austria connect china digital · 2014-11-04 · austria connect china digital shanghai, october...

DIGITAL WORKSHOP © AQUARIUS 2014 1

AUSTRIA CONNECT

CHINA DIGITAL

Shanghai, October 24th 2014


China’s population is now 1.3 billion 19% of world population

the World population is just over 7 billion

million 618 million netizens 45% of the population is online

242 million netizens purchase online Apparel Electronics Luxury items Media

Other (including travel, real estate, personal finance)

42.1% of them shop more than once a

week (twice the rate vs. the US)

625 millionen active social media user with in average 2.3 social media profiles


4.

STRATEGY

5.

ROADMAP

• In 2013 China’s Internet

penetration has made

another big leap and now

(Q1 2014) stands at 618

millions.

• That is 45,8% of China’s

population and 23% of the

Global Internet Population.

INSIGHT

• China has caught up with

developed nations around

the world and users now

demand value and not just

access.

Source: CIA Factbook 03/2014, World Internet Statistics, mobiThinking

ONLINE CHINA

INTERNET PENETRATION CHINA / GLOBAL


4.

STRATEGY

5.

ROADMAP

• Whilst internet access is still

concentrated in the big

Eastern cities, recent

government programs to

connect rural China (WiFi in

18,000 villages, 5,000

schools until June 2014)

have given an additional

boost to China’s internet

penetration rate.

INSIGHT

• Chinas top metropolitan

areas have reached top

nation levels.

• Government programs will

swiftly carry broadband

access to the countryside

RANK CITY INTERNET

USERS

INTERNET

PENETRATION

(%)

1 Beijing 15.560.000 75.2%

2 Shanghai 16.830.000 70.7%

3 Guangdong 69.920.000 66.0%

4 Fujian 24.020.000 64.1%

5 Tianjin 8.660.000 61.3%

6 Zhejiang 33.300.000 60.8%

7 Liaoning 2.4530000 55.9%

8 Jiangsu 40.950.000 51.7%

9 Xinjiang 10.940.000 49.0%

10 Shanxi 17.550.000 48.6%

TOTAL CHINA 61.7580.000 45.8%

Source: Network Information Center (CNNIC) 32st Statistical reports on Internet Development China

ONLINE CHINA

REGIONAL ACCESS


• Over 1/3 of Chinese access

the internet through a

mobile device such as

smartphones and tablet

PCs.

• With more affordable

mobile data plans becoming

available in mid 2013

browsing via PC and laptop

has dropped sharply..

INSIGHT

• Most mobile traffic comes

from social media usage

(especially instant

messaging)

• Keeping in touch with all

Bosch audiences needs to

be optimized for smart

phones (CRM & social)

Q1 2014

YOY

GROWT

H

China Total Population 1,385 M

Mobile Phones (88%)

1,200 M 2G 800 M

3G 400 M

4G just launched

Internet Population (45%) 618 million +9.5%

Social Media User (45%) 625 million +18,2%

Mobile Access (G3, Smart Phones, Tablets)

(37%) 700 million +20%

Desktop; 28,70%

Labtop; 16,90%

Mobile; 73,30%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

90,00%

2010,12 2011,6 2011,12 2012,6 2012,12 2013,6 2013,12

% of internet

traffic

ACCESS

TRAFFIC

Source: www.chinainternetwatch.com, CNNIC 01/2014

MOBILE CHINA

MOBILE ACCESS


4.

STRATEGY

5.

ROADMAP

• 20 to 40 year olds make for

50% of online users.

• Internet became more

popular in middle aged and

old people, which became

the main source for growth

of Internet users in China

• Students are the largest

group of Internet users,

accounting for 26.8% of the

total Internet users.

• The percentage of people

of individually owned

business/ freelancers

ranked the second reaching

17.8%

INSIGHT

• The Internet in China has

become the place fore

people who want to make

it in life

56%

44%

0

5

10

15

20

25

30

35

below10

10-19 20-29 30-39 40-49 50-59 60 andabove

2012

2013

OCCUPATION

AGE STRUCTURE

0

5

10

15

20

25

30

2012

2013

Source: Network Information Center (CNNIC) 32nd, Statistical reports on Internet Development China

WHO IS ONLINE

USER DEMOGRAPHICS


4.

STRATEGY

5.

ROADMAP

• 1/3 of users have monthly

income between 2000 –

5000 Yuan

• 1/3 of users have monthly

income below 1000 Yuan

• The continuous decline of

prices increased the

popularity of mobile devices

amongst low income

people.

INSIGHT

• The elites in China have

been connected for a

couple of years

• Web access and usage

become mainstream.

