E-commerce in China set for rapid and powerful growth
According to Alibaba group statistics e-commerce in China has grown rapidly this year. 34 million Chinese shopped online for the first time in the first half of the year, which also increases the total number of online shoppers to 142 million (according to the China Internet Network Information Center). That means one in ten Chinese people shop on the internet.
source: Chinese Internet Network Information Center
Thanks to the growing number of e-shoppers, the online retail sales are forecast to reach $65.9 billion (450 bn. Yuan) in 2010. The growth rate of retail sales turned out to be 117% a year between 2007 and 2009.
The boom of B2C-business and the increasing competition lead to a strategy-shift in online retailing. A recent CNNIC survey shows that online retailers want to focus on usability and transaction security in the future.
Case Study BMW and ‘Zaak’: How to make your Facebook-Fans really happy
Here’ s a brilliant example of how to leverage your digital potential in social media:
Zaak Fox, independent automotive professional from Trinidad and Tobago (!), was the first person to start a BMW-Fanpage on Facebook. After having reached more than 1.000.000 members, the BMW headquarters in Munich – who had turned the Zaak page into their official fanpage – congratulated Zaak on Monday by posting 3 simple pictures: „Thank“, „you,“ and „Zaak“ and calling him „1st of a million“. Since then – the number of fans is growing steadily.
Worldwide Ad Spending: Double-Digit Growth in 2010
While total media spending dropped, online ad spending increased 2009 by 2% to $55.2 billion. US Analysts eMarketer forecasts that 2010 will bring a return to double-digit online ad growth, with global spending set to reach $61.8 billion. Growth will continue at rates of over 10% each year through 2014. By 2014 eMarketer forecasts that figure will leap to $96.8 billion, growing at an 11.9% compound annual rate. No other media will match these growth rates:
Online Share of total Ad Spendings increases from 11,9% to 17,2%
eMarketer reports another interesting fact: The internet’s share of total ad spending worldwide will jump from 11.9% in 2009 to 17.2% in 2014. They say, that continued high growth in the online space coupled with a 2009 spending decrease of 10.5% for total media will help online get an ever-larger slice of the ad spending pie. Why? The reasons are clear: More measurable, more effective. And people are spending more and more time online.
Why AT&T eliminates its ‘all-you-can-eat’ pricemodel
AT&T, the No.2 wireless carrier in the U.S. and smartphone leader, has introduced new smartphone data plans and is now the first major mobile phone company to stop offering a single monthly price for unlimited Internet access — now new smartphone customers are charged based on how much they really use their mobiles to access data, videos or music [DataPlus: $15/mo. for 200 MB of data or $25/mo. for 2 GB]. Existing customers can switch to the new pricing or keep their current all-you-can-eat 30$-service.
Why is AT&T doing this?
According Silicon Alley Insider for a bunch of reasons: But big picture, because the amount of money that wireless subscribers spend on mobile voice calling is shrinking. Meanwhile, data consumption is increasing, but data revenue is barely increasing at the rate that voice revenue is decreasing. AT&T says 65% of its smartphone customers use less than 200 MB a month, and 98% (!) use less than 2 GBs of wireless data a month. So signing up will be cheaper for the bigger part of new subscribers and AT&T needs to generate growth in its wireless business. With the limited airwave spectrum available for wireless broadband, a Nielsen analyst adds, it’s just a matter of time before other providers — including Verizon, Sprint and T-Mobile— switch to usage-based pricing.
What you can do with 200 MB or 2 GB, AT&T shows it in this chart:
Source: AT&T usage example
New Procter&Gamble eStore as a ‘Living Learning Lab’
What works and what doesn’t in eCommerce:
The Procter & Gamble Company announced a new online shopping site is now available for U.S. consumers. Named the eStore, the online shopping site is owned and operated by PFSWeb and will feature the breadth of P&G brands including e.g. Tide®, Pampers®, Olay®, CoverGirl®, Swiffer® and Febreze®.
