#Gillian Feng
2017.04.27
Chapter 1. Social media types and recent trends in China
Introducing the columns written by members of Amorepacific Group
ColumnistGillian Feng
APC MC Team
Greetings! My name is Gillian Feng and I am here to report about social media in China to you for this year. I'm sure that many colleagues must be interested in this subject. I hope my report gives you a chance to gain a better understand of social media in China.
As of December 2016, China's netizens reached 731 million, a year-on-year increase of 12.9 million. The Internet penetration rate was 53.2%, which was up 2.9% from the previous year. This is 3.1% higher than the global average and 7.6% higher than the Asian average.
In December 2016, China's mobile netizens reached 695 million, an increase of 75.5 million from 2015. Among Chinese netizens, the number of smartphone users increased from 90.1% in 2015 to 95.1%. Over the past three years, mobile netizen growth has remained above 10%, but desktop/laptop usage has declined. As such, smartphones are replacing existing means of utilizing the Internet. Mobile payment service has reached 470 million users, and using mobile payments for offline transactions has become commonplace as well. The number of mobile payment service users has increased by 31.2%, compared with 2015. The rate of mobile payment service users among netizens in China has increased from 57.7% to 67.5%, and more than half of netizens also use mobile payment services for offline purchase.
As of December 2016, China's netizens reached 731 million, a year-on-year increase of 12.9 million. The Internet penetration rate was 53.2%, which was up 2.9% from the previous year. This is 3.1% higher than the global average and 7.6% higher than the Asian average.
In December 2016, China's mobile netizens reached 695 million, an increase of 75.5 million from 2015. Among Chinese netizens, the number of smartphone users increased from 90.1% in 2015 to 95.1%. Over the past three years, mobile netizen growth has remained above 10%, but desktop/laptop usage has declined. As such, smartphones are replacing existing means of utilizing the Internet. Mobile payment service has reached 470 million users, and using mobile payments for offline transactions has become commonplace as well. The number of mobile payment service users has increased by 31.2%, compared with 2015. The rate of mobile payment service users among netizens in China has increased from 57.7% to 67.5%, and more than half of netizens also use mobile payment services for offline purchase.
Of the apps most frequently used by Chinese netizens, apps for real-time communication have a fairly even distribution of usage time, and social media apps have seen an increase in usage after 10:00 am.
# Recent trends
Chinese social media companies are unique compared to other countries. Let's take a look at why.
1. Due to the special media environment of China, Chinese netizens are skeptical about the authenticity of what is being reported through traditional forms of media, which is why they are looking for fact-based news sources on the Internet.
2. As China is highly-populated and there are limitations in enjoying a cultural life offline, they most frequently search for subjects related to cultural life when using the Internet.
3. Due to the Chinese government's birth control policies, people born in the 1980s and 1990s did not have siblings, so they found friends on the Internet, which was the main reason for the growth of Internet in China.
4. Online purchases have increased due to the increase in demand for overseas shopping, and the price difference between domestic and overseas products.
1. Due to the special media environment of China, Chinese netizens are skeptical about the authenticity of what is being reported through traditional forms of media, which is why they are looking for fact-based news sources on the Internet.
2. As China is highly-populated and there are limitations in enjoying a cultural life offline, they most frequently search for subjects related to cultural life when using the Internet.
3. Due to the Chinese government's birth control policies, people born in the 1980s and 1990s did not have siblings, so they found friends on the Internet, which was the main reason for the growth of Internet in China.
4. Online purchases have increased due to the increase in demand for overseas shopping, and the price difference between domestic and overseas products.
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Kantar Media classified social media as follows according to "function" and "level of interest."
In 2016, the structure of social media in China became more complex than in the past, and the following regular patterns can be found among them. Internet finance and e-commerce fields, which have high profit margins and high entry barriers, spread quickly, and large corporations gradually took the lead in the market. On the other hand, some areas with low entry barriers are seeing an explosive increase in growth. Real-time broadcasting and Chinese power bloggers in China called Wang Hong are some examples. In my personal opinion, once this period of explosive expansion of this sector is over, I am sure that an investment company with large capital will enter the market to reorganize the structure of this sector and eventually create a mature business model. We have summarized the major trends that we all would like to discuss once.