0 5 10 15 20

Over 8000 Yuan

5000 - 8000

3000 - 5000

2000 -3000

1500 - 2000

1000 - 1500

500 - 1000

Below 500

No Income

2013

2012

INCOME

Source: Network Information Center (CNNIC) 32nd, Statistical reports on Internet Development China

WHO IS ONLINE

USER DEMOGRAPHICS


What are the Chinese doing online?

Reading News: 73%

Listening to Music: 76%

Shopping Online: 43% and GROWING!

Searching: 80%

Weibo-ing: 51%

Blogging: 66%

Social Sites: 47%


• Users constantly check

their phone for news and

post on their social profiles

• Longer sessions occur

whilst commuting,

• Watching videos on a

mobile device at home or

at he café (WiFi) becomes

normal.

INSIGHT

• Cross device usage (PC,

Tablet, Mobile) becomes

the norm calling for a

consistent user

experience.

• Next to news and

entertainment, local useful

content that makes life

easier becomes more

important.

MOBILE USAGE JAN

2014

-0.5h 0.5 - 1h 1 - 3h 3 - 5h 5 - 8h +8h

2.6%

10.9%

35.1%

29.5%

11.6% 10.3%

% of

users

40%

30%

20%

10%

time

spent

TIME SPENT

96% Smartphone users

searching for local

information via

their phone


researching

products via

phone


who have made a

purchase via their

phone

LOCAL PRODUCTS BUYIN

G

Source: Google, “Our Mobile Planet” Report, 02/2014

ONLINE BEHAVIOUR


• The gap between accounts

and active users is

widening

• User have moved on to

WeChat and are more

difficult to address

• Gaming has become mobile

(incl.tablet games) and

social.

• Users spend more time on

mobile socila media, but in

smaller incrememts.

MOBILE SOCIAL MEDIA

BEHAVIOR

0 20 40 60 80 100

Any social network

SINA WEIBO

QZONE

TENCENT WEIBO

TENCENT

YOUKU

Used in the past month

Own an account

1h30m Average time

users spend on

social media each

day

51% Percentage of

mobile users using

social media apps

24% Percentage of

mobile users using

location based

services

TIME

SPENT MOBILE SOCIAL LOCAL

INSIGHT

• Bosch contents need to be

optimised for fast

consumption and sharing

RATIO BETWEEN REGISTERED AND ACTIVE ACCOUNTS JAN 2014

%

Source: GlobalWebIndex, Wave 11, 2013/14

ONLINE BEHAVIOUR


Internet is much better received compared to general population, as a more

credible source of information.

Source: CNRS

27%

24%

7% 6% 6%

4% 3% 3% 3%

15%

30%

5% 4%

5%

3% 3%

5%

2%

Internet Newspaper In bus LCD Magazine HypermarketLCD

OOH LED In building LCD Radio Subway ads

Youth General Population

Reliability of Info Received from …

ONLINE BEHAVIOUR


Social Network

Mobile Social

Pinterest

Wiki Site

e-Commerce

Instant Messaging

Search Engine

Microblog

Video and

Music

WESTERN EQUIVALENT CHINA

DIGITAL LANDSCAPE IN CHINA

© 2013 Aquarius Asia Ltd.


Social Network

Mobile Social

Pinterest

Wiki Site

e-Commerce

Instant Messaging

Search Engine

Microblog

Video and

Music

WESTERN EQUIVALENT CHINA

The key digital platforms in the Western world are blocked and not

readily available in Mainland China.

The digital and social media landscape in China is even more fragmented and complex than in the Western

world.

As China continues to experience rapid growth and change, the

landscape will continue to evolve and may look very different a year

from now…

…therefore, you must adopt a “local e-Strategy.”

© 2013 Aquarius Asia Ltd.

DIGITAL LANDSCAPE IN CHINA


China’s digital environment is

the only one in the world that

has no single comparison to

the other markets.

China needs to be treated –

from a platform POV –

completely separate.

ASIA // CHINA


• Different social-media sites

attract different kinds of

users. For example,

consumers who favor Sina

Weibo tend to be in higher

income brackets, earning

more than 8,000 RMB (about

$1,300) a month, and are

much more likely to live in

Tier 1 cities.

625.000.000

people use one or

many of these

channels

Fa

rmin

g

Fis

hin

g

PC

only

Circle of mixed

platforms: PC

+ Mobile

SOCIAL MEDIA - PLATFORMS

CHINA SOCIAL MEDIA CLUSTER


MAIN SOCIAL MEDIA CHANNELS COMPARED

BY REACH & LEVEL OF ACTIVITY

Weibo, Douban and WeChat are the main 3

channels to make contact with Chinese consumers

and stay in contact with those who matter.

