china mobile internet 2015 year in review

Part 012015 Annual Report of Mobile Internet

Trends

User insights

App development

Equipment brands

Cross-sector integration

— — M a j o r i n t e r n e t t r e n d s i n 2 0 1 5Part 01

Source：TalkingData Mobile Data Research Center

The number of users from the younger groups is climbing, while the post 80s still have the biggest share

Still represents largest relative

share the overall market

The number of users from less-developed regions is rapidly growing

Users from central provinces are particularly active

Female users on mobile devices are increasing, creating a more balanced gender structure

Male VS Female55.4% 44.6%

Under 25 VS 26-35

36.5% 37.1%

3rd-tier cities (and smaller)

Sichuan & Hubei

1st-tier cities

1.28 bln

3.2%

Quarterly growth

Growth in the number of active mobile devices is gradually slowing as user scale is beoming saturated. Q-o-Q growth of user scale in 2016 will drop below 3%

China’s mobile internet industry 2015

While overall mobile device growth slowed in 2015, the percentage of female users and users from 3rd-tier (or smaller) cities increased

1.13 1.18 1.24 1.28

6.6% 4.8% 4.6% 3.2%

2015Q1 2015Q2 2015Q3 2015Q4

Total number of mobile devices in China from 2015Q1 to 2015Q4

Number of mobile devices (bln units)

1.28 bn mobile devices

By December, 2015, China has 1.28

billion units of active mobile devices, up 150 million from the first quarter. But the

overall growth rate is slowing down as

the mobile user scale is nearing its ceiling.

Source: TalkingData Mobile Data Research Center. The number of smart mobile device users refers to the total number of active mobile device devices, including smart phones, tablets, smart watches and smart TV boxes.


Quarterly growth (%)

In 2015, mobile device growth decelerated, market coverage is approaching saturation

Gender structure of mobile netizens

57.8%42.2%

55.4%44.6%Dec. 2014 Dec. 2015

Female users taking a larger share of the market

By December 2015, 44.6% of China's

smart mobile users was female, creating a more balanced gender structure in mobile

users.

Source: TalkingData Mobile Data Research Center


Women power: the gender structure between male and female mobile netizens is becoming increasingly balanced

35.7%38.3%

13.2%9.1% 3.7%

36.5% 37.1%

13.5%9.0% 3.9%

Under 25 y/o 26-35 y/o 36-45 y/o 46/55 y/o Above 55 y/o

Post-1990+

Post-2000

Post-1980

Post-1970 Post-1960 Pre-1960

Age structure of Mobile Users

12/2014 12/2015

By December 2015, 36.5% smart

mobile device users in China are under 25 y/o, up from 35.7% in 2014; The

post-1990s & post-2000s generations

are occupying an increasingly larger proportion; percentage of users above

35 y/o went up slightly; while users of post-1980 saw a moderate decrease.

Source：TalkingData Mobile Data Research Centre


Youth market: 73.6% of mobile users are under the age of 35, with the post-90, post-00 generations showing gains in 2015

Map of mobile device user distribution among all provinces

Source: TalkingData Mobile Data Research CentreNote: Active times per month = Total number of active times on all active devices / Total number of active devices

Index：Active times per month

Map of mobile device user activity among all provinces

Index：user proportion among all provinces in Percentage

Guangdong & Beijing contain the largest number of mobile device users by provinceGuangdong contains the largest number

of mobile device users in China at 14.3%,

followed by Beijing and Jiangsu.

Sichuan & Hubeihave the highest level of mobile device user activationSichuan and Hubei have the highest

mobile device user activation rates by

province at 60.4 and 60.3 active times

per month respectively


Eastern coastal provinces contain a larger number of users, while the number of active users in central provinces is higher

Usage share ratio in different tiers of cities

First-tier Cities Second-tier Cities

Third-tier cities and below

16.3%

36.1%

47.6%

18.1%

32.6%

49.3%01/2015 12/2015

User ratio in first-tier cities increased

by 1.8%, from 16.3% at the beginning

of the year, to 18.1%.

