Cheetah Global Think Tank: China App Market Report for Q3 2018

I watched the popular TV series "Startup Era" a few days ago. Given the nature of Chinese workplace dramas, I didn't have much expectation. But after watching it for 20 minutes, I was even more disappointed. Apart from the love triangle between Huang Xuan, AB Dabaobei, Zhou Yiwei, and Song Yi, plus a sex scene, entrepreneurship, well... doesn't exist. If I continue to watch it, I guess the screenwriter has never worked in the workplace, let alone entrepreneurship. If you really want to watch "Startup Era", you might as well focus on the China App Report released by Cheetah Global Think Tank every quarter. The ups and downs here are guaranteed to be more exciting than the TV series.

September marks the second anniversary of the appearance of shared bikes in our lives. This industry, which obtains a large amount of offline traffic, was once considered a representative path for future mobile Internet entrepreneurship. However, two years later, shared bike companies have either sold themselves to become one of the offline scenarios of giants, or closed down or struggled to survive. Coupled with the silence of unmanned shelves and shared power banks, offline traffic seems to have become a false proposition; the takeaway coffee track developed this year seems to be another successful case of online customer acquisition feeding back to offline retail.

Pinduoduo's listing has once again sparked a discussion on consumption downgrade. It was once believed that consumption downgrade only existed in small towns and villages below the third and fourth tiers, but Pinduoduo's user portrait tells us that users in first-tier cities are also becoming more and more keen on bargains; in the context of a cooling of real estate transactions, various house-hunting platforms have little impact, and more people who buy houses have turned to renting.

Looking at the entire market, although nearly half of the people install less than one new app a month, 22% of people install more than five new apps a month, and more people spend their time online at night. The online traffic market may not be as pessimistic as it was a year ago, you just haven't found the right track.

1. Playing with mobile phones until late at night? App stock market extends to the evening

The average daily mobile Internet usage time is 5.1 hours. Internet users start to wake up at 6 a.m. every day. The peak hours for mobile Internet use are during lunch time and from 18:00 to 21:00 p.m., but about 9% of Internet users still browse their phones from 1:00 a.m. to 4:00 a.m. In addition, about 8% of WeChat users have used WeChat from 11:00 p.m. to 5:00 a.m.

Looking at the national average, the average mobile phone user spends 43.1 minutes a day on communication and socializing, 26.9 minutes on reading the news, and 18.2 and 6.5 minutes on watching short videos and videos respectively. The time spent watching short videos has far exceeded the time spent watching long videos.

Looking at the user stickiness of each sub-industry, users of news apps spend 74.1 minutes per day reading news, which is the only category that spends more than 1 hour.

2. Is there not much room for new markets? You just haven’t found the right group of people. Short videos, social e-commerce and news are still hot spots

Among the existing apps on the market, tools, education, and entertainment are at the forefront, and publishers are very enthusiastic about developing apps in these categories.

From the perspective of industry competition, there are many existing apps in industries such as sports, entertainment, and business, but there are relatively few active users, and the industry is in a fully competitive situation; but on the other hand, it is also possible that in these industries, user needs are more diverse, and a user may install several apps with different functions.

In the third quarter of 2018, the average Chinese mobile Internet user installed only 2.3 new apps per month, and nearly half of them did not install any new apps. However, 22.23% of people are more willing to try new things and install 5 or more apps per month. So from the perspective of the entire market, there may not be much room for growth, but if we can find those 22%, it may be an opportunity.

Among the newly installed apps by users, in addition to the essential tools, video, shopping, and news apps are areas that users are more willing to "try out". This also corresponds to several hot spots in the current mobile Internet: short videos, new retail, social e-commerce, and the sinking of news content.

3. Men are more responsible for travel, while women are still the main force in family education

Judging from the gender ratio of apps in various industries, the division of labor of men in charge of "outside" and women in charge of "inside" is still the mainstream of families in today's Chinese society. Among the industry apps with the largest proportion of men, the proportion of men using cars, travel and local travel ranked second and third; and among the category apps with the largest proportion of women, education and early childhood education ranked second and third. It seems that men still dominate travel and driving, while mothers still bear the heavy responsibility for children's family education, and most mothers are between 31 and 40 years old.

In the comics category with the largest proportion of women, young women aged 18 to 24 are the main users of comics apps.

