Febuary

2011

China Social Media Marketing

Mike Froggatt mfroggatt@emarketer.com
Report Contributor Hilary Rengert

Executive Summary: China is an essential country for marketers that plan to expand into Asia. Its GDP continues to climb at more than 10% year over year. As a result, an increasingly affluent culture is developing beyond megacities like Beijing and Shanghai, and brands have to expand their reach into these markets.
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Social Network Users in China, 2009-2015 millions and % change

488 84% 395 329 265 207 155 447

Internet users in China are increasing in number and experience every day. As penetration approaches saturation, users are adopting activities that mirror the West but remain distinctly Chinese. They have innovated in categories as diverse as online entertainment, group buying and social media. In particular, they show a zeal for social networks. Social network users in China will more than double in number, from 207 million in 2010 to 488 million in 2015. Individuals in China use social networks to communicate with family, friends, brands and the government. Several studies show they enthusiastically follow brand and product websites, forums and social network sites, often promoting favorite products to their numerous online connections. The increased use of social media presents nearly limitless opportunity for brands to engage consumers. However, social media marketing is a tool to get a foot in the door. Aspiration can be a strong motivator for purchases, and brands can benefit from the increased prestige perceived by social media users in China. Key Questions

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Note: internet users who use social networks via any device at least once per month Source: eMarketer, Jan 2011
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The eMarketer View China Online Spotlight Social Media in China Conclusions Endnotes Related Information and Links

2 2 3 8 8 9

What are the most popular social media sites? How many people use social media in China? What are the largest demographic groups using social media

in China?
How do internet users in China interact with brands on

social media?

Digital Intelligence

Copyright 2011 eMarketer, Inc. All rights reserved.

The eMarketer View

Key eMarketer Numbers: China Social Media
740 million 488 million 66% $9.5 billion Internet users in China in 2015, up from 530 million in 2011 Social network users in China in 2015, up from 265 million in 2011 Social network users in China % of internet users in 2015, up from 50% in 2011 Online ad spending in China in 2014, up from $4.6 billion in 2011

China Online Spotlight

Growth is the general theme of nearly every article, report or analyst opinion about China, regardless of industry or topic. Growth applies also to internet users, online ad spending and social media usersthey are rising at rates not seen in mature markets since the early days of the internet.
eMarketer estimates there were 450 million internet users in China in 2010. That number is expected to reach 740 million by 2015.
Internet Users and Penetration in China, 2009-2015
2009 2010 2011 2012 2013 2014 2015 Internet users (millions) % change % of total population 379 35% 29% 450 19% 34% 530 18% 40% 610 15% 45% 670 10% 50% 710 6% 52% 740 4% 54%

Source: eMarketer, Feb 2011

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The number of internet users in China will continue to grow at double-digit rates through 2013. More internet users means social media will see dramatic growth. Much like in the West, internet users in China will adopt social networks as their online home for communicating with friends and family, as well as entertainment. Social networks will become increasingly important for brands in China. Social media users in the country are avid followers of official product and brand websites, including blogs, microblogs and social networks. These sites increase interaction, transparency and relevance to internet users while also amplifying a brands message, for better or worse. Studies show that social media users in China are likely to be influenced by social media marketing and recommend a favorite brand or product to their online networks. Homegrown social networks are expanding their user numbers and innovating new features rapidly. Although social networks in China will increase reach, sites often have very specific audiences. Choosing how and where to target these audiences can determine whether social media campaigns are successful or flop.

Note: individuals of any age who use the internet from any location via any device at least once per month Source: eMarketer, Jan 2011
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Internet user penetration will reach 50% in 2013, nearing saturation in large cities and among Chinas youth. As a result, growth will slow significantly, but saturation will provide widespread benefits as more experienced and sophisticated users increase the effectiveness of online advertising.