User ratio in second-tier cities

dropped from 36.1% at the

beginning of the year, to 32.6%.

User ratio in third-tier cities and

below was raised by 1.7%, to 49.3%.

1.8%First-tier

Cities

3.5%Second-tier

Cities

1.7%Third-tier cities

and below

Source: TalkingData Mobile Data Research CentreNote: First-tier cities are Beijing, Shanghai, Guangzhou and Shenzhen; Second-tier cities are provincial capitals, municipalities, Xiamen, Zhuhai, and Shantou; Third-tier cities are all but first and second tier cities.


Usage share keeps increasing in cities of first-tier, third-tier and smaller

User insights

App development

Equipmentbrands



Source: TalkingData Mobile Data Research Center

Cell phones taking a larger share

Cell phone's share

Tablet's share

Improved device quality

Large screen cell phones are capable of more functions that previously could only be carried out by tablets, weakening tablet’s advantage.

Expensive phones and large screens are gaining popularity. 4G network use is also up. User experience with mobile devices is improving.

Higher prices

The rise of smart hardware

94%

5%Larger

screensBetter network

Wearable device use is on the rise, becoming increasingly common in many aspects of mobile netizens’ daily lives


In 2015 cell phones become even more central to daily life, leading to an upgrade in hardware quality and a proliferation of device models

90.2%

9.1%0.72%

94.2%

5.0%0.79%

Market share of smart mobile devices

Jan. 2015 Dec. 2015

Tablet


Tablet's market share fell to 5.0%Tablet's market share falls from 9.1% in

January 2015 to 5.0% as smart phones keeps gobbling up the market. Smart phones saw its

market share rise from 90.2% (Dec 2014) to

94.2% (Dec 2015).Other smart mobile devices like smart wearables and smart TV boxes saw

a slight increase in market share from a small base.


OthersSmart phone

Tablets are losing market share in face of competition from smart phones and other smart devices

500-999 RMB

2000-3999 RMB

6.3% 3.6%21.1% 21.8%

38.1% 30.8%

27.0%24.7%

7.5% 19.1%

Jan. 2015 Dec. 2015

1-499 RMB

11.6% increase in the market share of devices priced above RMB 4,000Fewer people are choosing mid- or low-

price smart mobile devices and more

people are accepting high-end devices. 19.1% of users are using high-end

devices worth RMB 4,000+, up from 7.5% at the beginning of the year.

Price distribution of smart mobile devices

1000-1999 RMB

Above 4,000 RMB



Customers are turning to high-end devices as consumption habits change

40.9%25.6%

30.8%37.8%

28.3% 36.6%

Jan. 2015 Dec. 2015

Largescreen

Mediumscreen

Smallscreen

Market share for smart mobile devices,

by screen size

Source: TalkingData Mobile Data Research Center. Large screen devices refer to those 5-inch screen or larger ones, while medium screen devices come between 4.6 to 5 inches, and small screen devices are of 4.5-inch screen or smaller ones.

iPhone 5s

iPhone 6/6s

iPhone 6/6s Plus

4-inch 4.7-inch 5.5-inch

MATE 8

6-inch

P8

5.2-inch

MATE S

5.5-inch


Medium and large-screen devices are replacing smaller ones, as major brands have all started to promote large-screen products

Network environment of Chinese mobile users

2G

3G

4G

WiFi56.9%41.2%

5.2%19.5%

20.3% 21.5%

17.6% 17.8%

Jan. 2015 Dec. 2015

19.5% of China’s mobile netizensuse a 4G network to access the internetBy the end of 2015, people using mobile

devices under a 4G network accounted for one fifth of the total, nearly four times of the

proportion at the beginning of the year,

indicating significant improvement in the mobile internet environment.

Source: TalkingData Mobile Data Research Center. Any device that uses any of the above networks in the survey period is calculated as a user of such network.


