Six stats of the week and what they mean for marketers in the Asia Pacific

Stats of the week_Goldman Sachs_China 7 dollars_Feature image

What does US$7 have to do with ecommerce in China? Quite a lot. It’s one of six stats we’ve selected from around APAC this week.

We will get to China in a bit. Kicking off stats this week is a global statistic from the Location Based Marketing Association’s Global Location Trends Report:

77%: The percentage of brands that think location-based data is valuable

The LBMA surveyed more than 50 global brands in Singapore, Germany, Canada, the United States and the UK. It found that while three-quarters of global brands think location-based data is valuable, only 65% think it is accurate.

Brands still intend to increase spending in location-based marketing strategies (up by 3.3%). However location-based advertising isn’t going to take off until data can be standardized and verified so it’s usable.

Currently, the use of location-based technology is focused on targeting consumers with offers to drive sales, but 66% of global marketers plan to use the technology in non-marketing areas of operations, customer services or public safety, according to the report.

Social location services are a top priority for marketers – 48% are interested in using social apps and location technologies to drive customers in store. Investments in beacon, NFC, GPS, and Wi-Fi are also set to grow by double digits.

Earlier this year, we reported LBA would be a key trend in the Indonesian market in particular. As Safitri Sri points out, successful campaigns need to be relevant, and that depends largely on improvements in data analytics for optimized targeting.

241 million: Facebook users in SE Asia

This week, Facebook reported it has 241 million users across Southeast Asia. Of that, 94% of them are accessing Facebook via a mobile phone.

This should not come as a surprise. Facebook is aggressively chasing its next one billion users, and it is looking to the emerging markets of Asia to do this. Last year it launched Facebook Lite for Android and Slideshow for video aimed squarely at mobile users in regions with limited connectivity and bandwidth.

Indonesia is one of Facebook’s key markets in the region. eMarketer estimates there will be 78 million Facebook users in Indonesia this year – that will grow to 105 million by 2019.

Instagram is also experiencing strong growth across the region. Facebook announced it has 22 million Instagram users in Indonesia alone.

The social networking giant says the number of active advertisers on Facebook grew 50% over the last year (to three million). Much of that growth is being driven by advertisers in Southeast Asia looking at new channels to reach the region’s mobile first consumers, it said in a statement.

Stats of the week_Facebook_SEA_600

90 million: Twitter users in Asia Pacific in 2016

Twitter turns 10 next week. It’s had its fair share of woes this year but like Facebook, it is looking at the emerging markets of Asia as part of its growth strategy. eMarketer predicts there will be 89.5 million Twitter users across Asia Pacific this year.

That’s a significant lead over its second biggest market – North America – with 65 million users. By 2019 Asia Pacific will make up almost one third of global Twitter users with 115 million users. eMarketer points out that these APAC numbers exclude mainland China, where the platform is blocked.

Stats of the week_eMarketer_Twitter_Users_and_Growth_Worldwide_by_Region_2014-2019_194152 (1)

Here’s another graph from eMarketer with the APAC country breakdowns. Japan, India and Indonesia dominate Twitter use around the region and will continue to do so over the next five years.

Stats of the week_eMarketer_Twitter_Users_and_Penetration_in_Asia-Pacific_by_Country_2014-2019_194166

76%: The number of business leaders in APAC who see business models changing significantly over the next five years

All this disruption is causing havoc for business leader across the region. According to Nielsen’s Asia 2020 – Progressing, Prepared or Pessimistic report, more than three quarters of business leaders in APAC expect their business models to change over the next five years. And they are worried: 59% say it will be difficult, or extremely difficult, to navigate their organizations over this period.

The report also found that less than half (48%) believe their organizations are ready for the future, and just 43% are confident they have systems and processes in place to identify early indicators of change.

“The pace of change is accelerating, and nowhere is that pace more exponential than in Asia Pacific,” says Regan Leggett, executive director, thought leadership and foresight, Southeast Asia, North Asia and Pacific, Nielsen.

“The complexity of change today means it’s becoming harder and harder for companies to anticipate and prepare.”

Online and ecommerce are seen as the most significant factors influencing the changing retail environment.

Stats of the week_Neilsen_Business leaders APAC_600

Leggett says ecommerce is now the largest retail channel in Korea, while online retail sales are growing at 50% a year in Indonesia.

“The rate of growth forecast for ecommerce in Asia Pacific signals a fundamental step change in the way organizations will operate in the future,” says Leggett.

“The diversity of the ASEAN community represents both opportunity and challenge. The companies who get ahead of the curve and build out their knowledge of market and consumer trends will be best placed to tap into nascent demand. Conversely, companies that are unable to adapt are likely to be left behind.”

And now, finally, we get to China, at the center of global ecommerce.

US$7: The average daily spend in China

Earlier this week we reported on how the economic slowdown in China could be a catalyst for the country’s ongoing ecommerce boom as consumers look for smarter ways to spend their money.

It will also be boosted by a growing middle class.

The average daily spend of Chinese consumers today is US$7 (compared to US$97 in the United States), according to Goldman Sachs’ The Rise of China’s New Consumer Class report. This is largely weighted by the lowest working tier in China – the 387 million rural workers earning US$2,000 a year, who make up almost half of China’s 770 million work force, and whose spending priorities are on food and housing.

At the top end are the 1.4 million Chinese earning US$500,000 a year who make up a large part of global demand for high-end goods.

It’s the growth of the two groups in the middle – the 146 million people making up the urban middle class (with annual incomes of US$11,733) and the 236 million people who constitute the urban mass (US$ 5,858/ year) that will shape consumer spending in China going forward.

“This group – blue-collar workers and migrant workers who have moved to cities to find better-paying jobs – is expected to see the biggest rise in income. This will allow them to broaden their spending beyond consumer staples,” the report says.

Here’s how expenditure patterns will change as Chinese incomes rise.

Stats of the week_Goldman Sachs_expenditure China v US_600

China is already the world’s biggest ecommerce market – and it’s expected to be worth US$1.1 trillion by 2020.

“The Chinese consumer market has seen enormous growth – and only 11% of the population has reached the middle class. As their ranks swell, so will their effect on the global economy,” says the Goldman Sachs report.

It says the opportunities lie in entertainment, food service, technology and other industries.

“To take advantage of them, businesses will need to understand China’s urban mass and urban middle, and align pricing, offerings and other practices to the groups’ specific needs,” the report concludes.

30%: This year’s increase in digital ad spend in China

Advertisers know where Chinese consumers are going to be this year – and that’s increasingly online. eMarketer is predicting digital ad spend will reach $40.42 billion in 2016, a 30% increase on last year’s spend. It expects this number to more than double by 2020, when it will reach $83.59 billion.

Stats of the week_eMarketer_digital ad spend China (small)

eMarketer highlights the significant move from traditional to digital media, reflected in declining spend on TV and print. In 2016, TV spend will account for 24.2% of total media ad spending, ($18.92 billion) – less than half of digital’s share. Meanwhile, mobile video is seen as the big mover, taking 55% of digital video spend this year.

Collectively, Baidu, Alibaba and Tencent will take 72.8% of China’s mobile Internet ad market in 2016.

*Featured image courtesy Goldman Sachs

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