1. Structure of digital social media in China that is mainly driven by BATS
Baidu, Alibaba, Tencent, and Sina (these 4 service providers are generally called "BATS") have 8 social media and e-commerce brands in total. These platforms are the key service providers that are taking the lead in China's social media by securing hundreds of millions of users respectively. Owing to BATS, Internet companies in China have become characterized as being "viral," "informative," and "practical."
Among these characteristics, "informative" and "practical" stand out and have important meanings. As China usually lacks reliable news contents, it is not easy to access a lot of information, news, and netizen comments in social media using other channels. Due to this environmental reason, the importance of social media in China is increasing relative to the global market.
The practicality of Chinese social media is also evident in the combination of platforms and billing systems. Alibaba's Alipay and Tencent's Tenpay are good examples. The number of Tencent's WeChat users amounts to 700 million, and WeChat also provides the functions of e-Commerce, P2P account transfers, payments, and funds product purchasing, aside from merely being a social platform. No other country in the world has a system combining social media and payment platform as in China.
Among these characteristics, "informative" and "practical" stand out and have important meanings. As China usually lacks reliable news contents, it is not easy to access a lot of information, news, and netizen comments in social media using other channels. Due to this environmental reason, the importance of social media in China is increasing relative to the global market.
The practicality of Chinese social media is also evident in the combination of platforms and billing systems. Alibaba's Alipay and Tencent's Tenpay are good examples. The number of Tencent's WeChat users amounts to 700 million, and WeChat also provides the functions of e-Commerce, P2P account transfers, payments, and funds product purchasing, aside from merely being a social platform. No other country in the world has a system combining social media and payment platform as in China.
2. E-commerce platforms that are growing quickly in the complex distribution market in China
The number of e-commerce service providers is gradually increasing, which targets segmented consumer groups. Examples include group purchasing sites like Nuomi (糯米) and Meituan (美团), spot sales sites like Meilihui (魅力惠), second-hand goods trading sites like Xianyu (闲鱼), crowdfunding sites like JD Finance, O2O sites like Gewala (格瓦拉, ticketing service), and Xiaohongshu (小红书, shopping service and overseas goods sales platform). These e-commerce platforms are creating new business opportunities in the Chinese market.
The boundaries between social media and e-commerce are becoming increasingly blurred as the social platform is combined with billing capabilities. Even traditional e-commerce platforms are introducing social media features. Examples include Taobao's Weitao (微淘), Tmall's Faner (范儿), JD's Faxian (发现), YHD.com's Yipindang (一品堂). In some cases, social platforms include the characteristics of e-commerce. Xiaohongshu is a representative example.
The boundaries between social media and e-commerce are becoming increasingly blurred as the social platform is combined with billing capabilities. Even traditional e-commerce platforms are introducing social media features. Examples include Taobao's Weitao (微淘), Tmall's Faner (范儿), JD's Faxian (发现), YHD.com's Yipindang (一品堂). In some cases, social platforms include the characteristics of e-commerce. Xiaohongshu is a representative example.
3. Continuous diversification trends of video streaming services
Currently, Chinese netizens are enjoying domestic and foreign films such as dramas legally shared through video streaming service sites such as 'Youku' and 'iQiyi', and those sites still occupy an important position in the video service industry. These services can be divided into real-time subtitle videos, videos, and real-time broadcasting.
First, real-time subtitle technology means that a reply posted by a netizen in real time is displayed on the video in text message form. Initially, it started to become popular on platforms mainly used by young people such as animation and games. AcFun and Bilibili are representative examples, and more and more general video streaming sites are using this technology these days.
Videos such as "Mei Pai" and "Miao Pai" are contents that are used mainly when the brand wants to get opinions of netizens. Live videos include 'Panda TV (熊猫TV)' or 'ZhanQi TV (战旗TV)', which are a motif for the live broadcasting of foreign-based Periscope. These services providers also attract much attention from government regulators. These real-time broadcasting platforms are gradually being adopted for strategic sales promotion activities of brands. Maybelline sold 10,000 new lipstick products within 2 hours on their real-time mobile platform by using Angelababy as a spokesmodel.