More people are using mobile devices under a 4G network

24.6%

44.6%

30.8%16.9%

27.1%56.0%

Distribution of 4G users

4G

69.2% 4G users are from first- and second-tier citiesAmong those 4G network users, up to 69.2% are

from 1st- and 2nd-tier cities, while only 30.9% comes from 3rd-tier cites or smaller. For the 3rd-tier

cites or smaller segment, 4G network has yet to

take off.

Distribution of WiFi users

1st-tier city 2nd-tier city 3rd-tier city or smaller

56.0% WiFi users are from third-tier cities or smallerUsers from 3rd-tier cites or smaller are more

dependent on WiFi, with 56% of mobile users coming from these cities.

WIFI

Source: TalkingData Mobile Data Research Center's December 2015 data


People in first- and second-tier cities tend to use 4G networks while 3rd-tier city users are more dependent on WiFi

User insights

App development

Equipment brands



Device brands: iOS Devices take ~30% of the market share, Xiaomi is the second brand which widely used in China

Top 4 brands take up

In December 2015, the top 4 mobile device

brands took 61.9% of the market. iOS Devices take thirty percent of the market share, Xiaomi is

the second large brand in China mobile market.

30.4%

12.8%9.7%9.0%

38.1%

Market share of smart mobile device brands

Dec. 2015 Apple

XiaomiSamsung

Huawei

Others

61.9% of the market


Source：TalkingData Mobile Data Research CenterNote: Smart mobile device include smartphone, tablet, wearable device and others.

0.8%

0.9%

0.9%

0.9%

0.9%

0.9%

1.2%

1.5%

1.9%

2.3%

Samsung：Galaxy S4

Huawei：Mate 7

Xiaomi：Redmi 1S

Huawei：Honor 4X

Samsung：Galaxy Note 2

Xiaomi：MI 2S

Samsung：Galaxy Note 3

Xiaomi：MI 4

Xiaomi：MI 3

Xiaomi：Redmi note

Top 10 Android mobile devices

Half of the top 10 are from XiaomiAmong the top 10 most popular Android models, 5 of

them are Xiaomi models, while 3 are from Samsung and 2 from Huawei.



Top 10 Android devices: Xiaomi still dominating the list while the rest goes to Samsung and Huawei models

0.7%

0.7%1.2%

1.3%

1.9%

2.6%

2.7%

4.8%

5.0%

6.9%

iPhone 5S

iPad air

iPhone 6s Plus

iPhone 4

iPhone 6s

iPhone 4s

iPhone 5

iPhone 6 Plus

iPhone 5s

iPhone 6

Top 10 iOS mobile devices

Two iPhone 6s models

entering TOP 10The two new models, iPhone 6s and iPhone 6s Plus, hit

the market in September 2015, climbed into the top 10 iOS devices only three months after launch. Among

them, iPhone 6s ranked no.6 while iPhone 6s Plus

ranked no.8.



Top 10 iOS devices: iPhone 6 is still the most popular iOS model, while two iPhone 6s models rapidly gained market share shortly after launch

User insights

App development

Equipment brands



In 2015, users are getting more and more reliant on life service apps

Average time a person spent on different apps per day and its growth

People are spending more time on all types of

apps except games, among which healthcare,education & reading, f inancial service and other

emerging sectors are seeing significant growth.

Apps closely connected to daily life are being

used more frequently.

