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G+1 | Hot mobile topics in China’s 2011: LBS, Mobile Advertisement, Android

Last week, the GWC Mobile Industry China Panel took place, in cooperation with the French conference LeMobile2.0. LeMobile2.0 was held in Paris on March 8-9, 2011, and the Mobile Industry China Panel live-streamed to Paris. The event look place in the Cheung Kong Graduate School of Business, and the following panelists gave their insights into the Chinese mobile Internet market: Madhouse COO, Dan Wong; mAPPn CEO, Terry Tan; Orange Lab Beijing Vice President, WANG Song; PapayaMobile CEO, SHEN Si; and Youlu Co-Founder, Richard Robinson.

 

From the marketing perspective of madhouse COO Dan Wong, mobile internet became a mass media in 2010: over 850 million mobile subscribers and 350 mobile Internet users in China, with continuing rapid growth. This medium, being 24-7 with the consumer, is becoming more and more suitable for brands from an advertisement point of view.

But, he added, China has not yet caught up with other parts of Asia. Mobile advertisement accounted for only 0.2% of the whole advertising market in 2010. This shows that mobile marketing does not yet show the pace with which the rest of the mobile Internet industry is growing: there is no translation of interest into real money yet. The scale of only 500 to 800 million RMB in 2010 leaves a lot of space for growth and opportunities in 2011.

Better devices and LBS push mobile services

Changes in devices are especially interesting for mobile advertisement. With suitable screen sizes (320px and above) in around 3% of the phones in mid of last year, the number has increased to 30% until the end of 2010. Higher quality screens and also the increased usage of WiFi brought new options for mobile advertisement, such as high-quality video streaming. Interesting in terms of mobile ad campaigns are also location based services (LBS), with an expected growth of over 50% for these kinds of ad services in 2011.

 

LBS will definitely be one of the main topics in 2011 and will help to expand the mobile service industry. Location based services will expand further both vertically and horizontally, cooperating with established social media services at the market. The partnership of Jiepang.com with the Sina microblog has shown fruitful results. Young services are able to take advantage from the big enterprises active in Chinese social media, but still lack a clear business model for the future, as WANG Song from the Orange Labs pointed out.

Future revenue models are only one of the questions arising for companies offering location based services in China. Besides facing difficulties in finding suitable partners such as mobile operators, future scalability and the question of user privacy play an important role in terms both of choice of platform and the application itself.

Android in the spotlight

The story of CEO Terry Tan’s leading smartphone community, mAPPn, showed which influence Android had in 2010 and will continue to have this year. mAPPn moved to Beijing in 2010 with less than 20 employees and 20 Android developers, and now  grew to a 2 million user strong community with over 3.000 developers. Despite a lacking official app store for Android in China, 10% of the mAPPn applications are charged in China.

The openness of Android is clearly of advantage and a driver for its success, but it also leaves the device manufacturers alone when it comes to developing a unique product with its USP. As PapayaMobile CEO SHEN Si shared her experience from conferences CES, MWC and GWC; companies now are trying to diversify their phones with features like 3D display, Sony’s Playstation phone or the Facebook phone, with social networking as a central feature.

Richard Robinson, Co-Founder of Youlu, a contact-centric application for mobile phones, sees the development of mobile currently more as hype than reality. But with a look at the Japanese market with 8 to 10 billion USD and high profits, it becomes quite clear that there will be similar opportunities also in the Chinese market. The prejudice of no creativity and innovation in China is far from true, and Chinese companies like QQ, Baidu and Alibaba with Alipay are now moving on to foreign markets.

To learn more about the Chinese and global mobile Internet market from the participants and many more insiders, we recommend you to join the Global Mobile Internet Conference in Beijing in Arpil 27-28. Over 2000 participants, including leading executives, consultants, investors, entrepreneurs and developers from >20 countries, will discuss the New Challenges, New Opportunities and New Leaders of the global mobile Internet market. Register at http://gmic.greatwallclub.com/register.

About the Author

Arndt FockeResearch and Consulting Manager at GWC, Arndt is also the author of the organization’s GWC Insights and GPORT reports. His past experience includes innovation and technology management, and technology strategies in the ICT industry.

Follow Arndt Focke: Twitter @arndtfockeArndt Focke Linkedin

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