China online shopping market reached 1.8 trillion yuan in Q3 2017 with a growth rate of 37.5% YoY. Mobile shopping growth slowed down to 35% and reached 1.4 trillion yuan according to Analysis.

The ARPU Average Revenue Per User of both Tmall and Jingdong continue to rise to as high as 273 yuan and 258 yuan respectively.

Read more here.

Total monthly active users of China’s short video platforms grew to 244 million in Q3 2017 according to data from Analysis. The daily active users is close to 86 million.

Short video content recommendation and aggregation platforms also grew to 72 million MAU with close to 22 million DAU in Q3 2017.

On average, an short video platform user launches the application about 51 times per day, down from 61 in July 2017. The average usage time also dropped to 6.64 minutes per day.

Similarly for short video aggregation platforms, the launch frequency and usage time both dropped across the third quarter of 2017.

The top short video platforms in China by usage penetration are Miaopai, Kuaishou, iXigua, Meipai,and Tudou.com.

Demographic profile of short video users in China in Q3 2017

Check out China video advertising market here.

According to recently published report by Analysys, “China Online Banking Quarterly Forecast Report for 2017 Q3”, the total online banking transactions amounted to 48.15 billion, reflecting a 4.3% decrease when compared to the same quarter previous year.

The decrease includes a decline in personal online banking. Corporate banking activities have been comparatively active, with corporates doing bank transfers, salary disbursements, tax payments and other transactions, thus leading to a steady growth within the corporate online banking sector.

For Q3 of 2017, ICBC, China Construction Bank, Bank of Communications and Bank of China are the respective top 4 performing banks in the market, occupying a total of 62.4% of the market share. CMBC ranks 5^th placing with 7.3% of market share.

From the perspective of product innovation, SPD Bank has especially come up with an online cloud system, an integrated platform called “e企行” to resolve the pain points faced by small and medium-sized businesses during its growth phase. The online platform provides access via both PC and mobile apps, providing a low-cost, efficient and smart user experience for businesses.

On the other hand, CGB has released a new generation of verification tool for internet banking – Bluetooth Key token which can be accessed via USB on PC and also connect to mobile phones via Bluetooth. The initiative by CGB satisfies the needs of the customers for a safe yet fuss-free way for verification.

Whereas from the angle of marketing activities, the focus of marketing activities is to boost activities, hence the marketing campaign will be attractive as long as customers qualify for lucky draws or other benefits when they perform a specific online banking transaction.

The spending power of 250 million Chinese post-95s

China’s three major telecoms operators recently released earning data for the first three quarters of 2017. China Mobile is the largest of the three and possesses obvious strengths; China Telecom is experiencing rapid growth; China Unicom has finally hurdled recent difficulties and reported an increase of 155% in net profits, but this still leaves it with profits 22 times lower than those of China Mobile.

Highlights

Regarding 4G users, China Unicom and China Telecom combined had a total of 328 million 4G network users, versus China Mobile’s 622 million; however, as of June, the former two had less than half the 4G users of the latter, suggesting that the gap is narrowing, albeit slowly.

China Telecom has a commanding lead in the broadband business, and had 131 million broadband customers at the end of September, an increase of 8.2 million. However, China Mobile’s broadband business broke 100 million users in September, an increase of 25.8 million. If it can keep up the pace of growth it may surpass China Telecom’s broadband business sometime next year.

Due to ongoing network expansions and the increased cost of tower leasing, all three operators are experiencing increasing operating expenses compared with last year; China’s Telecom’s expenses increased by 9.8%, while Unicom’s increased by 3.2%.

China Unicom’s profitability increased significantly, aided by its 2I2C strategy and strategic cooperation with Internet companies; its partnerships have allowed the two sides to complement one another, with its online partners’ big data analysis capabilities and advantages in reaching online customers helping it to extend business coverage and access its target consumers.

Traditional core businesses for mobile operators, including SMS and voice calling, are all in decline. The number of talk minutes used fell by 7.1% in the first three quarters of 2017.

Improving performance

China Mobile’s revenue for the first three quarters was up 4.9% to 569.5 billion yuan. Profit attributable to shareholders was 92.1 billion yuan, an increase of 4.6% over the same period in 2016.

