Mary Meeker report puts China (and WeChat) on the global stage

Last week, venture capitalist Mary Meeker released her annual Internet Trends report, and China was a key focus.

Meeker is a partner with Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers (KPCB), and her report into global technology trends is an annual industry highlight. My colleague Mike O’Brien has already used stats from this report showing the threat Facebook is facing from Snapchat, which you can read more about here.

But another key element of the report is the more than 20 slides in the deck devoted solely to China. Here are some of the numbers:

1. 668 million: number of Chinese Internet users

There are 668 million Internet users in China. This is up from less than 300 million in 2008.

Mary Meeker_China Internet Users 668 million_600

While the red line in this graph is showing a slow down in year-on-year Internet user growth, it doesn’t account for the further 500 million people in China yet to come on line. And, as we have reported in a previous stats of the week, 88% of Chinese Internet users are coming online via a mobile phone. This leads on to the next stat –how Chinese Internet users spend their time on mobile…

2. 200 minutes: the average time spent on mobile everyday in China – and one third of that is on WeChat

Chinese people spend an average of 200 minutes a day on their mobile phones, according to Meeker’s report. Tencent’s social commerce app WeChat accounts for 35% of that time, and its QQ messenger function, a further 10%.

All up, Tencent assets account for more than half of Chinese users’ time spent on their mobiles – more than on Chinese search engine Baidu and the sites of ecommerce giant Alibaba combined. The BAT – Baidu, Alibaba and Tencent, as they are collectively known – account for 71% of the time Chinese users spend on their mobile phones.

Mary Meeker_China_Mobile user distribution_Tencent_600

The takeaway here for global marketers targeting the Chinese consumer (whether that’s the 400 million Chinese consumers in China or the 100 million who travel abroad each year), is to understand the extraordinary capabilities of WeChat and how brands are already using this app for ecommerce, CRM and engagement strategies.

Chinese outbound travellers are already the world’s biggest spenders. According to Meeker, China’s outbound tourism sector was worth US$165 billion in 2014, ahead of the US (US$146 billion) and Germany (US$107 billion). And WeChat is an important channel to reach these Chinese travellers before, during and after their overseas trips.

3. 31%: the number of WeChat users making ecommerce purchases using the app

Since introducing its Wallet capabilities to the China market several years ago, users have been able to do everything from pay utility bills, book and pay for taxis, to transferring money between friends.

Add to that the app’s ecommerce capabilities. According to the Meeker report, 15% of WeChat users made an ecommerce purchase on the platform last year. This has doubled to 31% of users in 2016.

Mary Meeker_WeChat e-commerce purchases_600

The pie chart on the right shows the breakdown of how these ecommerce purchases are made. Some brands are now hosting ecommerce stores as part of their public accounts within the WeChat app, others are linking their WeChat accounts to Tencent’s ecommerce affiliate and others link to a website outside the platform.

Brands like Coach, Moleskine and Soapnut Republic are already using WeChat in integrated ecommerce strategies for the Chinese market. Read more about these examples here.

(Note that in China the app is known as Weixin).

One of WeChat’s key marketing strategies to encourage Chinese users to adopt the app’s wallet capabilities is through the giving of money in red envelopes (hong bao). Traditionally, these hong bao are given during the two-week Chinese New Year period – but WeChat has taken this to the electronic space by allowing users to send and receive money from friends and family.

And it doesn’t stop there, brands have also incorporated hong bao into Chinese New Year (CNY) marketing campaigns offering free gifts and money. This year, eight billion hong bao were sent over the CNY period – eight times more than during the CNY 2014 period.

Mary Meeker_WeChat Red Packets_600

4. Number 1. Alibaba’s position as China’s top retailer

Ecommerce in China is huge. This is illustrated by comparing the top retailers in China and the US. According to Meeker, Wal-Mart is the top retailer in the US, followed by CVS and Kroger. In China, the top two biggest retailers are ecommerce players: Alibaba (owner of popular C2C and B2C ecommerce platforms Taobao and Tmall) and

Mary Meeker_ecommerce retailers_Alibaba_600

Last year, Alibaba’s popular annual ecommerce festival, Singles Day, raked in a staggering US$ 14.3 billion in gross merchandise volume (GMV)… in just 24 hours.

Note to marketers: Do not underestimate the importance of an ecommerce strategy for China.

5. 2015: the year Internet advertising spend in China overtook television

The Meeker report estimates Internet advertising spend in China overtook television last year. Meeker estimates that in 2015 online advertising in China accounted for 42% of total advertising budget, compared to 39% in the United States.

Mary Meeker_China Advertising spend_600

6. 4 billion +: The number of on-demand transport rides taken in China this year

China’s adoption of new technologies is skyrocketing. China is the global leader when it comes to on-demand transport – accounting for 70% of global volume.

Mary Meeker_Transport on Demand_600

7. 7: the number of Chinese Internet and technology players in the global top 20

Finally, Chinese Internet players are making waves and they are here to stay. This list shows the number of Chinese companies on Meeker’s global list of Internet market leaders.

Tencent, Alibaba and Baidu are the obvious players, but Alibaba’s financial services arm, Ant Financial, comes in at number 10, followed by mobile phone maker Xiaomi (12), (16) and taxi-hailing app Didi Kuaidi (20).

Mary Meeker_Global internet Players_600

*Images: KPCB / Mary Meeker, Internet Trends 2016. Featured image: WeChat

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