China Mobile Internet Industry & Consumer Habits: A Must-Read Guide for Market Entry

China's mobile Internet traffic and user stickiness The growth rate of traffic continues to slow down, and China mobile Internet has entered a deep stock era. User stickiness has experienced a certain degree of decline and is currently stabilizing .

From the perspective of overall traffic, as of the end of 2023, the month-on-month growth rate of the number of independent mobile Internet devices in China has shown a continuous downward trend. Among them, the month-on-month growth rate in December 2023 was only 0.04%. The traffic growth has approached the ceiling, the incremental space is limited, and the competition for existing traffic has intensified.

From the perspective of user stickiness, the daily usage time and frequency of mobile Internet users experienced a significant decline at the end of 2022 and are currently stabilizing.

In December 2023, among the 23 first-level industries, the year-on-year growth rate of traffic in four first-level industries, namely life services, community social networking, car services, and food delivery, exceeded double digits , and the traffic growth was relatively obvious.

In addition, the traffic growth of the travel and photography industries also exceeded 5%. The short video industry continues to squeeze out the time spent by Chinese mobile Internet users in other industries, further strengthening its effect in attracting netizens' attention.

Chinese Mobile Internet Consumer Preferences

Female users prefer parent-child and photography and beautification categories, while male users prefer car service categories. Internet users of different genders show obvious differences in the emphasis they place on using APPs. Female users prefer menstrual management, parent-child parenting, and children's education APPs in the secondary industries related to female parent-child relationships. Camera and photo album APPs related to photography and beautification are also more popular among female users. Among the top 10 types of APPs preferred by male users, 4 are in the secondary industries related to car services.

The types of apps preferred by users in high-tier cities cover many aspects of daily life, while users in low-tier cities have a clear preference for entertainment-related, educational, and practical tool apps.

Young and middle-aged users have a clear preference for parent-child, game and recruitment-related apps, while mature user groups prefer financial management, smart wearable and practical tool apps.

China E-commerce

Industry dynamics in 2023 With changes in the industry structure and intensified competition between new and old players, price has become an important means for e-commerce platforms to compete for market share. In 2023, the overall traffic of the e-commerce industry remained stable, with an average month-on-month growth rate of 0.1% from January to December, and a year-on-year increase of 0.6% in traffic compared with the average in 2022. The 618 and Double 11 e-commerce promotions still have a great impact on the industry's traffic, with traffic reaching 118,919,500 and 119,086,800 in June and November respectively, but the monthly traffic of the industry during the promotion period was slightly lower than the same period last year. The competition for traffic among the top platforms has intensified, and the user overlap of the three APPs is relatively high.

Compared with Taobao and JD.com, the fluctuation of Pinduoduo APP traffic in 2023 is smaller, and the core user group is relatively stable. The traffic of Taobao and JD.com APPs increased significantly with the 618 and Double Eleven promotions, and showed a certain degree of decline after the promotions. In terms of the number of overlapping APP users, Taobao and Pinduoduo have a large number of overlapping devices, which is nearly 280 million.

China Local Life Comprehensive Services

The two giants are competing fiercely and jointly promoting the diversified development of the local life market. In 2023, Douyin will continue to focus on local life business, driving steady business expansion through strategies such as increasing the number of merchants and categories in covered cities, strengthening user experience and content quality, and improving merchant service capabilities and entry barriers.

Facing the challenge from Douyin, Meituan responded promptly and added a "special group purchase" function to its APP in March, bringing more affordable and high-quality choices to consumers, and launched its first food delivery live broadcast. The two jointly shaped the diversified market structure in the competition and promoted the development of the local life service industry.

Meituan's traffic has been growing steadily throughout 2023, with a 23.5% increase in December traffic compared to January. In terms of user stickiness, in April, after Meituan launched its first live broadcast, the average daily usage time of APP users increased significantly, with a month-on-month growth rate of 4.1%. From April to August, APP traffic remained high with only slight fluctuations.