China Telecom’s revenue for the first three quarters was up 4.1% to 274.7 billion yuan. Profit attributable to shareholders was 18.5 billion yuan, an increase of 45.5% over the same period in 2016.

China Unicom’s revenue for the first three quarters fell by 1.4 billion yuan to 201.7 billion yuan. Profit attributable to shareholders was 4.05 billion yuan, an increase of 155.3% over the same period in 2016.

Overall, all three companies performed well thus far in 2017; Telecom grew by the largest amount, Mobile maintained its status as the largest service provider, and Unicom, though revenue receipts fell, vastly increased its profitability. China Unicom’s income from its mobile business increased by 6.7% to 117 billion yuan; analysts believe this growth and recovery is contingent on increasing its 2I2C, 2B2C, and other online sales initiatives while maintaining low-cost, low-subsidy user acquisition.

Unicom’s businesses “under attack from all sides”

Thus far, China Unicom and China Telecom’s 4G businesses have been living in the shadow of China Mobile’s. However, their latest reports show that the former two reached a total of 328 million 4G users, 34.5% of the market, in 2017. In 2016 they had a combined market share of 29%; in 2015 the corresponding figure was 10%. Thus, they are gradually eroding China Mobile’s lead.

China Telecom was formerly a strong second within the 4G market, but this past year China Unicom has nearly caught up on the backs of an increase of 55.73 million users (vs. Telecom’s 45.65 million). It now has a user base only 8 million larger than China Unicom, with 168 million users in all.

In addition, its broadband business is under assault by China Unicom, which at 100 million users has nearly caught up to Telecom’s 131 million users and may overtake it next year if its rapid growth continues. China Telecom’s advantages in both businesses are no longer obvious.

Strategies and Comments

China Mobile maintains an absolute lead in its mobile and 4G businesses. It has said that it will maintain its “four-wheel drive” integration strategy and work to develop the personal, family, commercial, and new services markets to maintain growth.

China Telecom believes that by promoting business transformation it will enhance its advantages in the future. It also intends to break through institutional barriers to productivity, and strengthen its initiative in the areas of implementation and management.

China Unicom stressed innovation and integrated development and plans to accelerate the recovery of its broadband business while accelerating the transformation of the internet to enhance productivity. It intends to embrace market-oriented reforms to improve efficiency and direct its efforts. It expected the fourth quarter to be challenging as it will abolish domestic roaming fees.

China smartphone market in Q3 2017; 4 out of 10 using Huawei or iPhone

Chinese urban consumers’ spending in fast moving consumer goods (FMCG) in the third quarter of 2017 grew by 3.6% from a year ago, indicating a clear recovery.

Kantar Worldpanel reports the Chinese urban consumers’ spending in fast moving consumer goods (FMCG) in Q3 2017 grew by 3.6% on 12-month basis, indicating a clear recovery for the industry.

Offline channel grew by 2.2%, which is slower than the total trade. However, modern trade (including hypermarkets, supermarkets, and convenience stores) did report higher growth at 2.9%, suggesting consumers are returning to brick and mortar stores as they create better shopping experiences through technology innovation.

Four key cities (Beijing, Shanghai, Guangzhou, and Chengdu) and provincial capitals grew slightly faster, up 3.7%. Across all regions, the West and South markets reported a more upbeat trend, up by 6.0% and 4.2% respectively.

Sales rebound in offline

Leading Grocery Share of Modern Trade – National Urban China (%)

Local retailers continued to outgrow their global counterparts during Q3. The Sun Art group lifted its share by 0.4 percentage point over the same period last year, driven by successfully growing the size of shopper’s baskets. Yonghui and BuBuGao kept growing by opening more new stores. Within the first half of 2017, Yonghui opened 64 stores and BuBuGao opened 22 stores. It largely helps to strengthen their position, and both of them gained 0.2 percentage point share during this quarter.

Amongst international retailers, Walmart and Carrefour started to see meaningful share recovery. Although they are still closing non-performing stores, they are proactively reformatting their existing stores to be more competitive and appealing to shoppers.

They are introducing new stores which are 30% to 50% smaller than the old ones to make their merchandises more accessible while reducing the sales area for durable goods. In June, Carrefour opened its first Easy Carrefour store in Wuxi and this is the first time the retailer introduced the smaller format store outside its home base in Shanghai. More recently it launched its own digital wallet “Carrefour Pay” together with Union Pay to facilitate more mobile payments in store.

