In 2019, mobile continues to lead China internet. The top mobile apps in China by total MAUs are still led by WeChat, Alipay, QQ, Taobao, iQiyi, and Tencent Video while TikTok continues fast growth and ranks the 7th. Tencent has the highest internet user penetration of 97.3% in China in September 2019, followed by Alibaba, Baidu, and ByteDance. Find a comparison of the four here.
Leading Chinese internet companies are building their own mini-program ecosystem; Tencent’s WeChat, Alibaba’s Alipay, and Baidu’s smart program in the leading positions. ByteDance’s also building on its own ecosystem on TikTok and Toutiao.
China has issued new regulations banning online video and audio providers from using artificial intelligence (AI) and virtual reality technologies to create fake news and content.
The shipment of China’s smartphone market was about 98.9 million units in Q3 2019, down 3.6% year-on-year. Huawei leads China’s smartphone market in Q3 2019 with 41.5 million units in shipment, an increase of 64.6% YoY. Vivo, Oppo, Xiaomi and Apple rank the second to the fifth.
Awareness of Chinese brands in international markets has declined over the past three years. The “Brand Power” of leading Chinese brands is up 15% year-on-year, compared with 5% growth last year. “Brand Power” is rising fastest in Japan, France, and Spain, representing emerging hubs of growth, according to the BrandZ™ Top 50 Chinese Brand Builders 2019 report.
Alibaba has been crowned the most valuable brand in China for the first time in the annual BrandZ™ Top 100 Most Valuable Chinese Brands ranking, having grown its brand value by 59% year-on-year to US$141 billion.
The total value of the Top 100 Most Valuable Chinese Brands increased by 30% to US$889.7 billion, the highest annual rise since the ranking launched in the year 2011.
By 2030, 58% of Chinese households are expected to be in or above the mass-affluent class, exceeding today’s 55% South Korean share according to McKinsey. Urban Chinese consumers’ spending profile converges with their counterparts’ spending profile in cities around the world.
Top articles on Chinese consumers include:
- Men’s beauty market in China looks to be more promising
- Chinese post-95s spent 80% more buying overseas
- Consumption habits of China’s post-90s generation
- 22 FMCG companies reaching over 100 million urban Chinese households in 2019
- China Generation Z overview 2019
Vlog has become the new theme of user growth competition on several video platforms in China. Vlog can be regarded as a kind of “video log” with popular themes of travel, food, pets and etc. Its production is relatively simple, the creator uses the camera to record what he sees and thinks in his daily life, and then through later editing, with music, text or stickers, can produce a Vlog.
China’s search engine companies’ revenue is estimated to reach 158.08 billion yuan (US$22.98 bn) in 2019 and 183.17 billion yuan (US$26.63 bn) next year. But Baidu fell to the third by digital advertising revenues following Alibaba and ByteDance.
Tencent launched several different social ads formats including the Nearby Ads for SME retailers on WeChat Moments.
China Social Media
In 2019, the top rising social media is no doubt ByteDance’s short video leader TikTok. Short video penetration exceeded 70% in 2019 with 810 million active users in Sep.
WeChat launched its own version of “Facebook Stories”. WeChat launched two new sections -“Time Capsule” and “Top Stories”- and several news features for WeChat iOS 7.0 on December 21, 2018. That’s the biggest upgrade since version 6 four years ago and one big move into the short video market.
Xiaohongshu received most attention in 2018 but faced a rough year in 2019 with its app removed from every major app store” in July. It will launch live broadcasting feature next year. Read our latest insights on how Xiaohongshu successfully pivoted its growth and product strategies.
The most popular articles on social media:
- Stories behind China’s super app WeChat, told by its founder
- ByteDance: A Chinese Mobile App Factory
- Audi used competitor Infiniti’s creative in a video ad on WeChat Moments
- Top short video apps compared: Tik Tok vs. Kwai – Part 1 Platforms
- China social media users compared: Weibo vs WeChat vs Momo
China E-commerce & Retail
Taobao, Tmall, and JD have the broadest user reach than other e-commerce platforms in China. Nevertheless, Pinduoduo is the only platform with more low education background users. Both Amazon and Dangdang are much less popular among users with middle school education or lower. Read our online shopper trends for 2019 here.
This year’s Tmall 618, there were hundreds of domestic and foreign brands whose sales exceeded last year’s Double 11, with the highest growth rate exceeding 40 times.