In the long term, the consumer boom in China is a given. It is one of the most important opportunities for any company to grab in the market. Jerry Lou, strategist at Morgan
Stanley Hong Kong, in a webcast, November 9, 2010

China Social Media Marketing

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Marketers are increasing money spent online trying to capture this large potential audience. eMarketer pegs total online ad spending in China at $4.6 billion in 2011, an increase of 24.3% over 2010.
Online Ad Spending in China, 2009-2014 billions and % change
$9.5 (25.0%) $7.6 (22.6%) $6.2 (34.8%) $3.7 (37.0%) $4.6 (24.3%)

Social Media in China

Social media in China has taken off even faster than in the US. According to data from Analysys International, social network users increased tenfold, from 21 million in 2006 to 216 million in 2010, at a compound annual growth rate (CAGR) of 59.4%.
Social media sites in China are similar to Western sites, including social networks, microblogs, social games and group buying sites. Some, like Renren and Sina Weibo, are mirrors of blocked international sites like Facebook and Twitter. However, labeling social media in China as mere clones of their international counterparts is misleading. Social media sites often debut new features for their users at a dizzying pace, trying to stay ahead of competitors that are more than willing to copy successful ideas. Social medias feature-rich content and highly connected user base have led to significant growth and staggering user totals. eMarketer projects social network users will continue to increase at a compound annual growth rate at a CAGR of 18.7% from 207 million in 2010 to 488 million in 2015.
Social Network Users in China, 2009-2015 millions and % change
488 84% 395 329 265 207 155 447

$2.7 (17.4%)

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Note: includes search, display and other; excludes Hong Kong; converted at average 2009 exchange rate of RMB6.84:US$1 Source: eMarketer, Oct 2010
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Several indicators suggest that the China consumer market will become even more important in the growth plans of multinational companies. A 2010 Morgan Stanley briefing on China outlines several factors that coincide with findings in this report, including demographics, urbanization and consumer finance. As individuals in China continue to spend their disposable income online, the internet and other former luxuries will become more commonplace. Urbanization will encourage the adoption of the internet as a cheap and convenient form of communication among migratory workers.

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Note: internet users who use social networks via any device at least once per month Source: eMarketer, Jan 2011
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China Social Media Marketing

Copyright 2011 eMarketer, Inc. All rights reserved.

eMarketer estimates that social network penetration in 2010 was 46%. This is fairly conservative due to the inclusion of users of all ages. UM, TNS, the China Internet Network Information Center (CNNIC) and Pew Research Center reported slightly higher penetration rates because they excluded older survey respondents. However, taking away the highest outlier, UM, estimates of penetration fall within a range of 11 percentage points.
Comparative Estimates: Social Network Users in China, 2010 % of internet users
% of internet users UM, Oct 2010 TNS, Oct 2010 CNNIC, Jan 2010 Pew Global Attitudes Project, Dec 2010 eMarketer, Jan 2011 Trendstream, July 2010 68.4% 54.0% 51.4% 50.0% 46.0% 46.0% Age 16-54 16-60 6+ 18+ All ages 16-64 18+ Usage Manage a prole Daily access Use Have ever used Use at least once per month Manage a prole Use

Top Sites Marketers in the US are beginning to realize the potential that social networks in China have to reach consumers in the country. Big companies like Tencent, Baidu, Alibaba.com and Sina are making headlines worldwide every day. By their sheer number of users, local social networks in China, including Renren, Kaixin001 and Sina Weibo, often more than stack up to worldwide competitors like Facebook, Myspace and Twitter. Tencent QQ Tencent, one of the largest internet companies in China, runs several social networks and social gaming platforms. A majority of its profits are derived from premium services and microtransactions, and its efforts to launch a real-name social network have been slow to gain traction. QQ and Qzone, Tencents instant message platform and associated portal, boast 600 million accounts but do not require users to register with a real name. As a result, multiple accounts are common. Renren Renren, the largest true social network, reported it had 160 million registered users and 28 million daily users at the end of 2010. These comprised mostly users from second- and lower-tier cities and students. Kaixin001 The latest figures available for Kaixin001, as cited by BloggerInsight, estimated the total online population at 120 million in 2010. The site reported that Kaixin001 drew its users from white-collar professionals in first- and second-tier cities. 51.com BloggerInsight also estimated that 51.com, an older social network, had nearly 160 million users. These users were mostly rural and not very active due to lack of internet access in the home. Sina Weibo According to the DCCI, microblog users reached 65 million in 2010. A whitepaper by Incitez, a digital marketing firm in China, found that Sina Weibo was the most popular and used microblog site, with more than 60% of total microblog users. Other popular platforms included NetEase, Tencent, Sohu, ifeng and 139 from China Mobile. Marbridge Daily reported that Sina Weibo grew at an average of 10 million users per month since officially launching in April 2010, and expects to reach 150 million in 2011.

InSites Consulting, 43.0% March 2010 Source: various, as noted, 2010 & 2011
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For additional information on this chart, see the Endnotes section.