0

100000000

200000000

300000000

400000000

500000000

600000000

Weibo RenRen Douban WeChat Youku

Accounts

Daily Unique Visits (x10 toshow)

Daily Page Views

Daily Posts

daily

video

views

but only 281M

active users (-

9% YOY)

+1200%

Source: CNNIC, 33rd Report, 2014

• Sina Weibo is still the

dominant social media

channel in terms of

accounts and daily

buzz.

• WeChat growth is

impressive but daily

activity is a blackbox.

• Youku has in video

views what Weibo has

in page views.

• Douban has a less

mainstream user base

Y remains of interest for

deeper engagement

with creative minds.

• The user conversations

as well as sharing shift

to mobile (on Weibo &

WeChat) and linking

needs for cross-device

optimization of the eco-

system.

Insight

SOCIAL MEDIA - PLATFORMS


With the tremendous growth of social media

networking, “Entertainmentalization” has

become a very popular topic on Chinese

websites.

Many brands use online gaming to engage

with consumers, enhance onsite experience

and to increase brand awareness (i.e.

Tropicana in HAPPY FARM).

VISUALLY ATTRACTIVE DESIGNED FOR CLICKS ENTERTAINMENT

FOCUS 70% of Chinese internet users are aged 30

and under. They are young, open and adapt

new trends quickly.

Attractive and Flash animation elements have

been heavily used for most websites to cater

for this audience group. This can be seen on

campaign mini-sites and official corporate

websites.

Typing Chinese is totally different when using

a Latin alphabet-based keyboard. It is

comparatively slow when typing Chinese in

search boxes.

To facilitate faster page navigation and search

results, most Chinese websites present more

direct content on a single page when

compared to Western designs. To the

Western eye, Chinese pages appear busy and

cluttered, but are designed to induce more

clicks.

70% access the internet via mobile devices

More than ONE billion social media accounts

DIGITAL DIFFERENCES IN CHINA


SEO and the Chinese brand name The Chinese brand name should be included on the new website wherever possible.

SEO measures should include the Chinese brand name in the “page titles”, “page descriptions”, “alt text”

and wherever keywords are listed on the page.

ICP license ICP (Internet Content Provider) license in China is a permit issued by the Chinese Ministry of Industry and

Information Technology to permit China-based websites to operate in China. All websites with their own

domain name that operate inside China are required to obtain a license, and China-based Internet service

providers are required to block the site if a license is not acquired within a grace period. Licenses are issued

at the provincial level.

Benefits: Having an officially ICP licensed site allows for quicker load times. This provides a better user

experience and mitigates site abandonment. Furthermore, e-CRM (Direct User Communications, e-

Newsletters, user / member data collection, etc.) efforts in China are more successful with ICP licensed

sites as visitors feel more secure when sharing their personal contact information. Lastly, the Chinese

government are more likely to ban sites that are not ICP licensed.

Chinese website domain (.CN) and local hosting In order to have a dot-CN domain name and local hosting, the company must obtain a ICP license for the

website. China’s “Great Firewall” can wreak havoc on site performance when the company’s website is hosted

outside of China. This also exposes the company’s website to a higher change of being blocked by the

Chinese government.

DIGITAL DIFFERENCES IN CHINA


What are the Chinese buying online?

Online shoppers mostly buy

Apparel

Footwear

Bags

Consumer electronics

Appliances

Personal care products


Why are the Chinese buying online?

Why buy online… Why not…


The opportunity you cannot

afford to miss…

ASIA // CHINA


China's Commerce Minister Chen Deming:

“China is expected to become the

World's largest consumer market in 2015.”

The volume of consumer retail sales

will surpass 5 trillion U.S. dollars in 2015

amid an accelerated urbanization rate

and the rise of people's incomes.”

Source: Chen Demining at the opening ceremony of the first Beijing International Fair for Trade in Service


Source: Techinasia.com

Online buyers and B2C e-Commerce in China

Number of online buyers in China B2C e-Commerce Sales

178,4

219,8 242

322,1

374,9

423,4

0

50

100

150

200

250

300

350

400

450

2011 2012 2013e 2014e 2015e 2016e

55,4

107,5

177,4

284,8

372,7

457,6

0

50

100

150

200

250

300

350

400

450

500

2011 2012 2013e 2014e 2015e 2016e

By 2015, e-Commerce will represent 7.4% of China’s total retail value

millions billions

E-COMMERCE

E-COMMERCE IS BIG AND GETTING BIGGER!