Meituan APP user portrait continues to penetrate multiple markets and expand user territory. Meituan APP's share of mature age groups, new first-tier and low-tier cities in 2023 has increased compared to the end of 2022. Meituan APP's share of users in all age groups aged 36 and above has increased. From the perspective of city-level distribution, the proportion of active users in new first-tier cities increased by 1.4%, and the proportion of fifth-tier cities increased by 1.5%. The age group of APP users has broadened, and at the same time, the user base has been successfully expanded in the new first-tier and sinking markets, and the service has penetrated into more regions.

Fresh Food E-commerce in China

Industry dynamics in 2023: The price war between Freshippo ( a supermarket chain under Alibaba) and Sam's Club has escalated. Hema's competitive plan has successfully attracted some consumers who pursue quality of life, forming a certain degree of misaligned competition with Sam's Club. The differentiated operating strategies of the two reflect the diversity and competitive situation of the industry market. The user overlap has increased, but their respective loyal user groups remain basically stable, showing consumers' diverse needs for different service models and value propositions. Married high-tier city users aged 35 and below are the main user group. Among the TOP3 APPs, Dingdong Maicai and Duodian's traffic fluctuations show an opposite trend overall, and the competitive relationship is more obvious. Freshippo's user group is stable and the traffic fluctuation is small.

China Car Service

According to data from the China Internet Network Information Center (CNNIC), as of mid-2023, the number of online ride-hailing users in China reached 472 million, an increase of 34.92 million from December 2022, accounting for 43.8% of the total Internet users.

As the overall online car-hailing market picks up, the competition for online car-hailing users between DiDi and navigation map platforms represented by Amap will become more intense in 2023. Against the backdrop of growing market traffic, DiDi and Amap continue to attract and consolidate their respective user groups by continuously optimizing services, expanding business areas, and promoting various preferential activities, striving to consolidate and expand their market share.

2023 , the traffic of China's mobile Internet car service industry continued to grow, mainly due to the increase in people's travel needs after the impact of the epidemic subsided and the increased market promotion efforts of major platforms. In September, the industry traffic reached its annual peak. After entering the fourth quarter, the industry traffic fell slightly month-on-month, which may be related to seasonal factors, changes in market demand and intensified market competition, but the traffic in October, November and December still increased by 25.4%, 36.0% and 37.8% year-on-year in 2022. Users under the age of 30 account for nearly 40%, and new first-tier cities are an important source of traffic. Compared with the same period last year, Guangdong Province performed outstandingly in the growth of active users, with a net increase of 5.09 million users, ranking first in the country.

Chinese Film Performances

In 2023, the movie and performance ticketing market continued to be hot, and the scale of active users of the two major ticketing apps represented by Tao Piaopiao and Damai increased significantly. By December, the year-on-year traffic growth of both exceeded three digits, showing consumers' extremely high enthusiasm and strong demand for related entertainment consumption. Comparing the user portraits of the two typical apps, the user groups of the two showed a high degree of commonality: the proportion of female users was higher than that of male users, and the TGI was greater than 100. The proportion of users aged 30 and under was close to 40%, and the younger the age, the higher the proportion, and the more obvious the usage preference. Young female groups play a pivotal role in the movie and performance ticketing market and constitute an important part of consumption.

China Automotive Service

Industry Overview in 2023 Domestic automobile production and sales hit a record high, the prosperity of the automobile consumer market has stimulated strong growth in related demand, and the traffic of the automobile service industry has increased significantly . In 2023, the domestic automobile market ushered in a historic breakthrough in production and sales, among which new energy vehicles performed particularly well, and the penetration rate successfully broke through the important threshold of 30%. The rapid development of the automobile industry has driven the strong growth of demand in related service fields. The traffic of the automobile service industry has maintained positive year-on-year growth for 12 consecutive months, of which 7 months have grown by more than double digits, and the average annual growth rate has reached 8.6%. The prosperity of the automobile market has injected new vitality into the automobile service industry.