Pews Global Attitudes Project found that social network usage in China lagged behind many countries, but was ahead of other large Asian markets, including India, Indonesia and Pakistan. The mobile internet will play a major role in the spread of social networking in China. eMarketer estimates there will be 526.4 million mobile internet users in 2011. In a separate study, the Data Center of China Internet (DCCI) estimated that 50.2% of mobile phone users participated in mobile social networking in December 2010. As more users adopt 3G phones and subscriptions, these figures will increase simultaneously; Morgan Stanley projects that by 2012 there will be 220 million 3G subscribers, who will make up 16% of total mobile subscribers. Competition in mobile social networking is heating up. Japanese mobile social gaming leaders GREE and DeNAs Mobage-town recently announced plans to launch in China by partnering with local internet firms Tencent and Tx.com.cn, respectively.

China Social Media Marketing

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According to a first-time survey from Sheraton Hotels & Resorts, 28.6% of microblog users in China, including users of Weibo, checked social networks multiple times an hour, while LinkedIn and Kaixin001 users followed closely behind at 27.8% and 27.0%, respectively.
Frequency of Social Media Usage in China, by Site Used, June 2010 % of respondents
Multiple times an hour Kaixin001 LinkedIn Myspace Microblogs 27.0% 27.8% 17.4% 28.6% Throughout the day 32.4% 35.6% 26.1% 27.1% Once daily 17.1% 17.8% 17.4% 20.0% Weekly Rarely

Geography can play a role in how users access social networks. Different regions in China are classified with tiers. Synovates syndicated Media Atlas China report ranked tiers from 1 to 5 as well as rural categories. Tier 1 consists of megacities with populations of 35 million or more, and residents are classified as more affluent, educated and connected via social networks. The further one gets from megacities, especially for tiers 3 through 5, the less connected the population: Fewer people regularly purchase the latest consumer electronics or pay for home access to the internet. Time Spent According to the Boston Consulting Group (BCG), internet users in China averaged the second-highest amount of time spent online among Asias largest markets. In 2009, users spent an average of 2.7 hours per day online, projected to reach 3.1 hours by 2015.
Time Spent Online per Day by Internet Users in Select Countries in Asia-Pacic, 2009 hours
Japan China Indonesia India 0.5 0.9 2.9 2.7

9.0% 7.8% 21.7% 14.3%

14.4% 11.1% 17.4% 10.0%

Note: numbers may not add up to 100% due to rounding; read chart as saying 20.0% of microblog users access social media once daily Source: Sheraton Hotels & Resorts, "Social Media Survey" conducted by StudyLogic, Nov 17, 2010
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Demographics Pews Global Attitudes Project revealed that younger users were more likely to access social networks in China than older users. Usage diminished as age increased: 49% of 18- to 29-year-olds used social networks compared with 21% of 30- to 49-year-olds and 4% of users ages 50 and older. The Sheraton survey found that respondents in China were avid consumers of social networks: 26.2% of users checked their profiles more than once an hour, while 30% checked throughout the day. Only 13.1% said they rarely checked in.
Social Network Users in China, by Frequency, Age and Gender, June 2010 % of respondents
Multiple times an hour Gender Male Female Age 22-31 32-41 42-51 Total 47.7% 10.6% 20.0% 26.2% 38.6% 25.5% 27.5% 30.0% 6.8% 23.4% 25.0% 18.5% 6.8% 17.0% 12.5% 12.3% 23.4% 15.0% 13.1% 33.8% 17.5% 23.5% 38.1% 20.6% 15.9% 13.2% 11.1% 8.8% 17.5% Throughout the day Once daily Weekly Rarely

Source: Boston Consulting Group, "China's Digital Generations 2.0," May 1, 2010
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While greater time spent is usually in direct correlation with broadband access, mobile access plays a dominant role in China and other emerging markets. In a survey by Fleishman-Hillard and Harris Interactive of consumers in Canada, China, France, Germany, Japan, the UK and the US, China ranked first in time spent with mobile phones at 6.3 hours per week.

Note: numbers may not add up to 100% due to rounding Source: Sheraton Hotels & Resorts, "Social Media Survey" conducted by StudyLogic, Nov 17, 2010
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The Sheraton study showed that social network users, especially young men, are logging on frequently and racking up time spent in the process. Younger users dominated, with nearly half of respondents ages 22 to 31 logging in multiple times an hour. Males were more likely to check their networks multiple times, at 33.8%, compared to only 17.5% of females.