With over 240 million Chinese online shoppers, the rate of spending is equal to US$40,000 per

second. Number of online buyers in China has grown dramatically in a short period of time.

B2C e-Commerce Sales also shows amazing growth.


Growth of Online Shopping

- Total vs. Mobile

Source: CNNIC

ONLINE SHOPPING IS GROWING FAST, EVEN MORE ON

MOBILE

It has become a general trend amongst netizens and starts showing strong impact on

their overall purchase behavior (vs. Offline purchase in actual stores)

242

322

55

144

13,2%

28,9%

42,9%

52.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

250

300

350

2012 2013

Online Shopping population Mobile Online Shopping population

Mobile Online shopping penetration% Online shopping penetration%

Unit: Million

E-COMMERCE


8,3%

13,4%

21,3%

39,7%

1,6%

30,7%

22,6%

62,2%

Y2013

Y2012

Make more

purchase online

Make more

purchase offline

No difference

Have not made any

purchase

Shopping Behavior Change

amongst Netizens

Source: CNNIC

ONLINE SHOPPING IS GROWING FAST, EVEN MORE ON

MOBILE

It has become a general trend amongst netizens and starts showing strong impact on

their overall purchase behavior (vs. Offline purchase in actual stores)

E-COMMERCE


57%

51%

51%

51%

49%

48%

48%

46%

46%

46%

45%

74%

61%

57%

52%

57%

69%

57%

64%

57%

43%

56%

8%

19%

20%

23%

23%

18%

25%

20%

26%

33%

26%

Clothing/Accessories/Shoes

Tours/Hotel Reservations

Mobile Phone

Electronic equipment (TV/Camera etc.)

Sporting Goods

Ariline ticket/reservations

Personal Care (deodorant, shampoo, lotions, etc.)

Hardcopy Books

Groceries (food and beverages)

Computer Hardware

Cosmetics

Will Not Shop or Purchase This Category Online Will Purchase Online Will Shop Online

Source: Nielsen August 2014

There is a huge opportunity for

retailers to create an omni-

channel experience for

consumers.

Durable and entertainment-

related categories like clothing

and airline tickets have a

strong intention of online

shopping.

Consumable products like

groceries are not as strong as

non-consumable categories

probably due to safety or

transportation issue.

Compared with other

countries, Chinese consumers

prefer to browse and purchase

online for try-before-buy

products such as mobile,

sporting goods.

DO YOU PLAN TO SHOP FOR OR PURCHASE THE FOLLOWING CATEGORIES

USING AN ONLINE DEVICE (COMPUTER, TABLET, MOBILE, ETC.) IN THE NEXT 6

MONTHS?

E-COMMERCE


ON AVERAGE, ONLINE SHOPPERS VISIT SHOPPING WEBSITES TWICE A DAY, AT

HOME / AFTER MEAL / BEFORE SLEEP … TO FULLFIL THEIR PURCHASING NEEDS.

When Do You Shop Online

Amongst online shoppers

9%

11%

13%

14%

34%

56%

60%

83%

Before get up in the morning

When waiting/in a queue

When having meal

On the move

When working/in class

Before go to bed

After meal

During leisure time at home

Source: CNNIC

Online Shopping Behavior

- Surfing vs. Placing order

68%

28%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Avg. times of surfing for onlineshopping per month

Avg. times of placing order permonth

Conversion

rate to

Transaction:

40.3%

E-COMMERCE


Comments/reviews from purchasers and reputation of the shopping website are critical

to purchase decision, esp. for categories consumers are less familiar with.

While price and past shopping experience are also considered when consumers doing

online shopping for products of high familiarity

4,3%

7,4%

8,1%

5,2%

8,8%

28,0%

37,5%

6,1%

8,0%

8,3%

13,2%

16,8%

22,2%

25,0%

Promotion, with free gift or not

Speed of delivery and aftersale service

Brand of the website

Purchase experience in the past

Price

Fame & Reputation of the website

Comments/Reviews from purchasers

Factors considered when purchasing familiar categories/products

Factors considered when purchasing UNFAMILIAR categories/products

Factors Influencing Purchase Decision

Source: CNNIC

E-COMMERCE


SoMe is becoming an influence on purchase decision amongst online shoppers.

42.1% of P6M online purchase is made on products using SoMe, reaching RMB

1,364.

Source: CNNIC

51,2%

3,8%

4,3%

6,5%

12,3%

15,8%

37,5%

None of the above

爱乐活（http://www.leho.com）

堆糖网（http://www.duitang.com）

爱逛街（http://guang.com/）

美丽说（http://www.meilishuo.com/）

蘑菇街（http://www.mogujie.com）

Weibo (Sina, Tencent, etc.)