P&G says sales are not the only mission of the site. The world’s largest manufacturer of consumer packaged goods, which reported sales of $76.7 billion in 2009, hopes to gain insight into consumer behavior and how they shop [Here' s a video of Kirk Perry, P&G Vice President, North America, who tells more about it]: “The eStore’s main function is to act as a “living learning lab” for developing e-commerce innovation to win with shoppers.” Prior to the national launch, the eStore was tested on some 5,000 shoppers to help guide the design and development of the ‘ideal’ on-line shopping site.
Online retailing has been a high priority for P&G Chairman-CEO Bob McDonald since he took the company’s top job last year. P&G often launched new products through direct online sales, e.g. the multibrand TheEssentials.com online retail site. For this latest and biggest venture, P&G is adding some social elements such as product ratings, shopper feedback forums or links to its Facebook brand fan pages (e.g. The Tide Fanpage here).
So the question is: If this experiment works, should retailers worry? Since the eStore could ultimately mark a major shift in the way P&G markets its brands – and the manner in which consumers purchase them and retailers distribute them.
US Online Advertising Market rebounds from 2009 Recession
1. Highest Q1 Revenue Level ever for the Online Market:
Internet advertising revenues in the U.S. hit $5.9 billion for the first quarter of 2010, representing a 7.5% increase over the same period in 2009, according to the numbers released this week by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC). This marks the highest first-quarter revenue level ever for the industry.
Source: Interactive Advertising Bureau (IAB)
2. Facebook now leading Publisher of Display Ads
For the first time Facebook sells more display ads than any other web publisher and is catching up to rivals Yahoo Inc. and Microsoft Corp. in selling display ads, The Wall Street Journal’s Jessica Vascellaro reports. According to comScore, Facebook served up 176.3 billion ads to U.S. customers in Q1, accounting for 16.2% of the total market. Yahoo and Microsoft served 131.6 billion and 60.2 ads respectively. It’s important to note that these stats reflect Facebook’s dominance as a publisher only – not by revenue or profits; Yahoo and Microsoft serve ads on other sites through their ad networks. In fact, Microsoft serves up most of the ads that appear on Facebook.
According to the Wall Street Journal, ‘Facebook’s rise could help fuel an already rebounding online-advertising market, which shrank during the recession. Display ads have recently shown strong growth as budgets have returned and technology companies have developed new ways to measure the effectiveness of graphical ads.’
We choose to go to the moon – Flash is alive
For all who says that Flash is bound to die here’s a great example of a flashbased website from the JFK Presedential Library and Museum: Marking the 40th anniversary of moonlanding and President Kennedy’s grand vision that made the achievement possible the site ‘We choose the moon‘ is an interactive re-creation of the first mission to the moon.
The site went live at 9:32 a.m. on July 16th, 2009 – exactly 40 years to the minute after the historic launch. The site, powered by AOL, will recreate Apollo 11’s lunar mission, minute by minute, with an interactive experience that lets visitors experience the mission as it happened, using archival audio, video, photos and ‘real time’ transmissions. The visitors are able to track every step of the Apollo 11 mission, as it happened, 40 years later.
Case Study: Opentable Mobile Apps seat 3 Mio. Diners
Number of seated diners via mobile apps triples in eight months (+200%).
Some of the most useful set of apps on the iPhone are the restaurant apps that tell you what is to eat nearby. OpenTable, Inc. (NASDAQ: OPEN, since May 2009), a leading provider of free online reservations for diners and guest management systems for restaurants, announced that it has seated more than three million diners cumulatively through its mobile applications. Based on a $50 average check per diner, OpenTable estimates that diners seated through its mobile products have generated more than $150 million in cumulative revenue for its restaurant partners.
OpenTable allows diners on-the-go to view the real-time availability of restaurants in their vicinity and immediately book a free, confirmed reservation from the web or a smartphone, all without making a single phone call. OpenTable [by the way our website of the month July 2008] is especially great for reserving tables at high-end restaurants. If you are on a business trip, or wandering about town with some friends and want to make impromptu dinner plans, this app is a must-have.