China Social Media Marketing

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According to comScore, internet users in China spent only 7% of their time online with social networks during June 2010. However, this figure excluded access via mobile phones and internet cafes, which are very popular channels in China.
Average Time Spent on Social Networks Among Internet Users in Select Countries, June 2010 % of total time online
Russian Federation Philippines Indonesia Malaysia Puerto Rico Turkey Taiwan Netherlands 7% China 4% 3% 7% Japan Vietnam 15% 11% 10% South Korea 28% 26% 25% 31% 34% 45%

Social media users surveyed by OgilvyOne Worldwide indicated that following or friending a brand was the second-most-popular activity on social networks, tied with sharing links. In comparison, comScore found that only 14% of US Twitter users followed a business or brand that they like.
Social Media Activities in China, April 2010 % of social media users
Pimp up my avatar Follow/friend brands on social networks Share links Play games Use location-based services Try augmented reality Use tag clouds Customize my homepage Use cloud computing RSS feeds 55% 87% 87% 84% 80% 76% 75% 71% 67% 93%

Source: OgilvyOne Worldwide, "Frands: Friends, Brands and Social Media in China" conducted by China Polling, July 15, 2010
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Note: ages 15+; home and work locations; excludes trafc from public computers (i.e., internet cafes) and access from mobile phones and PDAs Source: comScore, "Data Passport Second Half 2010," Sep 20, 2010
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Also, comScores figures exclude blogs and microblogs, such as Tencents Qzone and Sina Weibo. TNS Research Internationals 2010 Social Media in China report found that users top two social media services included forums/bulletin boards and blogging. Social Media Marketing: Online Brands in China Individuals in China are more than willing to recommend a product, service or business venture to their family and friends. As more users increase their experience on the internet, they become more trusting of online product recommendations, reviews and ads. They are likely to promote their favorite products to their online networks in an effort to be the first to do so. These brand ambassadors, to borrow a term from Western marketers, can be invaluable. Sam Flemming, CEO of CIC China, which monitors Chinese social network activity, said that internet word-of-mouth has the potential to transform the relationship between brands and consumers. Flemming said that as more people in China sign up for social networks like Renren, Kaixin001 and Sina Weibo, conversations about brands are increasing exponentially. Internet users in China are actively discussing brands on social media; brands have the opportunity to listen in and engage this audience.

As a result, social media users in China are adept at mentioning and interacting with brands online. According to Edelman and Brandtology, in Q2 2010 some of the top brands ranked by mentions in China were Sony, Nokia and AMD. Samsung, which held the top spot in the survey, had 322% more mentions than during the previous quarter, most likely on the strong release of popular new Android smartphones.
Top 10 Brands Mentioned Online* in China, Q2 2010 thousands of mentions and % change vs. prior quarter
1. Samsung 2. Sony 3. Nokia 4. AMD 5. Canon 6. Google 7. Microsoft 8. ASUS 9. China Telecom 10. Intel 15.2 15.1 13.5 (39%) 13.3 (146%) 12.4 11.8 (116%) 11.7 21.4 (322%) 18.5 (261%) 16.8 (167%)

Note: *includes blogs, forums and online news outlets Source: Edelman and Brandtology, "Asia Pacic Digital Brand Index 10.3 (DBI 10.3)," Aug 12, 2010
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China Social Media Marketing

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Internet users in China ranked the influence of microblogs the highest in a January 2010 worldwide poll by Fleishman-Hillard and Harris Interactive. A full 95% of respondents indicated that they trusted a brand more when it had a microblog associated with it. The transparency and ability to directly interact with companies was very important to internet users in China, ranking far ahead of the other countries included in the survey.
Change in Trust Level Toward Companies with a Microblog, Jan 2010 % of internet users in select countries
China 46% Japan 33% France 25% 4% Germany 12% US 6% 16% 22% 21% 42% 3% 68% 67% 71% 7% 76% 6% 49% 5% 4%

Friending a brand, participating in a competition, and recommending a product or brand to friends registered well among social media users in China, each with 43% usually participating.
Frequency of Online Brand Engagement, April 2010 % of social media users in China
Watch commercials on Youku and others 71% Search for a brand online 62% Visit a product, brand, campaign site 59% Download branded apps to phone 51% Read blogs produced by brands 49% Recommend product/brand to friends 43% Take part in branded competitions 43% Friending a brand 43% 57% 58% 60% 62% 67% 77% 79% 76% Get free items in exchange for branded messages 42% Provide feedback to a brand 40% Discourage friends from buying brands I do not like 38% Post product or brand reviews 33% Blog about a brand, product or service 23% Make a video about a product and brand and share 21% Would not interact with favorite brands online 24% Usually Rarely 38% 41% 49% 51% 57% 57% 29%

