Overview of China Market, Facts about appstores: "Where the apps are," Mobile ad spending- whats ahead, research about consumer apps

1. China and the App Economy
Photo Credit: SocialMediaSEO.net
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2. Outline
• Overview of China Market
• Facts about appstores: “Where the apps
are”
• Mobile ad spending – what’s ahead
• Research about consumer apps

3. Introduction to China’s Mobile Market
• 1,023.7 million mobile subscribers (April 2012)
• 76% of China’s population
• 3 x larger than USA mobile subscriptions
• 159.3 Million 3G users (April 2012)
• 15% of China’s mobile subscribers, global average is 20%
• China’s 3G market grew 28% from Nov. 2011 to March 2012
• 22% of global smartphone shipments in 2012 Q1
“By the end of this year, China will have 350 million
smartphones, that’s more phones than there are people in the
US.”
- Alvin Graylin, CEO of mInfo
3 Source: MobiThinking

4. China’s Unique App Economy
• 80 million new subscribers annually for the past decade
• 40% of internet users connect solely via a mobile phone
• Historically, Chinese have been reluctant to pay for apps
• 62% of iPhone owners have purchased at least one app
• 23% of Android users have purchased at least one app
• A taste for localized content
• Nearly 50% of China’s top 25 apps are in Chinese
• 65% of top 300 free apps are regionally popular only
• Only 20% in USA and Europe
4 Sources: TechCrunch,, BBC and App Annie

5. China’s App Store Data
8 Source: Stenvall-Skoeld

6. Apple’s Chinese App Store
Strengths Weaknesses
• 25 billion apps downloaded • Despite high quantity of downloads,
worldwide ranks 8th in total revenue generated
• China has 2nd highest iOS app • Piracy and jailbreaking of the iPhone
downloads in the world are rampant
• Allows users to download paid
apps for free
• App store revenues grew 213% in
one year (May 2011-May 2012)
• Downloads increased 305%
• In China every iOS app download
generates $0.03
• Every US download generates
• iPhone has 19% market share
$0.28
7 Source :PC Advisor

7. China Mobile’s Mobile Market
• Launched in 2009 • Activity
– November 2011
• 30 Million downloads
87% under 3 RMB ($0.50)
• World’s largest mobile phone •
• Avg. price: 2 RMB ($0.30)
operator • Avg. game price: 6.3RMB ($1.00)
– January 2012
• 150 Million Mobile Market users
• 640 Million phone • 120,000 games and apps
subscriptions (Jan. 2012) • 490 million downloads
5 Source: The Next Web

8. China Mobile’s New Mobile Market
• Previewed July 2012
• Set to launch September 2012
• China Mobile to take 50% of revenues from sales, compared to
Apple’s 30% revenue share
• Will integrate searches from other app stores
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6 Source: Gomo News

9. Nokia’s OVI Store
• 120 million registered customers
• 120,000 apps
• 15 million downloads per day
• 90% of users access in local language
• Top-5 Apps Globally in 2011
– Facebook Chat
– eBuddy Messenger
– WhatsApp Messenger
– High Speed 3D Free
– Skype
9 Source: Nokia

10. China’s App Store Revenue Forecast
3 Source: Stenvall-Skoeld

11. China’s Mobile Advertising
• Potential to reach over a billion people
• Compare to 300 million with internet ads
• Most effective mobile ads combine 3 factors:
• Social Media
• Mobile Phones
• Location-Based Services
Source: eMarketer
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12. China’s Mobile Ad Spending

13. Commissioned mobile market research
• Surveys conducted in May/June 2012
• Focused on casual dining restaurants
• 500 respondents in Tier 1, 2, 3 cities

14. Have you used the restaurant’s mobile app?
Percent of respondents (max = 100%)
6%
10%
No, I don't know there is one
22% No, haven't had the chance to
62% Yes, on my mobile
Yes, on someone else's mobile phone

15. If you were to design the restaurant's mobile app, which of the following features
would you include? Please select top 3.
Games, and other fun activities
Maps, directory or locations
Product Information about restaurant's foods and beverages
Mobile ordering for in-store pick-up
Payment for your order, in place of cash or a debit card Max = 100%
Ability to purchase restaurant's gift cards or e-coupons for your family &
friends
News of other coupons and special offers
Receiving special offers and other rewards, as a member of the loyalty
program
Mobile ordering for at-home delivery
0% 10% 20% 30% 40% 50% 60%
Percent of respondents (top 3 choices allowed)

16. When dining at the restaurant, would you check-in on your mobile phone to
share your location and: _____________ ?
Max = 100%
90%
80%
70%
Percent of 60%
respondents
(more than 1
50%
choice
allowed)
40%
30%
20%
10%
0%
Earn points for current or future Receive discount/offers for your Share discounts and offers received via
rewards from the restaurant's loyalty current or next visit to any of checking in with your friends via social
program restaurant's locations networks, like Weibo or RenRen

17. If you joined the restaurant’s loyalty program, what kind of information would
you be prepared to offer to help it personalize the rewards you received?
None of the info (below)
All of the info
Number of family members
Postal / Email address
Favorite products
Max = 100%
Gender
Your birthday
Name
Mobile phone number
0% 10% 20% 30% 40% 50% 60% 70% 80%
Percent of respondents (more than 1 choice allowed)

18. If another similar restaurant you frequented had a loyalty program that you
could join offering with special offers, exclusive events, and other privileges,
would you be: ___________________ ?
More likely to increase the amount
22% you ate at the other restaurant, but
continue eating at McDonald’s
40% about the same
Likely to increase the amount you
ate at the other restaurant and
decrease the amount you ate at
McDonald’s
Continue eating at the other
restaurant and McDonald’s about
38% the same as before
More likely to increase the
frequency of visit to the other
15% restaurant, but continue eating at
Pizza Hut about the same
50% Likely to increase the frequency of
visit to the other restaurant and
decrease the frequency of visit to
35% Pizza Hut
Continue visiting the other
restaurant and Pizza Hut at about
the same frequency as before

19. China’s Mobile Future
“Don’t look to Japan or Korea to see how consumers will
be using technology, or to the U.S. or Europe.”
“China is the hotbed for how consumers will live in the
global world going forward – and it’s all about mobile.”
– James Fergusson, Global Head of TNS
19 Source: eMarketer

20. This presentation has been prepared by:
Shanghai Headquarters Austin headquarters
Bridge 8, Building 9, Unit 9605 No. 25 Jianguo 1300 Guadalupe St., Ste. 201
Middle Rd., Luwan District Austin, TX 78701
200000 Shanghai, China
For more information please contact:
info@appconomy.com