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Segmenting China’s digital consumers

Marketing successfully to China’s soaring population of Internet users will require specific knowledge about how they employ applications and devices.

China could have as many as 750 million people online by 2015, up from 420 million today, McKinsey research estimates. Who are these Internet users? Which applications drive them online, and what makes them stay there? Which devices are they using, and how will that change over time? Marketers seeking to reach China’s swelling population need these details to make informed business decisions.

The McKinsey report Understanding China’s Digital Consumers attempts to fill the information gap. In 2010, we surveyed more than 5,000 of these consumers in upward of 20 Chinese cities. In addition to collecting basic demographic data, we asked the respondents questions that helped us assess two critical dimensions of their digital personas. The first was how much time consumers spend on digital devices (such as mobile phones and smart phones, PCs, TVs, and game consoles) and how they allocate their time among various applications (e-mail, instant messaging, games). The second dimension was how much money consumers spend on digital devices and applications.

Our research revealed seven consumer segments, with widely varying usage patterns and preferences for digital applications and devices (exhibit). The largest segment, the “traditionalists,” comprises a whopping 125 million consumers, who still spend a large portion of their media time on traditional forms such as television and are less likely to own, or want to own, other digital devices. They are less educated than the rest of the Internet users, and many live in smaller cities.

Even the smallest segment, the “digital junkies,” has 25 million of the planet’s most intensive Internet users. They spend more than 34 hours a week with digital media, compared with an average of 15.8 hours for all users. People in this segment are young and always on the lookout for the latest gadget; more than 25 percent of them live in one of China’s four biggest cities.

Whether it’s applications, digital devices, or e-commerce business models, no one size fits all in China. The substantial differences among the country’s digital consumers show that marketers must develop tailored offerings for them.

Download the full report (PDF) on the McKinsey & Company Web site.

Recommend (81)
  • 6 MAY 2011
    Rakesh Kumar
    Manager, Retail
    Gati Limited
    Hyderabad, India

    The landscape of Chinese Internet users is huge compared to any other developing country...

    .
    Rakesh Kumar
    Manager, Retail
    Gati Limited
    Hyderabad, India

    The landscape of Chinese Internet users is huge compared to any other developing country: at 750 million users, it showcases a bigger opportunity for e-commerce business. The report would certainly give useful insight to Internet businesses and information providers to develop and target the content and applications as per consumer-accessing requirements.

    .
  • 30 APRIL 2011
    Tawo Jay
    COO
    Jdark Global Resources
    Lagos, Nigeria

    ...The market is futuristic, expandable, and profit-oriented.

    .
    Tawo Jay
    COO
    Jdark Global Resources
    Lagos, Nigeria

    The consistent development of e-products and services to meet the demands of the digital junkies will see a considerable increase in the total percentage of Internet users in the nearest future. The market is futuristic, expandable, and profit-oriented.

    .
  • 28 APRIL 2011
    Michaelia Liu
    Researcher
    Synovate China
    Beijing, China

    ...Only with deep and accurate learning regarding consumers’ needs, usage behavior, and triggers...can makers really win consumer’ trust and preferences.

    .
    Michaelia Liu
    Researcher
    Synovate China
    Beijing, China

    Very interesting and valuable report to understand the landscape of Chinese digital users. Luckily, we just did similar research on Chinese consumers’ media preferences when choosing IT products. But our segement criteria is based on different age ranges, like college students, young workers, and mature workers. They have different purchase concerns and requirements due to finacial status, values, and personality, which combine social and personal reasons.

    Also interesting to learn that IT products have already become the affordable and entertainment-aided tools in consumers’ eyes, and even the status label in mature people’s perception. The thirst for and need to own high-quality, personalized, functional and eye-catching products increases day by day.

    Only with deep and accurate learning regarding consumers’ needs, usage behavior, and triggers when choosing a new-category IT product can makers really win consumer’ trust and preferences.

    .
  • 27 APRIL 2011
    Greg O'Rourke
    Trade Officer
    Trade and Investment Queensland
    Brisbane, Australia

    ...the key to a consumer-driven Internet market in China is regulated competition among...service providers to keep prices down and service quality up....

    .
    Greg O'Rourke
    Trade Officer
    Trade and Investment Queensland
    Brisbane, Australia

    The Internet is a useful tool and valued commodity in the communications industry. China has the unique opportunity to regulate consumer usage to protect young users from untoward content. The value of the Internet lies in fast business communication, student research techniques, brief social networking, and photo sharing. The China market for Internet and iPhone usage has a strong upside for telecommunications providers, and the key to a consumer-driven Internet market in China is regulated competition among these service providers to keep prices down and service quality up.

    .
  • 27 APRIL 2011
    James Chan
    President
    Asia Marketing and Management (AMM)
    Philadelphia, PA USA

    ...selling information products and getting paid in the China market is not the same as it is in America. We’ve spent 30 years doing it and we know it is not business as usual....

    .
    James Chan
    President
    Asia Marketing and Management (AMM)
    Philadelphia, PA USA

    This is a good article because it shows the categories of digital device users in China and it can give Western marketers insights on how to target their prospects. However, selling information products and getting paid in the China market is not the same as it is in America. We’ve spent 30 years doing it and we know it is not business as usual. You’ll need local help — and the right people on the ground. These people are hard to find and harder to keep.

    .
  • 27 APRIL 2011
    Rohit Tuli
    Consultant
    Infosys
    Chandigarh, India

    Very useful data for targeting products for people who are the manufacturers of almost everything the world uses today.

    .
    Rohit Tuli
    Consultant
    Infosys
    Chandigarh, India

    Very useful data for targeting products for people who are the manufacturers of almost everything the world uses today.

    .
  • 27 APRIL 2011
    Ralf Ritter
    Adjunct Professor, Marketing
    United International Business Schools
    Zug, Switzerland

    The relatively small percentage of “gamers” really surprised me....

    .
    Ralf Ritter
    Adjunct Professor, Marketing
    United International Business Schools
    Zug, Switzerland

    The relatively small percentage of “gamers” really surprised me. Everyone that I know in China and the people that they know (approximately 1,000 people in all corners of the country) spend a huge amount of time playing games (especially cards), chatting, dating, and downloading all sorts of music and movies. They may read the news superficially but don’t trust any except the weather reports —they are all very “active” users. Perhaps there is some overlap between gamers, mobile mavens, and digital junkies. I would be very curious about the ages and lifestyles of the mavens and the gamers, but I would guess mostly younger. Great report—wish there were lots of additional details about each group.

    .
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