Canada 15% 3% UK 11% 3% Trust it a lot more No difference Trust it a little more Trust it less

81% 6%

Note: n=4,243; numbers may not add up to 100% due to rounding Source: Fleishman-Hillard and Harris Interactive, "Digital Inuence Index: Understanding the role of the Internet in the lives of consumers," June 23, 2010
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OgilvyOne Worldwide found that social media users in China relied on official product pages or blogs as well as internet searches for information on brands. The most frequent activities were watching commercial videos on Youku, search, and visiting a product or brands official website.

Source: OgilvyOne Worldwide, "Frands: Friends, Brands and Social Media in China" conducted by China Polling, July 15, 2010
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China Social Media Marketing

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Conclusions
For many users, social media is the internet. China is adding internet users at a pace not seen anywhere else in the world. This segment of consumers represents a well-connected, young and increasingly affluent group. Social media, including blogs, bulletin boards, microblogs and social networks, has become a primary means of communication online as people follow jobs from rural areas to cities. Social networks grow through word-of-mouth. This has resulted in broad generalizations of social networks targeted at demographic splits of kids, students and professionals, but also divided by geography and lifestyle. Sites are developed locally but quickly incorporate features seen on other social networks worldwide. This segmentation allows marketers to easily choose which social network to advertise on based on the targeted audience while also utilizing the latest features available. Social networks will become increasingly important for brands in China. Social media users in the country are avid followers of official product and brand websites, including blogs, microblogs and social networks. These sites increase interaction, transparency and relevance to internet users while also amplifying a brands message, for better or worse. In addition, studies show that social media users in China are more likely to be influenced by social media marketing and recommend a favorite brand or product to their online networks. Many brands are already being discussed and scrutinized by social media users. Participating in the conversation, if not directing it, can give marketers an edge on what consumers expect or want from their products.

Endnotes
Endnote numbers correspond to the unique six-digit identifier in the lower left corner of each chart. The charts from the report are repeated before their respective endnotes.
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Comparative Estimates: Social Network Users in China, 2010 % of internet users
% of internet users UM, Oct 2010 TNS, Oct 2010 CNNIC, Jan 2010 Pew Global Attitudes Project, Dec 2010 eMarketer, Jan 2011 Trendstream, July 2010 68.4% 54.0% 51.4% 50.0% 46.0% 46.0% Age 16-54 16-60 6+ 18+ All ages 16-64 18+ Usage Manage a prole Daily access Use Have ever used Use at least once per month Manage a prole Use

InSites Consulting, 43.0% March 2010 Source: various, as noted, 2010 & 2011
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Extended Note: China Internet Network Information Center (CNNIC) defines an internet user as a Chinese citizen who accessed the internet over the past six months. CNNIC data is for December. eMarketer defines social network users as internet users who use social networks via any device at least once per month. Trendstream measures monthly usage from a PC; 2010 data is for January. UM measures users with daily or every other day internet access. Citation: China Internet Network Information Center (CNNIC), 27th Statistical Report on Internet Development in China, Jan 19, 2011; InSites Consulting, Social Media Around the World, March 22, 2010; Pew Research Centers Global Attitudes Project, Computer and Cell Phone Usage Up Around the World: Global Publics Embrace Social Networking, Dec 15, 2010; TNS, Digital Life, Oct 10, 2010; Trendstream and Lightspeed Research, Global Web Index Wave 2 as cited in company blog, July 6, 2010; UM, The Socialisation of Brands: Social Media Tracker 2010, Oct 1, 2010

China Social Media Marketing

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Related Information and Links

Related Links 51.com http://www.51.com Analysys International http://english.analysys.com.cn China Internet Network Information Center http://www.cnnic.cn Data Center of China Internet http://www.dcci.com.cn Kaixin001 http://www.kaixin001.com Morgan Stanley Research Global http://www.morganstanley.com/institutional/research Pew Research Center http://pewresearch.org Renren http://renren.com Sina Weibo http://t.sina.com.cn Tencent QQ http://www.tencent.com/en-us/index.shtml Contact eMarketer, Inc. 75 Broad Street Floor 31 New York, NY 10004

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China Social Media Marketing

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