Driven by a growing number of mobile internet users, gross internet-based trading volume hit RMB 8.42 trillion ($ 1.25 trillion), a 22.2% increase compared to 2017, according to a report by QuestMobile.
The report (in Chinese) covers China’s mobile ecosystem for the first half of 2018 and focusses on topics including mobile economy business models, new retail, gaming for social needs, video streaming, and digital branding.
The overall number of mobile netizens is moving into a stable growth channel where the first half of this year saw the number of monthly active mobile netizens grow by 0.4%.
The mobile netizen user base is generating increasing commercial value as users are more open when incorporating the mobile ecosystem into their daily lives, particularly with regards to economic activity. The report shows during the first half of 2018, gross internet-based trading volume increased by 22.2% compared to the 2017 annual volume of RMB 6.89 trillion. The figure also contributes to 9.6% of gross GDP over the same period.
But the mobile netizens’ business game is not for all. The research also shows two trends that could intensify current competition in the field.
Trend 1: The rise of short videos
Tech giants are increasingly concerned as new social needs and business models, such as short video platforms, thrive.
The chart below suggests Tencent’s Apps’ saw s 6.6% drop in gross users’ usage time, while ByteDance saw a 6.2% increase. The mobile internet market suspects this is due to the aggressive performance of ByteDance’s video projects Douyin, Xigua (西瓜视频), and Huoshan (火山小视频).
Short videos are demonstrating increasing power. The percentage of total mobile device usage time netizens spend watching short videos increased 340% from 2% in the first half of 2017 to 8.8% in the first half of 2018. Real-time communication, meanwhile, dropped from 36.0% to 30.2%, in the same period.
Nevertheless, as the chart below implies, the short video field is seeing tight centralization. Only Kuaishou and Douyin saw 100 million+ daily active user in the first half of the year.
Trend 2: Selective app usage
It’s becoming harder for apps to win mobile netizens’ heart.
The report shows that 76.2% of mobile netizens have no more than 35 apps on their phones, while there are now more than 4.06 million apps available in Chinese mobile markets.
For the second half of the year, the game will be no longer be about concepts, including pure model designs. Getting the designs to work and improving performance will be the key.