Isentia China¹s Digital Economy_Presentation_Feb

CHINA’S DIGITAL ECONOMY

FEBR

UAR

Y20

16

欢迎

• China• China’s digital economy• The Great Firewall• Social Media• Online shopping• Australia through Chinese eyes

China’s digital economy

PEOPLE’S REPUBLIC OF CHINA

A MARKET OF

A

PEOPLE

GDP

IN 2015 IN COMPARISON TO AUSTRALIA’S 2.5%

IN THE WORLD

1.37 BILLION

US$11.2 TRILLION

7.3% GDP GROWTH

LEADING TRADING NATION



16,764,455 BABIES BORN IN CHINA IN 2014

THE EXPONENTIAL GROWTH OF CHINA’S ECONOMY

19520

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

1952 1952 1952 1952 1952 1952 1952 1952 1952 1952 1952 1952 1952

67.9 billion in 1952

Korean War Great Leap Forward Cultural Revolution Market-based economic reforms since 1978

Farm Privatization

Shenzhen SEZ

1997 Asian Financial Crisis

18232.1 Billion in 2005

Shanghai SEZ WTO Entry

PEOPLE’S REPUBLIC OF CHINA’S NOMINAL GROSS DOMESTIC PRODUCT (GDP BETWEEN 1952 TO 2005

GD

P (IN

BIL

LIO

NS

OF

RMB

YUAN

)


CHANGING FACE OF GLOBAL ECONOMICS

40%

30%

20%

10%

0%

1820

1830

1840

1850

1860

1870

1880

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

% O

F G

LOBA

L G

DP

19%

2%2%

2%

6%

27%

16%

33%

15%

16%

- USA - Europe - China - India - Latin

Source: Angus Maddison, University of Groningen, OECD, data post 1980 based on IMF data (GDP adjusted for purchasing power parity)


CHINA AND THE USA

SEATTLE

DENVER

CHICAGO

DALLAS

BOSTON

LOS ANGELES

SAN FRANCISCO

MIAMI

NEW YORK

ATLANTA

URUMQI

LHASA

XIAN

KUNMING

BEIJING

HAERBIN

SHENYANG

TIANJING

NANJING

SHANGHAI

CHONGQING

TAIPEI

GUANGZHOU

HONG KONG

WASHINGTON DC


Image credit: East Meets West: An Infographic Portrait by Yang Liu


CHINESE DIGITAL LANDSCAPE 74%

ONLINE NEWS87%

INSTANT MESSAGING77%

ONLINE SEARCH

ONLINE USAGE

2013

2014

81%

83.4%

2013

2014

81.7%

80.9%

ONLINE ACTIVITY

21.5% 77%

MARKET DOMINANCE


THE INTERNET CANNIBALISES OTHER MEDIA FORMATS

Time (minutes) spent on each media per daySource: JWT Shanghai

3229

28 8 9 10

170162

150

54

4845

168

196

217

NEWSPAPER MAGAZINE RADIOTV INTERNET

2012 2013 2014

TIME IN MINUTES SPENT ON MEDIA PER DAY


THE BIG THREE

Source: JWT Shanghai

MONTHLY ACTIVE USERS TOTAL REVENUES IN FISCAL YEAR 2013

500 MILLION ON MOBILE BAIDU SEARCH BY JULY 2014 $5.2 BILLION

$5.5 BILLION

$9.7 BILLION (RMB 60.4 BILLION)

27 MILLION ON MOBILE REPORTED IN JUNE 2014

819.8 MILLION ON QQ IN Q3 2013

SOCIAL NETWORK + MOREECOMMERCE + MORESEARCH ENGINE + MORE


TWO DOMINANT PLAYERS IN WECHAT AND SINA WEIBO

Source: Tencent and Sina

468 167MILLION MILLIONMONTHLY ACTIVE USERS MONTHLY ACTIVE USERS

Video killed the... @isentia @spence7zero

EVOLUTION OF MESSAGING

Frequency of Communication

HIGH

LOW HIGH

Cont

acts

FREQUENCT INTERACTIONS WITH SMALLER GROUP PF CLOSE CONTACTS

BROADCASTING FEWER MESSAGES TO LARGE AUDIENCES

Source: Anjney Midha, KPCB Associate; Jared Morgenstem, KPCB Entrepreneur Partner


WECHAT – APPS WITHIN AN APP

• MESSAGING• MOMENTS• PHONE CALLS• VIDEO CALLS• CONFERENCE CALLING• MESSAGE IN A BOTTLE (DRIFT)• STICKERS• PAYMENTS AND GIFTING• WALLET• LOCATION BASED MARKETING• TAXI


KEY OPINION LEADERS (KOLs)


