China’s Online Advertisement Market is Expanding . . . Fast!
During the second quarter of 2013, China’s online advertising market reached ¥23.26 Billion! This equates to a year-on-year increase of 27% when compared to the second quarter of 2012. Among the top 10 online giants in China, it was Baidu that topped the online advertisement income, with ¥7.56 Billion in revenue, followed by Taobao, making ¥5.61 billion. However, it’s not the total revenue of these companies that is the most shocking, but the growth at which their revenues grew from the second quarter of 2012. Since then Baidu and Taobao’s online advertisement revenue grew 46.1% and 38.6% respectively and it this growth is not expected to slow anytime soon. The several small and medium size businesses that are on Taobao’s platform are basically a warranty that Taobao’s online advertisement revenue will continue to expand, as these sizes of businesses tend to be highly dependent on advertisement.
Source: Tech qq
China’s third and fourth-tier cities’ explosive online spending
Online shopping is no longer just for city dwellers, and a report released this week by Taobao demonstrates the extent to which lower-tier consumers are dominating online sales. People living in counties and townships spent an average of ¥5628 online in 2012, almost ¥1000 more than consumers in urban areas. The report showed that township residents placed an average of 54 orders each on Taobao in 2012, far more than the 39 orders placed by e-shoppers living in China's first- and second-tier cities. Although residents' incomes tend to be lower in small towns and counties they will spend a larger amount online making their online spending habits similar to those of their urban counterparts. For every ¥100 spent online, ¥57 is spent by people in third- and fourth-tier cities, greater than the national average of ¥39. Residents in Qingliu county, in southeast China's Fujian province spent a staggering ¥20,151, or 72.55% of their combined income, on online shopping. In first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, the ratio has yet to exceed 27%. Also increasing is m-commerce with 22% of Taobao customers in small towns used its mobile application to shop online. But the percentage declined to 17% in first- and second-tier cities.
Socializing While Shopping
With 800 million daily visitors and a daily income of $100,000, it seems like new player in e-commerce, Fancy’s combination of shopping and socializing is very attractive to consumers. This platform has become very profitable due to its business model and as a result we see many other e-commerce companies leave behind their flash sales model and beginning to implement a more social atmosphere. So how exactly did Fancy managed to merge these two different concepts together? Well Fancy allows users to nail pictures of various items in an electronic photo board for others to click and buy. Fancy has been described as the “shopping edition of Pinterest.” As for being compared to Pinterest, the company CEO stated that the difference is in the revenue while Pinterest was valued at $2.5 Billion, this is not a product of revenue.
Mobile payments to exceed ¥9 Trillion in 2015
Online payment transactions handled by Chinese mobile payment providers will exceed ¥9 Trillion ($1.45 Trillion) in 2015. In 2012, the country's mobile banking sector handled ¥800 billion in online payment transactions, an increase of 265% on the previous year! Last year, the country's online payments rose 66% to nearly ¥ 3.7 Trillion, with the fastest growth in premium payments.Online premium payments grew 123.8% year on year to ¥ 3.66 Billion in 2012. Online payment transactions handled by Chinese payment service providers totalled ¥ 830 Trillion in 2012. Lesson; adapt your selling to be m-commerce friendly or your losing out!
Source: Securities Times
Amazon’s Expansions Outside of E-Commerce
Tablets, software, media, and mobile advertising, these are all areas to which Amazon has been expanding to. Research done by top market research firm BI Intelligence reveals that despite having several open fronts, Amazon has found significant success in all of them. For example, in 2012 Amazon’s Kindle tablet had a very successful year and along with the introduction of its 7-inch screen version in the third quarter of 2012, Kindle product shipments grew by 104%. In the field of software, Amazon Appstore has been really close behind Apple’s long-time dominant iTunes App Store. Despite, Google Play having more users than Amazon Appstore, Google Play’s revenue has been significantly less than Amazon Appstore’s. In other words, the revenue per active user of Amazon has been much higher than that of Google Play. Moreover, Amazon has different media applications, such as Amazon MP3 and Amazon Prime (movies). In the US alone and during the month of July, 47% of smart phone users have accessed different Amazon’s media applications. However, perhaps the greatest success is still to come as Amazon heads into the mobile advertising playing field where data is the gold mine. In this case Amazon has a unique data resource offering extensive information on its consumers online shopping habits, therefore we can only expect will see the company become a powerful player.
Source: Tech qq
Q2 2013 - Chinese E-Commerce generated ¥ 437 Billion
China's online shopping market transactions in Q2 amounted to ¥ 437.13 billion, an increase of 45.3%. In terms of market share, Tmall and JD together accounted for 67.9% of transactions. The B2C market structure is almost identical to Q1 – Tmall and JD are still the dominant players, with the former accounting for over half of all transactions.