2013: The year nothing but mobile matters for any business selling in China – guest blog by Mark Tanner, China Skinny

Growth rates for almost everything in China are staggering, but few come close to the phenomenal rise of mobile. In 2012 mobile subscriptions surpassed 1 billion – over 200 million of those are 3G subscribers – (operator stats); mobile Web users – at almost 400 million users – overtook PC access to the Web (CNNIC), but perhaps most significantly smartphone sales more than doubled from 90 million units in 2011 to 190 million in 2012 (IDC), The Middle Kingdom is now the mobile kingdom: China is the number one market for mobile subscribers, mobile Web users and smartphones.
This is the first of a two-part introduction to doing business in China via the mobile channel, by Mark Tanner, founder of China Skinny, a company that helps businesses better understand Chinese consumers. Part two will share top tips on mobile Web in China.


So what do soaring smartphone sales mean for anyone selling in China?

The Internet is one of the most important marketing channels in China, and it’s most likely to be accessed by mobile
Chinese consumers are greatly influenced by information they read online. An Ipsos China survey found that 37.6 percent of Chinese consumers raise their awareness of brands through Websites, more than any other channel. Furthermore, consumers purchase intent increased 47.5 percent after reading information on a brand’s Website, over 50 percent more than all other channels surveyed including TV, newspaper, magazines and radio commercials. It’s no surprise given Chinese spend 3.6 hours a day online according to a Boston Consulting Group report – that’s about an hour a day more than US users. The Internet was also the most trusted source of information, ahead of TV and newspapers according do the same report.
But when you are talking about Internet in China, you aren’t just talking about desktop users, or even majority desktop users, in first half of 2012 the mobile device overtook the desktop as the main Web access device, according to CNNIC (China Internet Network Information Center).

Social media users are changing China forever, from their smartphones
Social media in China is huge. It’s finally given Joe Public a voice and he’s taking advantage of it. Outbursts on social media have even started to influenced Government policy. Social media has created a new category of celebrities and villains and has helped to establish household brands – the role social media plays in every-day life is even more a significant than in the western countries. Social media is perceived as being more transparent relative to TV, newspapers and radio, which are all state controlled. This means that people will trust a brand more if it is an active participant in social media: research by eMarketer found that 95 percent of Chinese consumers trusted a brand more if it had a micro blog, much more than any other nation surveyed. The leading micro-blogging site (it’s a cross between Twitter and Facebook) Sina Weibo now has over 400 million users, of which 72 percent access via a mobile device, reports Want China Times. WeChat (known in China as Weixin), China’s communications darling, was only launched in 2011 and is expected to reach 300 million users in January, according to Tech in Asia. WeChat is mobile only.

Mobile apps are helping businesses
A MediaCom/China Youthology poll of Chinese smartphone users aged 18-30 found that 80 percent of smartphone users have downloaded a mobile app in the past 12 months. In the uber-competitive Chinese market, mobile apps have become one of the most effective channels to break through the clutter. The study suggested that brands with apps that helped customers "play", "plan" or "problem solve" would be more successful – three Western brands that have got this mix right in China are DHL, Volkswagen and Starbucks.

Mobile commerce is on the rise in China
China is fast changing from a cash society as consumers move onto digital payment methods. Mobile is still a small, but rapidly expanding part of e-commerce. According to estimates by iResearch Consulting Group m-commerce was 2.9 percent of online GMV commerce in Q1, 2012 and 4.3 percent in Q2, 2012. By 2015 m-commerce is forecasted to reach 10 percent. This is far from being small change. In Q1, 6.67 billion Yuan (US$1.07 billion) worth of goods and services were purchased by m-commerce, rising to 11.64 billion Yuan (US$1.87 billion) in Q2. Some pundits are predicting that more than half of China’s retail transactions will be by smartphone by 2020.

Chinese mobile brands are bringing smartphones to the masses
Local manufacturers such as ZTE, Lenovo and Huawei are helping to bring down the price of smartphones. The cheapest Android smartphones now sell for as little as $100. The average Android smartphone is now just over $200 US, less than a third of the average price of an iOS device in China, according to Analysys International. This competition has helped to give Android 90.1 percent of the Chinese smartphone market in Q3 2012.
The local manufacturers are becoming increasingly dominant in Chinese smartphone market, Gartner predicts that in 2013 Lenovo will overtake Samsung as the top-selling smartphone brand in China.

In Conclusion
Although it’s a bit of an exaggeration to say nothing else matters in China than mobiles, mobiles are becoming an increasingly dominant part of Chinese consumer society. To succeed in China, the mobile Web should be an integral part of any company’s marketing strategy. The hundreds of millions of affluent Chinese consumers who have the discretionary income and inclination to buy western products want a smartphone, and they’re using them to run their lives. Without catering to those needs, businesses are potentially missing out on a significant proportion of their target market, in an already fiercely competitive market.


• The second part of this two-part guest blog will focus on the dos and don’ts of building and promoting a mobile site in China, in order to best tap into the world’s largest and most dynamic mobile market.
• Mark Tanner, founder of China Skinny, a company that helps businesses better understand Chinese consumers. He has been involved in mobile and Web marketing since 1998 in Europe, North America, Australasia, and most recently China. China Skinny provides a free, weekly newsletter giving insights into Chinese consumers.



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