The China Internet Report is an annual piece of research published by the South China Morning Post which looks at the key digital and technology trends in China. Here are the stats marketers need to know about from the latest report.

On Tuesday, the South China Morning Post published its third annual China Internet Report: a high-level overview of the key technology and internet trends dominating China.

In many ways this report is China’s answer to Meeker’s Internet Trends report, although not all of it is made available for free: the report consists of a 53-page free version and a ‘pro version’ with more than 120 pages and six webinars from influential C-suite executives.

Here, I’ve rounded up seven key statistics from the SCMP’s China Internet Report 2020 that marketers should take particular note of – and that should inform brands’ and agencies’ approach to marketing to this massive and growing internet market.

1) China now has more than 900 million internet users – 99% of whom are mobile

We hear over and over about China’s huge and growing ‘mobile-first’ internet demographic – but these figures really hammer it home in a way no tired aphorisms can.

In 2020, China has 904 million internet users – which as Gary Liu, the CEO of the South China Morning Post, very memorably puts it in a video about the report’s top findings, is larger than the populations of the US, Russia, Mexico, Germany, the UK, France and Canada combined – of whom 897 million are mobile. That’s 99% of China’s internet population who are mobile.

However, huge as China’s internet population already is, it’s still only 63% of China’s total population (1.3 billion people) which just shows how much room there still is for growth.

As a comparison, the United States has an internet population of 298 million users (out of a total population of 331 million), of whom 276 million are mobile. That’s 93% of internet users with access to mobile internet, which is still very high (and goes to show how important mobile is in the west as well as in China) – but not quite as high as China.

The report goes on to note that from 2019 to 2020, China’s mobile internet population grew by 80 million – compared with just eight million in the US.

2) More than half of China’s population uses mobile payments

China’s internet users don’t just browse the internet on their mobile devices – they’re widely used for payments. If you follow digital in China at all, you’ve probably heard that QR codes are a ubiquitous mode of payment in China, with digital wallet solutions like WeChat Pay and AliPay providing a means for Chinese people to purchase any number of things with a quick contactless smartphone payment.

Altogether, China has 765 million users of mobile payments in 2020, or 53% of the country’s total population. This is compared with just 63 million users in the US – only 21% of the country’s total population. It’s a very clear reminder of how much higher the penetration of mobile payment technology is in China.

Between 2019 and 2020 the volume of mobile payment users grew by 185 million in China, compared with seven million in the US.

3) China is predicted to have 40% of the world’s 5G subscribers by 2025

SCMP’s China Internet Report 2020 calls 2020 “the year of mass adoption for 5G” in China, pointing to the massive 5G infrastructure push taking place across China – worth US $25 billion – and the flood of affordable 5G smartphone models being released throughout the year.

It also notes that China’s consumers have the highest intention to upgrade to 5G compared with markets like South Korea, the US and the UK, with 70% of Chinese consumers reportedly planning to upgrade to 5G versus 61% in South Korea, 42% in the US and 23% in the UK. A full 78% of China’s 5G fans are also willing to pay extra to upgrade.

Source: China Internet Report 2020

By the year 2025, the China Internet Report estimates that 5G will account for almost half of China’s mobile connections with two-fifths of the world’s 5G subscribers residing in China. Between 600 and 800 million Chinese people are predicted to have 5G subscriptions by 2025, up from an estimated 160-175 million in 2020.

Chengdu, Sichuan / China, 2019: 5G testing spot provided by China Telecom in Chengdu. Image: B.Zhou / Shutterstock.com

4) Average daily internet use rose to 7.2 hours during China’s lockdown

Countries across the world have seen a rise in daily internet use as locked-down consumers turned in droves to online entertainment and services, both as a way to pass the time and as a way to access necessities like shopping, banking, fitness and more. (Also, workers and students across the world have found themselves using online, remote means of carrying out their work or education).

China has been no exception to that trend – quite the opposite, as in many ways its population is more accustomed to activities such as online shopping compared with other parts of the world – but it’s still striking to see the impact that Covid-19 had on China’s internet use. Between March 2019 and March 2020 (a point at which, unlike most of the rest of the world, China’s lockdown was already at an advanced stage), the average daily time spent on the internet in China rose from 5.6 hours to 7.2 hours – an increase of 29%.

