Though it's hardly a secret that China has a massive web and mobile ecosystem, some of the numbers involved can still be pretty eye-popping.
Recently, Hong Kong's South China Morning Post and Chinese tech news site Abacus shared a 110-slide report -- one that has much in common with Mary Meeker's annual Internet Trends Report -- about the state of China's tech landscape. Here are a few notable takeaways from the document, which its creators decided to name the China Internet Report.
1. China Is Still Adding Internet and Mobile Payments Users at a Healthy Clip
The number of Chinese Internet and mobile Internet users grew by 57 million and 64 million in 2018, respectively, to 829 million and 817 million. Mobile payments users, nearly all of whom are using Alibaba-affiliated (BABA - Get Report) Alipay and/or Tencent's (TCEHY) WeChat Pay, grew by 56 million to 583 million.
With China's Internet penetration only at 60% at the end of 2018 -- for comparison, the U.S. had a penetration rate of 89% -- there's still ample room to grow.
China's Internet and mobile payments bases at a glance. Source: The South China Morning Post.
2. A Chinese Firm Is Africa's Biggest Phone Vendor -- and it's Not Huawei or Xiaomi
According to research firm IDC, Transsion, a Chinese OEM that sells low-cost phones under the Tecno, Infinix and Itel brands, had 34% of the African smartphone market in 2018 by units. Samsung, the market's #2 player, was estimated to have a 23% share; #3 Huawei was assigned a 10% share.
IDC also estimates Transsion had a 59% African feature phone share. No other player had more than a 10% share. Transsion filed for a Shanghai IPO earlier this year.
3. Tencent Remains China's Dominant Gaming Player
Though its gaming revenue was pressured in late 2018 and early 2019 by a temporary halt in game monetization approvals by Chinese regulators, Tencent still accounted for 52% of China's gaming revenue last year, according to research firm iResearch. NetEase (NTES - Get Report) , the market's #2 player, was estimated to account for 17%.
As the report notes, Tencent also has a giant portfolio of investments in Chinese and overseas gaming firms. Among other things, the company owns 84% of Clash of Clans developer Supercell, about 40% of Fortnite developer Epic Games and roughly 5% stakes in Activision Blizzard (ATVI - Get Report) and Ubisoft. It's also an investor in top Chinese game-streaming platforms Huya (HUYA) and Douyu.
Tencent's gaming dominance at a glance. Source: The South China Morning Post.
4. China's E-Commerce Growth Is Increasingly Driven By Smaller Cities
At its Sep. 2018 Investor Day, Alibaba disclosed that about 70% of the new registered users obtained by its giant Taobao marketplace from January to August came from "less developed areas" within China. Along similar lines, the report notes that of the estimated 202 million Chinese Internet users who haven't yet made an online purchase, only 74 million were in the country's giant "tier 1" and "tier 2" cities. E-commerce upstart Pinduoduo (PDD) , which gets only about 35% of its sales from tier 1 and tier 2 cities, has benefited considerably from growing e-commerce adoption in smaller Chinese cities.
Also noted in the report: As of Aug. 2018, Taobao was getting more traffic from its product recommendation feed than from searches. With Alibaba taking a cautious approach to monetizing Taobao's recommendation feed in the near-term, feed ads represent a sizable untapped revenue opportunity.
5. Smart Speakers Are Seeing Strong Growth Off a Relatively Small Base
Research firm Canalys estimates that China had only 22.5 million smart speaker owners at the end of 2018, a fraction of the estimated 60 million owners it believes were in the U.S.. However, the firm also estimates that China accounted for 51% of the market's global shipments in Q1.
Notably, Baidu (BIDU - Get Report) , whose core search advertising business has been having a rough time lately, has recently emerged as a top player in the Chinese smart speaker market. Canalys estimates Baidu, via its Xiaodu brand, shipped 3.3 million smart speakers in Q1; Alibaba and smartphone vendor Xiaomi were each estimated to have shipped 3.2 million.