4. You are in your own world, and your parents only care about whether you dress according to the weather.

From the classification of apps preferred by different age groups, we can see that mobile users aged 18-24 are more inclined to use their mobile phones for entertainment, such as reading comics, listening to music, and watching videos; people over 40 are more inclined to use their mobile phones to check the weather, read news, and read. The younger the user, the more they focus on their own pleasure, while middle-aged and elderly users are more concerned about the living environment and the outside world.

5. A lot of pressure! The middle-aged crisis of taking care of the elderly, children, and one’s own health

Among the most preferred app categories for users aged 31-40, early childhood education ranks first, and medical and health categories also rank at the forefront. Users in this age group play the role of the backbone of the family, having to raise and care for the next generation, as well as pay attention to the health of their parents and themselves. This pressure can also be seen from their app usage habits.

1. Story of Yanxi Palace drives iQiyi, short videos are competing with video websites for students’ summer vacation time

Thanks to the hit drama Story of Yanxi Palace, iQiyi’s weekly active users were once on par with Tencent Video during the summer vacation, but the increase was not obvious, and after the finale, coupled with the end of summer vacation, the downward trend was obvious; and the launch of Ruyi’s Royal Love in the Palace did not bring much traffic to Tencent Video. It can be said that the driving effect of a single star drama on video websites has become smaller and smaller. Video websites can only maintain their popularity by continuously producing excellent dramas and variety shows. On the contrary, during the summer vacation, due to advertising on major TV variety shows and the increasing user awareness, Douyin’s upward momentum was obvious. Short videos are competing with video websites for students’ summer vacation time, and the results are remarkable.

The "Tencent-Tencent War" between Tencent and Toutiao has caused a lot of controversy. On the surface, Tencent blocked the sharing channels of Douyin, but Toutiao seems to be the biggest beneficiary. Douyin's user base continues to expand. Even with the promotion implanted in WeChat, Weishi, which Tencent regards as a weapon against Douyin, has not been "helped up". In addition, an app similar to "Qutoutiao" has appeared in the video field, which rewards users for watching videos and has become the dark horse of this issue.

2. Starting a business is not easy. The "hot-selling" bullet message is as brilliant but short-lived as fireworks.

In the third quarter, an app called “Bullet Messenger” that appeared to challenge WeChat “exploded” in its imaginary enemy WeChat Moments and became the first hit of the mobile Internet in 2018. Unfortunately, the popularity of “Bullet Messenger” in the news only lasted for two weeks, after which its active users declined rapidly. Even at its peak, the weekly active penetration rate of 0.03% was less than that of QQ Light Chat, which ranked 10th in the communication and social category. In early October, it was even delisted. Starting a business is difficult. Even if there is a celebrity endorsement from Luo Yonghao, if the product does not have some solid skills, it can only be as brilliant and short-lived as fireworks. The pattern of the communication and social industry has not changed so far, and it is difficult to find challengers.

3. Consumption downgrade does exist, and first-tier cities cannot avoid it

On July 26, Pinduoduo went public in the United States with great fanfare. Its success has thrown a bomb into the tranquil waters of e-commerce. As Pinduoduo has created the concept of "social e-commerce" behind its rapidly expanding user base, various platforms packaged as "social e-commerce" have emerged like a tide. Beidian and Yunji, which are on the list this time, are both of this kind. Social e-commerce is another term and trend that will be overused.

Pinduoduo is no longer the "small town bedding wool weapon" imagined by people. The vast majority of first- and second-tier cities have already "fallen". Cheetah big data shows that among Pinduoduo's users, first- and second-tier cities account for nearly half, and the proportion of users in first-tier cities is rising.

After the craze of unmanned convenience stores and shelves, driven by coffee takeaway products, new retail has returned to the model of online feeding offline. Luckin Coffee quickly acquires users through online marketing fission and drives the establishment of offline stores. This "heavy asset + heavy Internet" virtuous cycle model may give new inspiration to Internet practitioners.

4. Traffic, content, and content production sinking

Pinduoduo's consumption downgrade has successfully made people realize the benefits of Internet traffic sinking. People working in the Internet in Beijing, Shanghai, Guangzhou and Shenzhen finally realized that it was time to move from cities to rural areas. So Qutoutiao was born, and its content positioning made Toutiao become high-end. In just over a year, Qutoutiao surpassed many traditional portals and stood in the fourth place in the news app category.

