Demographics

According to the CNNIC, 18-to-24-year-olds are nearly four times as likely to be Internet users than the general population. (Source: eMarketer)

In 2006, there were 46.6 million broadband households in China, representing 12.6% of all online households. (Source: eMarketer)

The number of Internet users in China has increased from 22.5 million in 2000 to 137 million at the end of 2006, representing a growth rate of 508%. Chinese Internet users now represent 34.4% of all Internet users in Asia.

China is now only behind the US for the overall number of users online. Prediction – at the current rate of growth, Chinese Internet users will exceed the 210 million US users by 2009. (Source: eMarketer)

User Behaviour

Out of China’s Internet users, around 38 million ofthem play online games. (Source: Palava Digital)

The number of short message service (SMS) users in China is expected to reach 360 million by 2008, with an expected market value of RMB37 billion. (Source: Analysys International)

Email is an important tool for collecting opinions from peers regarding purchase decisions. 75% of Hotmail®/Windows Live Mail users in China discuss music (MP3s, CDs, etc) via email prior to purchase; 61% of men discuss car purchases; 78% of men and 71% of women discuss electronics and gadgets prior to purchasing; 69% of men and 61% of women talk about mobile phone purchases on email before purchase; and 74% of women and 59% of men exchange their ideas on clothes and accessories purchases via email. (Source: Microsoft Digital Advertising Solutions)

In a survey regarding email etiquette, in reply to the question: “which is the most impolite email habit?”, 64% of Chinese respondents said “sending chain emails”, while only 3% said “using a PDA while out with others”. (Source: Synovate)

Electronics and gadgets (74%) is the most talkedabout topic via email in China, closely followed by education (73%), travel (72%) and social arrangements (72%). (Source: Microsoft Digital Advertising Solutions)

In a survey regarding the effectiveness of different mediums, Chinese respondents said they found the Internet was the most effective in “delivering information” and “being a source of entertainment”. The Internet was not seen as being the most effective in “supporting purchase decisions”, “arousing interest” or “drawing attention”. (Source: Synovate)

In a survey regarding the consumption of news, Chinese respondents said that when a major

disaster or news story breaks, only 19% of them turn to the Internet. That’s compared to 60% of people who turn to the TV. In the past week 22% had gone online to read a blog; 18% had received news on their mobile phones; 13% had emailed some interesting news to a friend; 11% had received a regular, subscribed to news email; and 7% had accessed a news Web site that they had paid to use or subscribed to. (Source: Synovate)

Out of all Chinese mobile Internet users, 72.2% of them use their mobile phones for sending or receiving email; 30.9% for reading news and information; 19.4% for downloading ringtones, movies and games; 6.3% for logging on to communities; 5.3% for their banking; 2.6% for their own blogs and 2.3% for watching online videos. (Source: CNNIC, January 2007)

E-Commerce

China’s retail e-commerce revenues were expected to increase from US$504.3 million in 2005 to US$700.1 million in 2006. (Source: Analysys International)

China’s online travel market in Asia is expected to grow by 71% by 2010. (Source: Euromonitor)

Online Advertising

At end 2006, the market size of the online advertisement industry in China had reached

RMB1.324 billion, representing an increase of 9.53% from Q3. Revenues from key word

advertisements were RMB476 million, representing 36% of the total market and an increase of 14.4% from the Q3. Revenues from column-based advertisements were RMB751million, representing 56.7% of the total market size and an increase of 6.68% from the Q3. (Source: Analysys International)

In May 2006, 587 online display advertisers ran nearly 1,500 campaigns consisting of more than 3,700 banners. In July 2006, 817 online display advertisers ran 2,276 campaigns consisting of 5,785 banners. (Source: Nielsen//NetRatings)

During the May-September period of 2006, there was a total of 3,795 online advertisers in China, running 10,136 campaigns (at an average of 2.7 each), posting 25,023 banners and generating 285 billion ad impressions. The total ad expenditure in that period was RMB2.3 billion. Of that expenditure, 26% of it went on automotive advertisements; 23% on computers and electricals; and 10% on FMCG advertising. Just 7% of online ad spend went on fashion; 6% on auctions and classifieds; 4% on media; 3% on entertainment; and 3% on property. (Source: Nielsen//NetRatings)

During the January-June period of 2006, out of the RMB2 billion spent on online advertising, 60% (RMB 1.25 billion) went on display advertising; 33% (RMB 697 million) on search engines; and 7% (RMB139 million) on classifieds and other forms of ads. (Source: Nielsen//NetRatings)

In 1H 2006, Sina.com led the portals, owning 20% of China’s online advertisement market, worth RMB420 million in ad revenues; Sohu.com had 14% market share earning RMB290 million; Netease.com with 6% generated RMB130 million; QQ.com and its 5% earned RMB100 million; while Tom.com had 3% share worth RMB50 million. (Source: iADTracker 3.0, iResearch Consulting Group “China Online Advertising Research Report”)