IM is the new email + China by numbers

Following the post by Kaiser Kuo on Ogilvy China Digital Watch, and the staggering figure of IM penetration by age, we took at dive into the CNNIC report (here) to bring a bit of perspective to those figures.

Selected data

• CNNIC did a very thorough work, sampling properly all regions.

• China has 210 million Internet users vs. 215 million in the US [p.11], with 40% of new users coming from rural areas | So China is world’s #2

• 163 million (78%) enjoy broadband | But broadband is apparently defined as anything above 1MB, far below Korea or Japan’s super-high speed with 50MB or 100MB offers as a standard.

• Penetration rate is a mere 16% and we are just at the beginning of the acceleration phase of the Innovation Diffusion Theory. It will accelerate soon, leaving US numbers far behind [p.12]

• 51% of netizens are below 25y.o., 80% below 35y.o. | This data is very important to understand WHY Chinese Internet users are more active on IM [p.18]

• 75% earn below 2,000 RMB (~300 USD) [p.22] | Many are students, migrants or in low-paying jobs.

• The Internet is diffusing to the groups with lower education background [p.19] (tertiary and above is 36%) | It is unclear how this reflects the large share of students: are users not educated or not yet educated?

• 34% surf only or also from Internet cafes [p.32] It goes up to 48% in rural areas [p.33]

• 1/4 also surf with laptops

• Non-netizens are limited by their education level, their income, their knowledge of computers, the lack of equipment and their available time. [p.39]

• Over 80% think Internet help their social life [p.41]

• 56% use email while 81% use IM

• First thing you do when connecting: IM is 40% while email is 3.5% and search engine is 7% | IM is more synonymous to Internet than anything else… [p.44]

• 42% do not believe in online news (or 58% do believe, depending on the way you look at it) [p.82]. 60% do not believe blogs and forums either.

• Tons play Internet games [p.55]

• Many had virus (90%) or account information stolen (45%) [p.77]

• 56% are willing to pay for downloading content if the price is acceptable [p.80]

Some comments from +8*

• We believe the fact that IM is so prevalent is related to two things: (1) Internet in China more or less started with IM rather than email for many users (2) Most Internet users are young and quite new to the media. If we compared the usage of email and IM among the below 25 in, say, China, US and France, the patterns should actually be quite similar.

• Internet in China is highly social. Though many use it for information, the fact that most go straight to IM upon login tells a lot about what they use Internet for. Given the one-child policy, the families spread around the country for work or study, and the fact that Internet is among the cheapest entertainment/communication tools available in China (2~3 RMB/hour or 0.3 USD/hour in Internet cafes), this is hardly surprising.

• User are willing to pay! Just they have no way to do it easily or at acceptable prices. Remember many thought it was impossible to have people pay for music online, then iTunes came

• Internet user are not too rich (75% below 2,000 RMB/month). Well, this is also normal, but this means also that 25%, or over 50 million, earn over 2,000 RMB / month. QQ works better with low income netizens. Maybe foreign players should focus on this higher income segment?

• Most netizens are still to come: half from city, half from countryside. By the end of 2008, we could reach circa 300 million Internet users in China. As crazy as it may sound, a website like www.hao123 may end up with more users than large portals as they cater to this low-income Internet newbies. More, if a site serves 800 million non-netizens, this is what we call a “dog” vs. the Web 2.0 “demons” (for reference: Dogs and Demons).