As news apps push content down to the lower levels, upstream content production also begins to go down. At the end of August, an article on the public account Hedgehog Commune titled "A Field Visit to Shandong New Media Village, a Farmer's Self-media Income Exceeds 10,000 Yuan" upset the minds of writers working in various media, most of whom had studied hard for four years in journalism schools and Chinese departments. These titles, such as "A daughter was born in the family, and the grandfather came from afar to congratulate, and the gift he gave was admirable", "A courtyard house in the countryside cost 200,000 yuan, spacious and bright, better than a building", and the main text without even the time and place, all declare that this is no longer an era of complying with 5W (traditional news writing requires news to have five elements: time, place, person, event, and cause, 5W is its English abbreviation). Content production no longer belongs to centralized authoritative media, and it no longer belongs to the "elite".

5. Shared bikes: From king to bronze

The story of shared bikes can be classified as "I thought I was a king, but I turned out to be a bronze" series. It has been two years since Mobike was launched in Shanghai and Beijing in September 2016. Shared bike companies used to be the darlings of capital and appeared as potential unicorns, but now, shared bike companies are either closed down or bankrupt, or they are entrusted to others, and the remaining few are still struggling. After the second half of the Internet began, the offline traffic represented by shared bikes was accompanied by a heavy asset model. Entrepreneurs seem to have not figured out how to play the heavy assets of the Internet. After investing heavily, where is the "pig"?

6. No one can shake Didi except itself

The incident in July can be said to have completely hurt Didi, but judging from the overall market share, no competitor can shake Didi's position in the next one or two years, not even Cao Cao, which has risen rapidly, nor Meituan, which has directly challenged Didi. The only one who can shake Didi is itself. As Cheng Wei and Liu Qing said in their apology letter, Didi's "running all the way" has left other competitors behind, but it has also made Didi lose its "sense of awe". Keeping "awe" for users and the market is the cornerstone of a company's longevity.

7. Local life services enter the era of duopoly

Ele.me merged with Baidu Waimai, and Meituan went public in the United States. China's local life services have entered the era of duopoly. But Meituan seems to have a better chance of winning. In August this year, due to the sharp drop in the weekly active penetration rate of Ele.me + Baidu Waimai, Meituan overtook and became the number one food delivery app. In October, Baidu Waimai was renamed Ele.me Star Selection. I wonder if it can reverse the decline and steadily recover.

8. Real estate developers are shouting "survive", but the impact on house-hunting platforms is limited?

The former real estate giant Vanke shouted "survive" at its internal meeting, adding a touch of sadness to the current Chinese real estate market. The "cooling" of the real estate market has become a consensus in the market. However, the popularity of house-hunting platforms does not seem to have fallen with the decline of the real estate market. Anjuke and the newly emerged Beike have both seen an increase in popularity due to heavy investment in promotion, while Fangtianxia and Lianjia have maintained a stable trend. Perhaps many home buyers have turned to renting. No matter what form it takes, "housing" will be a rigid demand of the people, but more and more people have "reduced their dimensions" from buying a house to renting a house.

9. Games: Half a Year of Being Locked by the Throat of Fate

The approval of game licenses has been suspended for seven months, and the long wait is consuming the vitality of the game industry. The overall penetration rate of mobile game apps continued to decline this quarter, and none of the top mobile games maintained growth. The weekly active user penetration rate of "Honor of Kings" has dropped to about half of its peak period.

For game companies, no new games can be launched without a version number, which means they must rely on extending the life cycle of old games to survive. But even a large company like Tencent finds it difficult to change the fact that the activity of its popular mobile games has been halved, let alone other companies with weaker competitiveness.

On the other hand, short videos continue to impact the mobile game industry. Cheetah big data shows that more and more mobile game users are also active in short video apps, and those who use both types of apps have significantly shorter game time than mobile game users who do not use short video apps. This shows that short video apps have indeed taken away some of the time of mobile game users, which is tantamount to adding insult to injury for the mobile game industry.

10. Live broadcast

11. Music

12. Audio (Knowledge Payment)

13. K12

14. Early childhood education (including educational games)

15. Sports

16. Exercise and fitness

Data description of “Cheetah Big Data”:

1. Unless otherwise specified, the data marked as "cheetah data" in this article comes from the mobile data analysis platform "Cheetah Big Data" (cn.data.cmcm.com);

2. The ranking of the list is based on the weekly active user penetration rate; only applicable to the Android platform;

3. The data is collected for the daily functions of Cheetah products and complies with relevant laws and regulations;

4. The data is affected by the user scale and distribution of Cheetah products;

5. The rankings in this article do not include Cheetah products.