Healthcare Education & Reading

Financial service

Unit: Minutes


Growth


6.7 10.7

5.6 5.5

17.3

8.5 9.1 9.0

34.7

18.3 21.5

9.4 7.0

21.0

9.7 9.9 9.6

33.8

Healthcare Education & Reading

Financials Navigation SNS & Chat News Online shopping

Music & Video

Games

Jan. 2015 Dec. 2015

174.6% 101.4% 67.0% 29.1% 21.0% 15.0% 8.9% 6.6% -2.6%

0%

1%

1%

2%

2%

3%

3%

Jul-1

4

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15


0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Jul-1

4

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

User coverage growth of typical life service apps in 2014-2015

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

Jul-1

4

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15 0%

1%

2%

3%

4%

5%

6%

7%

Jul-1

4

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Didi Chuxing

Meituan Takeout

Sofang.com Ctrip


From the second half of 2014 to 2015, typical life service apps like DidiChuxing and Meituan Takeout witnessed rapid growth in user coverage

Dec. 2014 July 2015 Dec. 2015

34.3 40.8 39.7

20.1 25.0 24.6

The average number of apps installed on one device

The average number of apps opened on one device each day

The average number of apps installed and used by mobile users


App demand: “

Fewer But BetterIn 2015, mobile netizens used a "fewer but better" variety of apps, with each device opening on average 25 apps each day, among which only 1 to 3 apps belong to the same category. While app developers are competing for only one screen, the fight for a leading position in each category is fierce. In 2016, new/sub-scale apps will face challenges differentiating themselves.


In 2015, the average number of apps installed and used per person was stable. Market entry for new apps will become even more difficult in 2016

User insigts

App development

Equipment brands



Traditional marketing era

Internet marketing era Mobile marketing era

Media TV, Radio, Publication, Outdoor PC-end media Mobile-end media

FeatureBroad-range user focused

advertising distribution based on simple population

attributes

Narrow-range user focused advertising distribution based

on browsing habits

Objective More accessed usersMore views + relatively accurately accessed by

target users

Accurately accessed by target users + contextual

marketing

Efficiency Low Medium High

Narrow-range precise distribution based on user characteristics,

online activities and offline daily behaviors


The era of precision mobile big data marketing has arrived, and will increasingly shape how advertisers communicate with their customers

2015.1 2015.2 2015.3 2015.4 2015.5 2015.6 2015.7 2015.8 2015.9 2015.1 2015.11 2015.12

Total mobile ads activations and growth trends01/2015 – 12/2015

Total mobile ads clicks without duplicates Total mobile ads activations

Total mobile ads clicks and activations increased drastically in 2015. More ads are distributed in mobile marketing by advertisers, especially during summer holidays, National Day holidays, 11/11 sales, and Christmas holidays

Source: TalkingData Mobile Data Research Centre


User insights

App development

Equipmentbrands



Traditional industry

Government institutions

Mobileinternetleaders

Rapidly embracing mobile internet: promoting the transformation/upgrading of business models, increasingly digital marketing for customer acquisition with the help of mobile devicedevices.

Guided by the "Internet+" strategy: government apps start to emerge. Local governments are leading the wave in the transformation to mobile governance, and users have strongerdemand over apps related to people's livelihood.

Mobile internet leaders are working to accelerate business integration, by building their own ecosystems on mobile devices to drive user traffic and retention


Traditional industry, government institutions and mobile internet leaders are all accelerating cross-sector integration

Traditional retailer

Following changes in consumption habits

Business Model/Channel

Real estate

Consolidating industry position

Extension of online business

Living Here

Hengfang-tong

Country Garden Sale

System

Travel

Enhancing competitive edge in self-operation & direct selling

Compete for online traffic

Air China China Southern Airlines

Huazhu Plateno Club

Intime.com Rainbow Feiniu.com


Source: TalkingData research, public available information

Traditional industries: promoting the transformation/upgrading of business models, increasingly digital marketing for customer acquisition with the help of mobile device

Government portals

Life Service

Shenzhen Gov online

Beijing at your

service

My Nanjing Zhejiang Gov affairsCCDI.gov

Shenzhen Bus

Shenzhen Weather

Easy Ride Beijing Realtime Bus 0.00%

0.02%

0.04%

0.06%

0.08%

0.10%

0.12%

0.14%

Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15

User coverage growth of typical government apps related to people's livelihood in 2015

Beijing Realtime Bus Shenzhen Bus Easy RideSmart Social Insurance

Shanghai Housing

Accumulation Funds

E-State Grid

Mobile 110


Source: TalkingData research, publicly available information

An app for Acquiring Beijing bus routes and schedules.