Mobile is the fastest growing part of its business
Techcrunch puts that number in perspective to the overall revenues: OpenTable seated a total of 24.2 million diners in the past two quarters, roughly two million of which were via mobile apps, or about 8%. So, its mobile app is still contributing a relatively small part of the overall revenues, but it is growing faster than any other part of OpenTable’s business (here the earnings QI 2010).
OpenTable has more than 13,000 restaurant customers, and, since its inception in 1998, has seated more than 150 million diners around the world. Its revenue comes from monthly subscription fees charged to restaurants for access to the company’s service, as well as a $1 fee paid by restaurants for each seated guest derived from reservations made on OpenTable’s site. The company is headquartered in San Francisco, California, and the OpenTable service is available throughout the United States, as well as in Canada, Germany, Japan, Mexico, and the United Kingdom.
The “Big Four” – Social Networks in China
Have you ever tried Facebook in China? If you can do it, please do let me know. Facebook.com is actually blocked by government censors. No single social network will conquer the China market in the immediate future, least of all a foreign one.
However, there are few Social Networking sites in China and there is fierce competition among the top four: RenRen, Kaixin001, Qzone and 51.com. Most Chinese are members of multiple SNS, on average 2.8, according to the Chinese Internet Network Information Centre. In China, the social network scene is crowded and competitive, though clear separation exists between the top four and ‘the rest’ in terms of mass-market viability.
Accordding to the ranking from Alexa, and China Rank, the Chinese Internet Network Information Centre conducted 3007 telephone interviews on SNS across China in 2009, Qzone has 22% market share of social network users, RenRen has 17%, Kaixin001 has 12% and 51.com has 12%.
The competition is open and fierce between the top four networks in China. Especially RenRen is starting to push outward from university into both younger and older demographics since teens are became internet savvy and start abandon Qzone. Moreover, students move into the workplace, they should remain loyal to RenRen encroaching upon Kaixin001, 51.com that they are facing a diffculty to retain their users in lower tier cities. In the social network universe in China though fractured by different demographics for now, may gradually coalesce around RenRen.
Published in ‘Digital Beat’
Apple’s new money making machine? iAd
“We think most of the mobile advertising really sucks”. With these less than eloquent words Steve Jobs tells us what he thinks about current mobile advertising methods. During the launch of the new iPhone OS 4.0 operating software in early April he unveiled Apple’s new business idea: iAd. This feature will allow developers to integrate advertising into their apps in innovative ways. Jobs reckons that every iPhone and iPod Touch owner spends on average 30 minutes a day in apps. If during that time an advertising message is visible just every three minutes, it means that for the100 million devices already sold there will be one billion ads a day when iAd is launched in summer 2010 – an enormous potential.
Advertising in iPhone apps is nothing new. Until now though, clicking an advert would close the app and launch the browser to take you to the advertiser’s website (landing page). Understandably, this didn’t go down well with app users, so adverts were mostly ignored. Although the multi-tasking capability of OS 4.0 means that the app is no longer fully closed, Apple is aiming to create an entirely new level of advertising.
The interactivity of online advertising should be linked with the emotions of, let’s say, TV ads. To achieve this, developers can easily integrate advertising into their apps.
Source: Apple Keynote Speech, April 8, 2010
Steve Jobs demonstrates the possibilities of this feature using an Entertainment News app. As shown on the left-hand image, a banner ad for the movie “Toy Story 3″ is located at the bottom of the screen – nothing new so far. Now, if you click on the banner the app doesn’t close but opens in the space of the advertising partner – like an app within an app – where a variety of content can now be integrated: videos, games, info, etc. In addition, wallpapers, apps, etc. of the advertising partner can also be downloaded directly from within the advert – without having to leave the actual app. To get back to the original app, simply click on the close button “X”, and continue where you left off.
Apple sells and operates the advertising space and takes 40% in revenues. The rest goes to the developer. iAd will be launched as a feature of OS 4.0 for iPhone and iPod Touch this summer and for the iPad in autumn 2010. If it results in consumers no longer being annoyed by the adverts, and perhaps even viewing them as extra added value, Apple will have once again come up with a lucrative innovation.