USE OF ONLINE SHOPPING GUIDE

68% 76%

33% 23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Have made purchase after readingproduct info on SoMe

Have re-posted product/sales infoand @ friend(s)

NO YES

ONLINE SHOPPING ON SOME

E-COMMERCE


Why

e-Commerce

in China?

ASIA // CHINA


Why in China

Immediate access to over 625 million customers

Quickly, easily and with minimal investment expand your sales into

the world’s 2nd largest economy

Chinese consumers have embraced online shopping as evidenced

by the over 1.3 trillion RMB spent in 2012

…estimated to be even higher next year

Tmall and JD.com are the preferred shopping portals with over

77% of the market, and the number of loyal users keeps growing

If they are not buying from your online store than they are buying

from your competitors…get in on the action!


1.3 trillion RMB in online spending and growing

Tmall; 57,1% JD.com, 20.1%

Tencent B2C; 4,0%

Suning.com; 3,8%

Amazon.cn; 2,8%

VANCL; 2,0% Coo8; 1,9%

Dangdang; 1,3%

Vipshop; 0,9% Newegg; 0,7%

Others; 5,5%

Favorite e-Commerce sites:


Chinese netizens trust online payments

Favorite online payment sites:

Alipay; 47,8%

Tenpay; 20,3%

Unionpay; 9,1%

99bill; 7,6%

Chinapnr; 7,5%

Yeepay; 3,1%

IPS; 2,8% Others; 1,9%


How to start

e-Commerce

in China?

ASIA // CHINA


AQUARIUS conducts eCommerce projects typically in six consecutive workings steps

Sales via own eShop

Sales via third-party eShop

IT &

Infrastructure

Strategic

options

Marketing

strategy

Organization

& processes

Business

Case / KPIs

Implementation

Strategy

• Analysis market

and competition

• Barriers and

opportunities

• Channel conflicts

• Distribution

strategy

• Rough business

case

• Product

strategies

• Pricing strategy

• Promotion

strategy

• IT & data

• Infrastructure

• Interfaces

• Detailed

business case

• KPI definition

• Organization

• Processes

• Selection

strategic

partners

• Logistics

A B C D E F

• eShop

development

• Organizational

integration

• Accounting

• Customer

service

Source: aquarius Research

E-COMMERCE

APPROACH FOR E-COMMERCE PROJECT


With users spending 80%

of their online time on

social networks all internet

becomes social.

In Urban China the internet

is no longer a paralell

world, but is integrated into

every day life.

In China more people use

2-3 different devices on the

same day.

Even at home mobile

devices are being used for

browising and mobile

becomes the starting point

of the brand experience

Therefore offline and online

media and the „realworld“

e.g.) retail need to be

integrated into 360 degress

marketing and user

scenarios along the sales

funnel.

They expect consistent

service and brand

experience across all

platforms and devices

internet

= social

= mobile

Cross Device Usage No-line

TRENDS OVERALL

Few things remain that

better can be done on a

PC: work, serious gaming,

downloading

Source: Aquarius Research 2014

DIGITAL TRENDS


!

Mobile device dependency

is heavily increasing and

brands are adapting their

strategies to bring better

personalized services.

LOCATION-

BASED

MARKETING

Systems optimize content for

local audiences to interact

naturally with receivers to

increase relevancy and create

higher conversion.

DATA BASED

CUSTOMIZATIO

N

Successful brands will be the

ones who maintain a natural

relationship with their audience

by interacting fast and “in the

moment”.

INCREASE IN

REAL-TIME

INTERACTIONS

Mobile devices have

become the remote control

for consumers lives and

work.

MOBILE IS

MORE THAN

“THE NEW

DESKTOP”

In 2014, social media will

increasingly become a pay-to-

play channel since companies

and brands will have to spend

more money to get more

visibility through the social

channels.

DECLINE IN

ORGANIC REACH

BRAND PUBLISHING

(QUALITY CONTENT

ACROSS EVERY

CHANNEL)

Which channel you should be

on is decided by your consumer

(but there will be plenty), what

companies needs to decide is

what story they wish to share,

whether on product or brand

level, consistency is key.

DIGITAL TRENDS IN CHINA


Marc Finsterlin

[email protected]

SHANGHAI

Unit 7102, Block A7, 501 Liyuan Road, Luwan District

Shanghai | China 200023

HONG KONG

Unit B, 22/F, Loyong Court, 212-220 Lockhart Road, Wanchai

Hong Kong SAR

www.aquarius-asia.com

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austria connect china digital · 2014-11-04 · austria connect china digital shanghai, october...

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