Mobile internet usage in China’s lower-tiers grows 351% over past three years

GroupM China’s ‘Project Deep Dive’ Maps out Tier-3/4 Consumption Behaviour

SHANGHAI — The latest wave in GroupM China’s ‘Project Deep Dive’ research shows almost third of lower-tier consumers accessing the Internet via mobile devices (20% being smartphones) this year. This usage rate marks an increase of 351% compared to 2009.
Highlighted findings of the latest 2012 wave are revealed below:

While TV still dominates lower-tiers, its decreasing reach has dipped below that of upper-tiers

Since 2007, TV’s average daily reach among ages 15-to-45 in the lower-tiers has been decreasing steadily, after hitting a peak of 94% in 2009, to its current level of 81%.
This represents a faster drop than upper-tier markets, as seen from the percentage-point difference between lower- (81%) and upper-tiers (84%) in 2012.

Positioning of CCTV, Provincial-Satellite, versus Local TV Channels Becomes Much Clearer

Consumer perceptions of each channel have changed since 2007, with provincial-satellite TV having a younger, more innovative and attractive image; CCTV being more reliable, professional, authoritative, responsible and information-rich; while local TV remains more conservative than the rest. These perceptions will greatly influence marketing budget allocations among various TV stations.

Development Pattern of Mobile Internet over Past Three Years Different From Upper-Tiers

The reach of the Internet has replaced outdoor in lower-tier markets to rank second of all media platforms. Internet usage among ages 15-to-45 in lower-tier markets is at 59% in 2012, a growth of 18% compared to 2011. Meanwhile, in upper-tier markets, the growth rate is only 3% on a year-on-year basis.

In particular, the rapid development of mobile Internet usage is prominent. In 2012, 32% of people accessed the Internet through mobile devices – an increase of 351% compared to 2009. The most popular mobile devices are smartphones (20%), followed by feature phones (12%), tablets (2%), and netbooks (1%).

Furthermore, the share of smartphone usage quadrupled from 5% in 2011 to 20% this year. In general, lower-tier consumers spent an average of 12.59 hours on mobile Internet per week – an increase of 3.31 hours versus 2011.

Instant-messaging (93%), searching (27%), e-book reading (22%) and Weibo-posting (18%) are the main mobile activities with higher usage evident among ages 15-to-45.

As a comparison with nationwide averages, CNNIC’s 30th Statistical Report on Internet Development issued in July 2012 showed instant-messaging (83%) and searching (67%) as the top mobile activities, followed by news-browsing (58%) and Weibo-posting (43%).

Multi-Screen, Cross-Platform Usage of PC, TV, Mobile Now More Common

26% of lower-tier consumers are three-screen users, and among this group, 27% of them use them (PC, TV, mobile) simultaneously. 64% are dual-screen over lappers, with 70% of them using the PC and watching TV at the same time. Convergence is also occurring in terms of content, with 70% watching TV programs (currently or already broadcast) via the Internet.


Implications for marketers:

Traditional Media Is Stepping Stone; Digital Media Enhances Ad Reliability
It is risky to put all eggs in either basket. Instead, maintaining media investment in traditional TV while constantly committing to digital communications will achieve synergistic results for marketers.

Proactively Use Mobile Internet as Platform for Brand Experiences
The development path of Internet usage in lower-tier markets is markedly different from that of upper-tiers, typically from PC to laptops to mobile phones. More and more lower-tier consumers have skipped the first two platforms to go straight to smartphones, forming a sizable base for marketers to reach them. Therefore, utilising mobile Internet to improve brand experiences will gain an edge over competitors.

Fierce competition in upper-tier markets has made expansion in lower-tiers the deal-breaker for a brand’s success in the next decade. For marketers, constant attention on lower-tier consumers – their needs, their levels of brand awareness, their acceptability of marketing mixes – is crucial for effective strategizing.

“‘Project Deep Dive’ shows our efforts towards understanding China, as it uncovers the complexity in the most dynamic, varied market in the world. It provides unique value for brands in a better understanding of China’s lower-tier markets and in developing market strategy,” said Bessie Lee, CEO of GroupM China.


About GroupM China
GroupM is WPP’s consolidated media investment management operation, serving as the parent company to agencies including Maxus, MEC, MediaCom and Mindshare.
GroupM is the global leading media investment management group.

GroupM employs more than 1800 people in eight cities across China. With total media billings in excess of US$ 5.11 billion (RECMA: 2011 Definitive), GroupM is China’s number one media communications group and the industry’s biggest investor in syndicated and proprietary media research and optimization tool development.

About GroupM Knowledge
GroupM Knowledge is GroupM’s think tank and knowledge management arm in China. This unit is responsible for industry-wide thought leadership research, exploring issues affecting the media industry in China; working with syndicated research suppliers, and managing the Group’s proprietary tools, research and systems. The unit also manages a media consultancy, advising clients with specific media research requirements.

About ‘Project Deep Dive’
‘Project Deep Dive’ is GroupM’s proprietary research study aimed at tracking the latest consumption trends in lower-tier markets. It combines both qualitative and quantitative research covering a total sample size of 10,000 consumers from 28 provinces, 69 prefecture-level cities, 148 county-level cities, and 408 counties in China, making this research one of the largest in sample size and market coverage.

The projected audience numbers to 620 million lower-tier consumers, equivalent to 46% of the entire Chinese population.

First-hand data and in-depth insights of the media habits, consumption behaviour, brand preferences and values of lower-tier consumers have been gained from four successive waves of this study in 2007, 2009, 2011 and 2012.

Qualitative elements were added in the 2012 wave, using anthropological methods that include in-depth interviews, accompanied visits and focus-group discussions for 312 consumers in eight provinces.