By comparison, between March 2018 and March 2019, average daily time spent on the internet only rose from 5 hours to 5.6 – a 12% increase.

5) Monthly mobile use grew by 14% among China’s over 40s between March 2019 and March 2020

One of the notable impacts of Covid-19 worldwide is that many people who were not previously accustomed to using digital products and services have rapidly become accustomed to doing so. This has particularly included older generations.

In China, the percentage of monthly mobile users aged 41 and older grew by 14% between March 2019 and March 2020. By contrast, monthly mobile use among the 25-40 age demographic grew by only 3.1%, and among under 25s by just 1%.

The impact of this is clear: marketers who want to appeal to China’s internet users need to bear in mind a wider age range than they might have previously been targeting – and they should assume that older users will be included in the demographic of many apps and websites, even those that might traditionally have seemed like the purview of young people.

6) Work productivity apps saw the highest growth in adoption thanks to the lockdown, followed by short video apps

It comes as little surprise that work productivity apps saw a huge surge in adoption between March 2019 and March 2020. In March 2019, work productivity apps in China had 127 million monthly active users (MAUs). This had risen to 435 million by March 2020, an increase of 308 million MAUs, or 242%.

While the lockdown may not single-handedly have been responsible for this increase, it likely played a major part. As confirmation of this, the China Internet Report points out that over the span of 10 days (from the 28th January to the 6th February) three work productivity apps – DingTalk, WeChat Work and Tencent Meeting – rose to become the top three most downloaded iOS apps in China.

Short video apps saw the second-largest increase during the lockdown in terms of sheer number of new users, with MAUs rising by 123 million between March 2019 and March 2020 to reach 870 million. However, this was only an increase of 16%, as short video apps were already popular in China prior to the lockdown.

Source: China Internet Report 2020

7) China’s livestreaming market is predicted to reach 613 million users in 2020

Although livestreaming is popular in many parts of the world for gaming, sports and entertainment, China’s use of livestreaming goes far beyond that. In China, the ‘live commerce’ trend has made livestreaming into a popular channel for browsing and buying goods, as people tune in to their favourite influencers (known in China as Key Opinion Leaders, or KOLs) demonstrating and extolling the virtues of various products.

The China Internet Report 2020 divides China’s livestreaming evolution into three phases: Phase 1, which took place from 2012-2017, saw it used primarily for gaming, sports and teen culture. Phase 2, lasting from 2017 to 2019, then saw the emergence of live commerce and the use of livestreaming for shopping – particularly fast-moving consumer goods (FMCG) – and online companionship, where KOLs would stream normal activities from their day.

Finally, we entered Phase 3 in 2019, in which livestreaming is used for a much broader range of ecommerce activities, and can sell “Nearly any content you can think of – including a US $5.6 million rocket”, which was famously sold by China’s “livestream queen”, Viya, in April. The China Internet Report also explores how livestreaming has been adopted by ‘traditional’ industries like international luxury goods, real estate, travel and automotive, spurred on by the coronavirus and lockdowns. In Phase 3, it seems, no industry is out of reach for livestreaming.

Small wonder, then, that China’s livestreaming market is predicted to reach 613 million users in 2020 – an increase of 19% since 2019 – with a value of US $16.3 billion. If it wasn’t the case before the lockdown, it’s increasingly evident now that brands need to understand the world of livestreaming if they want to market effectively to consumers in China.

Conclusion

There’s plenty more details, statistics and analysis to dig into in the China Internet Report 2020 than the very brief overview I’ve given here. Nevertheless, even from this whistle-stop tour of stats we can see some important trends emerging:

  • China’s internet isn’t just mobile-first. It is mobile. Out of the 904 million internet users currently in China, only 1% are not using mobile devices.
  • 5G adoption will be a major trend to shape China’s internet use over the coming years – especially as upgrading looks to be more affordable in China than it will be in many parts of the world.
  • As with many other parts of the world, the lockdown accelerated trends that were already in place – including the adoption of work messaging apps and short video apps, and the use of livestreaming as a tool to buy from and interact with brands across all sectors.
  • The demographic using digital channels in China has broadened thanks to Covid-19, and we can expect that these new habits will stick among older consumers. It’s worth remembering, too, that China’s internet still has considerable growth potential, with 500 million people in the country who have still yet to come online.