13.3 MILLION FOLLOWERS

Video killed the... @isentia @spence7zero

• Presented to Chinese President Xi Jinping on his visit to Tasmania

• 65,000 visitors per year to Bridestowe Lavender Farm

• Sales of more than 40,000 bears per annum

• Online tag of authenticity check

• Bobbie the Bear the TV Show for ABC International

Source: Tencent and Sina

BOBBIE THE BEAR

CHINESE ECOMMERCE• 20,000 Chinese domiciled

ecommerce businesses• 5,000 online shopping

platforms• $US1 trillion digital economy

2/3 the size of Australia’s whole economy

Avg. Buzz 27034

ONLINE SHOPPING POSTS BY INDIVIDUAL PURCHASE AGENTS WITH REGARDS TO AUSTRALIAN VITAMIN PRODUCTS

19960

14802

15098

1680718756

2270425292

29893

42701

47104

37532

33757

11.11 Online Shopping Festival

& 12.12 Online Shopping Festival

Source: Isentia China; Quarter 2, FY 2015

0

10000

20000

30000

40000

50000

March April May June July August Sept. Oct Nov Dec Jan Feb


THE SHOPPING FESTIVAL AND SINGLES DAY• Singles Day is 11 November

each year

• Biggest shopping day in the global calendar

• US$14.3 billion in 2015 including US$5 billion in the first 90 minutes

• US$1.6 billion for Black Friday and Thanksgiving combined

Products cheaper than usual

Online Campaigns

Discount Coupon

Freshness

Wider selection of items

To save time

0% 5% 10% 15% 20% 25% 30% 35% 40%

35%

19%

17%

13%

11%

5%

REASONS FOR SHOPPING DUIRNG ONLINE SHOPPING FESTIVAL

Source: CNNIC


77.8%

50.2%

41.2%

53.1%

39.6%

35%

40.8%

30.7%

29.1%

Clothes & Shoes ElectronicsPhone Credit Groceries Consumer Health

WHAT ARE PEOPLE BUYING ONLINE IN CHINA?

Source: Kantar Media, 2014


CHINA & AUSTRALIA

94% OF CHINA’S POPULATION LIVES ON THE EASTERN SEABOARD


0

5000

10000

15000

20000

25000

March April May June July August Sept. Oct Nov Dec Jan Feb

Health A Health B Health C Health D Health E

AUSTRALIAN CONSUMER HEALTH – MARKET ANALYSISBy way of example and to test the relative impact of Chinese social media and online shopping on Australian products and services Isentia tracked mentions and products offered for sale in China from five competing Australian domiciled consumer health organisations.



SENTIMENT OF AUSTRALIAN BUSINESSESSentiment in comments and approval generally over Australian consumer health products was very high, due in large part to the perceived safety of products sourced from Australia and New Zealand.


Health A

Health B

Health C

Health D

Health E

Industry

0% 10% 20% 30% 40% 50% 70%60% 80% 90% 100%

9.14% 89.32%

80.74%

98.57%

66.16%

78.04%

55.64%

31.65%

14.34%

27.34%

16.12%

Negative Neutral Positive Very Positive


Brand mentions

40000

Health A

Health B

Health C

Health D

Health E

80000 120000 160000 200000

94678

39,202

20069

59803

54566

32623

Product Discussion %

BrandDiscussion %

Product Discussion

39%

58%

72%

69%

68%

61%

42%

28%

31%

32%

PRODUCT VERSUS BRAND IN CONVERSATION



KEY WORDS AND PHRASES



Source: Business Insider


THE GREY MARKET ECONOMYBLACKMORES’ ASIAN BUSINESS IS WORTH $84 MILLION PER ANNUM BUT THE BUSINESS ESTIMATES THAT DOMESTIC AUSTRALIAN SALES FOR ‘GREY MARKET’ RESALE IN CHINA ADDS A FURTHER $70 MILLION PER ANNUM

WHERE ARE PURCHASE AGENTS FROM?

MORE THAN ONE THIRD OF ALL PURCHASE AGENTS SELLING

CONSUMER HEALTH PRODUCTS FROM AUSTRALIAN DOMICILED BUSINESSES

LIVE IN AUSTRALIA

AUS

96% OF PURCHASE AGENT ACCOUNTS ARE UNVERIFIED



AUSTRALIAN ORGANISATIONS ON SINA WEIBO


CHINESE AUSTRALIAN COMMUNITY POPULATION DISTRIBUTION

Source: Monash City Science


Source: Weibo.com


SINA WEIBO IN AUSTRALIA• SINA WEIBO IS THE 6TH MOST VISITED SITE IN CHINA AND THE 63RD MOST VISITED WEBSITE IN AUSTRALIA

• 368 MILLION GLOBAL USERS OF WHOM 600,000 ARE DOMICILED IN AUSTRALIA

• 71% OF THE CHINESE AUSTRALIAN COMMUNITY HAVE A SINA WEIBO ACCOUNT

AUSTRALIAN ORGANISATIONS ON SINA WEIBO

There are 10,000 Australian business accounts, for example:

RMITABC International

Westpac

Tourism Victoria

IG Markets

ABC International

Tennis Australia

Tourism Australia

Monash University

Commonwealth Bank

Source: Weibo.com


AUSTRALIAN USE OF CHINESE SOCIAL CHANNELS


ISENTIA UNLOCKING CHINA



ISENTIA UNLOCKING CHINA

Understanding ChinaA monthly update on social media activity and the Chinese digital economy and specifically how it impacts on the ANZ market.

InsightWho is talking about your brand and services or selling your products? How do you position against local and international competitors?

EngagementTargeting Chinese consumers either in the PRC or domiciled in Australia. Establishing accounts and profiles on Sina Weibo and WeChat.

MonitoringOngoing monitoring of conversations and online sales for your brand, product or service.

Isentia China¹s Digital Economy_Presentation_Feb

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