Alibaba set a new record of Double 11 in 2019 again with full-day sales on Tmall of 268.4 billion yuan (US$38 billion), the largest annual shopping festival in China. There were 299 brands who reached RMB 100 million in GMV, including Apple, Nike, Estee Lauder and Giorgio Armani. Find out the best-selling brands here.
The number of mobile payment users has reached a saturation point in 2019, and the growth is drawing to a close. The penetration rate is 95.1%. The annual transaction volume of third-party mobile payments reached 183.79 trillion Yuan, an increase of about 20.3% over the previous period. The annual number of transactions reached 1.17 trillion, an increase of about 12.8%.
Following the adoption and popularity of mobile payment, China supermarkets are growingly more intelligent with technologies such as face recognition, IA, AR, O2O, etc. WeChat recently shared a vision of its technology integration with supermarkets in the future.
Live Broadcast for E-Commerce
Live broadcasting has become an important channel for e-commerce sales in 2019 and will continue to grow. A total number of 81 live rooms on Taobao Live reached 100 million yuan sales; a total of 5 organizations broke 1 billion yuan sales. Taobao Live aims to deliver 500 billion yuan sales in the next three years.
Tencent launched a live broadcasting tool for WeChat Official Account (OA) in March 2019, currently supporting audio and video broadcast. Influencing WeChat OA can utilize their fanbase on WeChat, in combination with quality live broadcasts, to drive e-commerce sales.
Though still in the testing phase, Tencent Live integrates live streaming with its mini program. Brands can embed HTML5 based products on its mini program as an entry to its live streaming. Followers and fans can click to open Tencent Live to watch live streaming.
Kuaishou, also known as Kwai, announced its daily active live broadcasting users exceeded 100 million. 56% of Kuaishou anchors are post-90s.
Social E-commerce & Mini Programs
Social e-commerce in China has much higher conversion rates than traditional ones. Social e-commerce providers recharge their trust through social currency, which means that product recommendations from WeChat friends naturally have a social trust foundation.
The number of e-commerce transactions on WeChat mini-programs increased by 27 times year-on-year in the first half of 2019,
In Becky’s initial WeChat e-commerce mini-program launch in December 2017, the transactions exceeded one million yuan in 7 minutes and nearly 3 million yuan sales in 113 minutes according to WeChat Advertising. Since then, it has been able to maintain a million transactions in the first minute of new product launches. Read her story here.
Short Video for E-Commerce
TikTok signed a 7-billion yuan agreement with Taobao including 6 billion yuan ads and 1 billion yuan commission according to leaked news online. TikTok denied the accuracy of those numbers but the news got the attention of many in the e-commerce market.
During China’s mid-year shopping festival 618, active TikTok shopping cart user ratio exceeded 68%. The top 30 users referred over 400 million yuan worth of products sales.
Top articles in e-commerce and retail:
- How Tmall played a vital role in China’slargest wool and textile enterprise
- Taobao to enable farmers to find new markets and customers
- Introduction to Xiaomi’s e-commerce platform Youpin
- Alibaba’s Hema penetrating low-tier cities with Hema Mini supermarket
- Huawei turning its smartphones to POS machines
- China’s cross-border e-commerce users overview 2019
On average an outbound Chinese tourist plans to spend US$6,706 traveling overseas in 2019, up 15% from 2018. Product quality became the second most important factor to consider when shopping abroad. 69% of outbound Chinese tourists made purchases on their mobile phones in 2018.
China’s emerging Gen-Y’s complete travel experience journey has five stages: dream, plan, book, experience, and share. Get an overview of emerging Gen-Ys’ power, how they re-shape China’s travel market, stages of their travel journey, and how to get ready here.
Sightseeing (around 50%) and vacation (over 40%) were the two main driving force for traveling. Self-guided travelers spend less compared with travelers with guided tours. Self-guided (free and easy trips) travelers spend more on transportation and accommodation than those with guided tours.
Top articles in tourism:
- China Golden Week Tourism Trends & Insights 2019
- The emerging Gen-Y for China’s travel market
- Outbound Chinese tourists mobile payment usage 2019; average spend US$6,706
- Rising outbound travelers from lower tier cities in China
- China outbound tourism insights 2019
Annual subscribers can download McKinsey Consumer Trends Report 2020 here.