Appling information of traffic conditions , bus, parking, etc. in Shenzhen.

An app for Acquiring bus routes and schedules in Shenyang.

Government institutions: Local governments are leading the wave in the transformation to mobile governance, and users have stronger demand over apps related to people's livelihood

Mobile internet leaders: working to accelerate business integration

Other Leadingplayers

Hardware Producers

BAT

Making cross-sector attempts into hardware market

Capturing app market growth

Accelerating for an all-sector "eco-system"

With the best traffic resources, BAT are perfecting their own mobile products and are expanding in other emerging sectors, to accelerate the development of their own interlinked ecosystems.

Hardware producers like Xiaomi and Huawei are capturing different elements of the mobile app market through its natural advantages in the hardware market.

Leaders in different sectors like 360 and LeTV are making attempts in the hardware market to expand mobile traffic entrance by entering the device market


Source: TalkingData research, publicly available information

Part 022015 General Annual Report of Mobile Apps

BAT dominates top 20 apps as ranked by app coverage

80.0%73.8%

45.6%40.5%

34.0% 32.5% 31.9% 29.3% 29.3% 28.9% 27.8% 26.9% 25.6% 24.7% 24.5% 24.2% 24.1% 22.3% 21.7% 20.7%

Wechat

QQ Taobao

Alipay

Baidu

Baidu Map

iQiyi

Kugou Music

Weibo

Tencent Video

Sougou Pinyin

WiFi M

aster Key

Youku

MyApp (Tencent)

QQ

Browser

UC Browser

Meituan

QQ

Music

360 Mobile Assistant

Tencent IM Secure

Top 20 mobile apps by user coverage, December 2015

Tencent apps Alibaba apps Baidu apps Others

Of the top 20 mobile apps

with highest user coverage, 16 of them are developed

by BAT. Among them,

Tencent takes the largest share, with 8 Tencent apps

entering the top 20, while 5of the top 20 are Alibaba

apps and 3 are from Baidu.

Source: TalkingData Mobile Data Research Center's Android platform data


BAT is also strong when ranked by most active users

73.0%61.6%

32.6%27.5%23.2%22.7%20.5%20.4%19.2%17.9%15.8%15.1%14.4%12.5%12.0%11.9%11.6%11.4%11.3%10.8%

Wechat

QQ Taobao

Alipay

Baidu

Sougou Pinyin

Weibo

QQ

Browser

iQiyi

MyApp (Tencent)

UC Browser

Tencent Mobile M

anager

Baidu Map

Youku

WiFi M

aster Key

Tencent Video

QQ

Music

360 Mobile Assistant

Baidu Mobile Assistant

360 Mobile Security

Top 20 mobile apps with most active users in Dec. 2015

Tencent apps Alibaba apps Baidu apps Others

17 of the top 20 mobile

apps with most active users are also from BAT. Among

them, 8 apps are from

Tencent. and 360 also contributes 2 apps.

Source: TalkingData Mobile Data Research Center's Android platform data.


24.7%21.7%

16.1% 15.9% 14.6%

9.7%6.0% 5.5% 5.2% 4.6%

Myapp(Tencent)

360 Mobile

Assistant

MIUI app Store

Baidu Mobile

Assistant

Xiaomi G

ame

Centre

Huawei App Store

Oppo App Store

HiMarket

BBK-Vivo App Store

Pea pods (W

andoujia)

Top 10 app stores with best user coverage, December 2015

Third-party app store App store run by hardware producers

Tencent Myapp is the most

popular app store, followed by 360 Mobile Assistantand

MIUI app store. App stores

developed by hardware producers like Xiaomi,

Huawei and OPPO have also gained popularity and

entered the top 10 list.

Tencent Myapp is the most popular app store in 2015

Source: TalkingData Mobile Data Research Center's Android platform data.


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