Apart from that, in order to seek growth in the new retail era, most of the top 10 retailers adopted a more aggressive O2O (Offline and Online) strategy, by providing an integrated shopping experience with multi-channel offers.

For example, Yonghui works with JD.com’s platform to deliver its fresh produce and essential grocery items to consumers within one hour. They also introduced their own APP Yonghui Life in selected cities to expose to consumers directly.

More Chinese E-commerce players moving offline

Kantar Worldpanel reported a robust 24.3% growth in FMCG spend through E-commerce channel in this quarter. Now e-commerce accounts for 7.4% of FMCG spend in the latest 52 weeks ending September 8, which is 1.7 points higher than the same period last year.

China’s Online Retail Trends of Devices Sales in Q3 2017

This article was originally published on Kantar.com.

Last update: 15 Nov 2017

WeChat team released the WeChat Data Report 2017 showing 902 million average daily logged in users in September 2017, up 17% year-over-year and 38 billion messages sent on WeChat everyday.

Combined MAU of Weixin and WeChat were 980 million, an increase of 15.8% YoY according to Tencent’s financial results for Q3 2017. Check out Tencent Q3 performance here.

WeChat records 3.5 million monthly active Official Accounts in Q3 2017, up 14% YoY; and, 797 million monthly active users of WeChat Official Accounts, up 19% YoY.

Daily messages sent amounted to approximately 38 billion, representing year-on-year growth of 25%. Monthly active Official Accounts amounted to 3.5 million while monthly active followers of Official Accounts amounted to 797 million, representing year-on-year growth of 14% and 19% respectively.

Tencent rolled out WeChat Smart Transport, a solution which enables users to pay instantly for public transport fares by scanning QR codes, even without Internet access at the point of transaction. We will introduce more smart solutions for different verticals to better serve the social and eCommerce needs of our users and merchants.

INSIGHTS Chinese fashion KOL pivot from marketing to direct sales

Growth in Hong Kong retail sales remained positive in September 2017, up 1.5%year-on-year, according to the latest Mastercard SpendingPulse™ Hong Kong Report.

Sales recovered from the impact of typhoons in September and were boosted by the launch of new electronics products. Year-to-date sales growth is also positive for the first time since 2015.

Sales in the health and beauty sector saw the strongest growth, while jewelry, clothing and furniture sales continued to recover in September. At the same time, there was close to zero growth in the grocery sector.

“It is encouraging to see consistent spending growth in Hong Kong over the past five months. It shows better consumer confidence in Hong Kong and also reflects increased spending by Mainland Chinese tourists as their numbers rise,”

said Sarah Quinlan, Senior Vice President, Market Insights for Mastercard Advisors.

It will be important to see this spending growth continue as it comes after 21 months of contraction. The trend shows that the economy is on more stable footing with the consumer leading its return.

Analyzing local retail performance and spending, the macroeconomic report uses aggregated and anonymous transaction data, along with all other payment forms including cash, to offer insight into consumer spending trends, providing an early overview of market indices to help retailers, investors, card issuers, banks and government agencies in their decision-making processes.

China’s retail sales grew by over 10% to US$4 trillion in Q1-Q3 2017

Sogou, one of the top Chinese search engines, revenues reached US$257 million in Q3 2017, up 55% year-over-year and 22% quarter-over-quarter.

In Q3 2017, Sogou continued to expand market share in mobile search, propelled by robust traffic growth. Mobile search traffic grew by 38% year-over-year, driving a 24% increase in total search traffic.

Total revenue reached $257 million, an increase of 55% a year ago and 22% from the previous quarter, continuously outpacing industry growth.

Related: Baidu delivered solid financial results in the third quarter of 2017 with top line increasing 29% year over year

Sogou made new progress with its product collaboration with Tencent. Specifically, Tencent began testing the integration of Sogou Search into WeChat, which allows its users to access all internet information through Sogou’s general search function from within WeChat.

Sogou has also advanced its AI technology research and product applications. Its technologies in natural language processing continued to enable the transition from search into Q&A.

As Sogou has filed a registration statement on Form F-1 with the U.S. Securities and Exchange Committee relating to a proposed initial public offering.