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Why mobile video is the next big thing in the Chinese Internet market

21 May 2014

Video-Mobile-China

 

With the development of mobile Internet and smart terminals, Mobile video has become a mainstream trend in the Chinese digital scenario, and it is estimated to reach 50% of the mobile traffic by 2019.

All the major video sites in China have their own mobile apps today, and Internet companies and telecom companies are trying to gain more market share in the mobile video market. 

This article will explain what’s going on in China’s video industry, with the latest news, and some suggestions on how to launch a proper video marketing campaign in China.

 

The big picture

Let’s have a look at the data, which presents the bright future of China’s mobile video industry.

In December 2013, almost half of China’s population (500 million) was using mobile Internet, representing an increase of 81% (80 million people) compared with the number of 2012. And among 2013’s new internet users, 73,3% of them prefer to use mobile phones to surf online (source: China Internet Network Information Center, 2013)

 

China Mobile

 

Yet how many people are using Mobile Video Terminals? Over 2013, mobile video has jumped into the top five largest mobile Internet applications.

As you can see, at the end of 2013 the number of China’s mobile video terminal users reached 247 million, representing an increase of 112 million people compared to 2012, with a growth rate of 83.8% (source: China Internet Network Information Center, 2013)

 

Mobile Video China

 

4G network development in China

On December 4, 2013, the Ministry of China Telecommunication officially issued TD-LTE to the three major telecom operators in China: this means China is proceeding in the 4G network era (source: Xinhuanet, 2013) 

Faster communication speeds, lower tariffs and stronger capacity of large volume of data transmission; all of this will definitely help the growth of the mobile video industry in the country.

 

China’s Internet video industry

The competition between China’s internet video sites is very fierce: they have to face the competition of copyright, cloud technology, and several other issues. Currently, there are several video sites flourishing in China’s internet market.

If you want to know more about the main players in China’s online video industry you can check out this report: Understanding the online-video universe of China. 

Video sites in China face a series of issues: profits in the short-term can be low, due to the fierce competition and the high demand of content. Also, because of the special copyright system of China, that forces every video site needs to build a huge copyright procurement team, causing the higher costs of capital, manpower, material and time.

In fact, the hardest competition today is between the most powerful Internet companies in China: Baidu, Alibaba and Tencent (also referred as BAT).

 

BAT China

 

Let’s see what are the strategies adopted by the big players in order to succeed in this complex and fast-moving market.

 

1) Baidu

Last year Baidu – China’s biggest search engine company – acquired video peer-to-peer platform PPS video and merged it with its independent video company, iQiyi.

The merge quickly showed some great results: in March 2013 iQiyi attracted over 9.4 million monthly active users, becoming the largest video-sharing platform in China, and passing the long-time industry leader Youku-Tudou (source: iResearch).

 

Video China

 

2) Alibaba and Youku-Tudou

Alibaba Group, the most powerful e-commerce company in China and at the global level, recently invested 1.22 billion dollars on video sharing platform Youku-Tudou (source: 163 News, 2014). 

With the cooperation between Alibaba and Youku-Tudou, both parties will gain potential profits on the cross-filed marketing. The question is: will Alibaba promote video shopping through the video-sharing platform? We should also keep in mind that last year Alibaba bought the 20% of the biggest Chinese social media site Sina Weibo. 

 

3) Mobile video social applications by Tencent

Aside from having launched successful social platforms such as QQ, QZone and WeChat, Shenzhen-based Internet giant Tencent also has an its own video platform: Tencent video.

Being the only video site that can be integrated inside the WeChat platform, Tencent video is developing very fast under the popularity of Weixin/Wechat, which is the top mobile social app in China, with 600 million accounts and 335 million active users since its launch in 2011.

In the end of 2013, Tencent quietly launch another mobile social app: WeiShi, an eight-seconds short-video sharing application. Tencent is trying to make it popularized under the help of WeChat: the selling point of Weishi is that it has a good integration of text, pictures and videos, and it is compatible with QQ and Wechat. Users can shoot micro videos and share them to WeChat, Tencent Weibo, QZone and other social platforms.

Here is the WeChat profile of popular actresses Yang Mi, that shows the integration with both her WeiShi and Tencent Weibo feeds (picture on the left), and how the WeiShi feed looks like (picture on the right):

Yang Mi WeChat

 

4) China Mobile jumps on the video trend

4G network will let the mobile user have a real full-contact interaction anytime and anywhere. In addition to the video websites and Internet companies (Tencent, Youku, IQIYI), the three major telecom operators (China Mobile, China Telecom, China Unicom) are also very optimistic about mobile video industry.

Currently, China Mobile TD-LTE coverage has more than 100 cities, completed 200,000 base stations, purchased of 100 million units terminal, getting close to 4 million users. Many cities like Hangzhou, Beijing, Guangzhou and other cities already have 4G, and dedicated 4G mobile phone packages services.

Also, China Mobile launched its AND video service:

China Mobile Video 

China Mobile’s AND video will cooperate with CCTV5 (China National Sports Channel), to broadcast the World Cup and other live-events in high-definition.

The attempt is to attract more sports fans through a huge campaign: it is advertised that as long as you have the cell phone in hand, you can watch live video anywhere, fully enjoying the 4G network (source: 163 News, 2014).

 

Mobile video advertising

According to the data from Sohu, Baidu, iQiyi and many other sites, mobile video traffic is over the PC, as in 2019 video traffic is expected to reach 50% of China’s mobile data traffic.

In 2013, mobile Internet completely won the traditional Internet, which highly increase the value of mobile video. Statistics show that in 2013 China’s total TV advertising is 96 billion RMB, while total Internet advertising is up to 102.3 billion RMB.

Ho Weiran – President of the Movie Professional Committee of Guangzhou – said the focus of television advertising industry is moving forward to the mobile video advertising (source: ifeng news, 2014).

 

The opportunity for marketers

It is evident that mobile devices are definitely becoming the battlefield for video and telecom companies.

For better results in web marketing campaign, brands need to choose the most suitable channel. If we want to add videos on a WeChat service account, the best choice would be to choose Tencent video, or the newly-launched WeiShi platform. When it comes to embedding videos on a Sina Weibo page, Youku is till the best option.

Brands should have a strong overall marketing concept in order to manage their different video channels in the most effective way.

Gloria Gao

Gloria Gao

Born in Shanghai, she gained experience in the market research and digital marketing fields by working with international companies in China. She's now social media manager at Young Digitals, where she deals with projects targeting the Chinese market.

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