Digital
Tourism Think Tank puts together a team of experts in diverse and
varied fields of the tourism industry.
The Digital Tourism Think Tank comprises special features including
interviews with industry experts and DMOs, best practice guides and
reports, a programme of events and workshops and the Digital
Tourism Brand Index
www.thinkdigital.travel
Twitter @think_tourism
facebook.com/DigitalTourismThinkTank
#DTTT Insights - China
- thinkdigital.travel
www.etc-digital.org
37

DTTT Market Report - China - Digital Tourism Think Tank

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