First, real-time subtitle technology means that a reply posted by a netizen in real time is displayed on the video in text message form. Initially, it started to become popular on platforms mainly used by young people such as animation and games. AcFun and Bilibili are representative examples, and more and more general video streaming sites are using this technology these days.
Videos such as "Mei Pai" and "Miao Pai" are contents that are used mainly when the brand wants to get opinions of netizens. Live videos include 'Panda TV (熊猫TV)' or 'ZhanQi TV (战旗TV)', which are a motif for the live broadcasting of foreign-based Periscope. These services providers also attract much attention from government regulators. These real-time broadcasting platforms are gradually being adopted for strategic sales promotion activities of brands. Maybelline sold 10,000 new lipstick products within 2 hours on their real-time mobile platform by using Angelababy as a spokesmodel.
4. Promotion of the knowledge sharing platform, active participation of netizens
Aren't you curious about the total assets of Wang Sicong are – the most famous second-generation business tycoon in China? If you are, I recommend you to try a knowledge sharing platform such as Fenda (分答) or Zhihu Live (知乎Live) that is attracting huge popularity these days. Fenda actively encourages netizens to ask a question. The company pays for each question within the range of CNY 100 and 1,000. Wang Sicong has earned USD 45,000 at Fenda by answering trivial questions about his private life.
Zhihu Live is a knowledge sharing community where experts in each area are gathered. A key opinion leader (KOL) can share a variety of information or opinions with netizens through personal real-time broadcasting, and persons interested in a specific area can gather and communicate with the leader of the area. Companies need to think about how to utilize these knowledge-sharing platforms, opinion leaders, and celebrities to help promote their brand.
Zhihu Live is a knowledge sharing community where experts in each area are gathered. A key opinion leader (KOL) can share a variety of information or opinions with netizens through personal real-time broadcasting, and persons interested in a specific area can gather and communicate with the leader of the area. Companies need to think about how to utilize these knowledge-sharing platforms, opinion leaders, and celebrities to help promote their brand.
5. Wang Hong, a new concept that is newly added to opinion leaders
The concept "Wang Hong" has attracted much attention from the industry this year, and became an independent category. Wang Hong has already entered into the category of key opinion leaders and plays an important role. Currently, key opinion leaders can be grouped into three types – celebrity, expert, and Wang Hong.
Here, the "expert" refers to a person who has authority in a particular area (particularly, in the beauty or fashion area) based on their academic background and expertise, and who has secured many fans. On the contrary, Wang Hong mainly concentrates on online viral marketing and creating business opportunities for offline products. For example, a representative power blogger, "Qiangkouxiaolajiao (呛口小辣椒)," creates a good image and uses it for product advertising and sales online. Wang Hong is also willing to show their private life through various social platforms. Compared with celebrities, they show more realistic daily life that is closer to the general public. As explained, as the structure of opinion leaders is becoming more complex, brands should be able to make the most of the media influence exercised by those opinion leaders in an optimal way.
Here, the "expert" refers to a person who has authority in a particular area (particularly, in the beauty or fashion area) based on their academic background and expertise, and who has secured many fans. On the contrary, Wang Hong mainly concentrates on online viral marketing and creating business opportunities for offline products. For example, a representative power blogger, "Qiangkouxiaolajiao (呛口小辣椒)," creates a good image and uses it for product advertising and sales online. Wang Hong is also willing to show their private life through various social platforms. Compared with celebrities, they show more realistic daily life that is closer to the general public. As explained, as the structure of opinion leaders is becoming more complex, brands should be able to make the most of the media influence exercised by those opinion leaders in an optimal way.
# Conclusion : Originality, diversity, and dynamism of Chinese social media structure
Those five trends mentioned above are maintained continuously because of three unchanging characteristics of the social media industry in China – originality, diversity, and dynamism. There are only a few platforms available in China, whereas overseas countries can access various social platforms such as Facebook and Google. I believe we can achieve good results only when we plan and execute marketing activity plans while continuously making efforts to understand trends in such a complex social media environment in China.
We've reviewed the overall current situation of social media in China in this column. Any feedback? If so, please leave a comment if you want to know more. I will try to cover the subject more in the next column.
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