China Online Travel

Industry Overview and User Portraits Traffic has exploded throughout the year, with young users in mid- to high-tier cities being the main source of traffic. From January to December 2023, the number of monthly independent devices in the online travel industry increased by double digits year-on-year, with a year-on-year growth rate of 74.6% in April, reaching the peak of the year. Traffic growth is correlated with holidays and winter and summer vacations, and the peak of APP traffic growth often occurs before the holidays, reflecting the user's pre-emptive planning of travel activities. From the perspective of user attributes, users aged 18-24 account for the highest proportion, and new first-tier, second- and third-tier user groups are the main contributors to industry traffic.

Online Recruitment in China

The TOP3 apps contribute nearly 80% of the traffic. In 2023, the strong job-seeking and recruitment demand caused by the steady recovery of the macro-economy and the adjustment of the industrial structure has boosted the substantial growth and high-level operation of the APP traffic in the online recruitment industry. The newly added active user groups are concentrated in men, over 40 years old, married, and fourth-tier and below cities. Compared with the same period in 2022, the mobile traffic of the online recruitment industry in December 2023 increased significantly by 46.7% year-on-year. The main source of traffic growth was male, married, and mature age group users in sinking areas. Specifically, the monthly number of independent devices for male and female users increased by more than 40% year-on-year, among which the traffic growth of male users was more significant . The traffic growth of the married group exceeded 50%. The proportion of users over 40 years old increased by 3.2%. The proportion of users in second-tier cities decreased the most, and the proportion of traffic in fourth- and fifth-tier cities increased.

China Online Video

In 2023, the industry's high-quality dramas increased the traffic of online video platforms and promoted the platform's reputation and revenue. In 2023, high-quality dramas had a significant impact on the traffic and reputation of online video platforms, significantly increasing the DAU and MAU of online video platforms, and promoting the growth of paid conversions and ARPU. At the same time, the broadcast of these high-quality dramas also effectively improved the reputation of the platform, attracted new users, activated old users, and promoted social interaction and user retention. Advertisers are also more inclined to place advertisements on these high-traffic, high-reputation dramas. Online video platforms have further improved their competitiveness and revenue.

From January to December 2023, the average number of independent devices in the online video industry reached 942 million, a slight decrease of 1.8% year-on-year in 2022, and the average month-on-month growth rate was 0.5%. The industry traffic has stabilized as a whole, and the mobile penetration rate of the industry reached 68.4% in December. In terms of usage time, the average daily usage time of users in 2023 was 79.1 minutes, and the average month-on-month growth rate was 0.4%. During the broadcast of the phenomenal hit drama in February, the usage time of industry users reached the peak of the whole year.

Chinese Game Services

The average number of independent devices in the gaming service industry in 2023 will reach 725 million, and the growth of industry traffic is correlated with the holidays such as summer and winter vacations, Spring Festival, Labor Day, and National Day. During the winter vacation and Spring Festival holiday in January and February, the traffic and growth rate of the gaming service industry reached the highest value of the year.

China Audio

In 2023, the number of independent devices in the audio industry will fluctuate around 90 million per month, and the overall traffic will be stable. The daily effective usage time of users increased from 57.0 minutes at the beginning of the year to 60.4 minutes, and then gradually fell back, maintaining an average of about 57 minutes throughout the year, which reflects the steady trend of user activity and stickiness.

The users of the audio and video industry are mainly young and middle-aged people, among which male users are slightly more than female users, and married users account for a large proportion, reaching 65.2%. In terms of age distribution, they are mainly concentrated in the 18 to 35 age range. Geographically, the industry has a wider audience in the new first-tier, second-tier and third-tier cities, accounting for 20.8%, 18.8% and 21.4% respectively. Overall, the mobile user group of audio and video covers all age groups and city levels, and is especially favored by adult listeners with a certain degree of life stability and consumption power.