Chinese consumers at the forefront of digital technologies
Deloitte releases China Mobile Consumer Survey 2018
Published: 22 January 2019
The latest survey from Deloitte, China Mobile Consumer Survey 2018, analyzes supply and demand conditions among Chinese consumers and mobile digital devices and applications, outlining nine key findings about mobile phone ownership, AI applications, fingerprint authentication, the used mobile phone market, short video apps, mobile payments, smart homes and wearables, mobile phone data and personal information protection. Based on samples collected across China, the survey provides highly representative and valuable advice for industry players.
Chinese users replace mobile phones more often than users globally
Mobile phone ownership and replacement frequency in China rank first worldwide. In 2018, smartphone ownership in China reached 96%, a year-on-year increase of 7% and 6 percentage points higher than the global average. Driven by the rise of domestic smartphones, a fiercely competitive mobile phone market, declining prices and enhanced specifications from Chinese telecom carriers, mobile phone ownership in China maintains a high growth rate and consumers can purchase new mobile phones according to their needs. Furthermore, Chinese users replace their phones more often than global users do. Nearly 80% of Chinese users bought their current phones after 2017 compared to just 58% of global users. Meanwhile, in a Chinese market filled with fast changing phone functionality, users are less interested in the second-hand mobile phone market and trade-in services, leading to a stagnant used mobile phone market.
China is pioneering AI-powered mobile apps while short video apps sweep the nation
According to the survey, the utilization rate of AI-powered apps among Chinese users is generally higher than that of global users. China has witnessed rapid growth in AI applications, thanks to open source communities built by tech giants, massive search data, diversified product lines and huge user demand. As more mobile device manufacturers step into AI technology, facial recognition, speech recognition, etc., AI-powered unlocking solutions will be more widely adopted. In the meantime, China saw a boom in short video applications in 2018. Short video apps featuring filters, video editing and cross-platform sharing are expanding rapidly. Those embedded with AI algorithms such as intelligent recommendations are extremely addictive with strong communicability and social networking. As a result, Chinese users spend more time on content than the global average and primarily devote time to text news, videos in instant messages and video news.
“Smartphones have become an indispensable part of our daily lives. New functionalities and the rise of cost-efficient domestic brands are driving user demand and shortening replacement cycles. At the same time, as short video apps gain popularity, video content is turning into a source of information. Content that was dispersed among different apps, requiring users to toggle back and forth, is now integrated on short video platforms. Today, these platforms have incubated apps that provide a variety of videos, further fragmentizing content consumption. Moving forward, video streaming platforms need to work on delivering more effective and valuable contents,” says Taylor Lam, Deloitte China National Telecommnuications, Media and Entertainment Industry leader.
Mobile payment prevails while fingerprint authentication dominates biometrics
According to the survey, China leads the world in mobile payment as its use of mobile banking services exceeds the global average. The simple operation and integrated online-offline scenarios are motivating Chinese phone users to replace bank cards with mobile wallets as an inseparable part of their daily lives. Payment methods based on biometric recognition enabled wearable devices are another key driver of the growing use of mobile payments. More advanced in-screen fingerprint readers were increasingly applied by major manufacturers in 2018, and payment solutions like WeChat and Alipay will improve the penetration rate of fingerprint authentication even further. In addition, AI-based facial and speech recognition have become the fastest growing biometric technologies, second only to fingerprint authentication. As AI and the Internet of Things (IoT) are making strides in China, the country is expected to enter the face scanning era.
China embraces unlimited mobile data and leads the way in hi-tech smart homes
With the implementation of policy that aims to “improve speed and lower fees”, and the collaboration between telecom carriers and internet-based app platforms, China has begun to see an overall drop of mobile data charges. Conditional unlimited data is putting an end to the days in the age of 4G when Chinese had to search for free wifi wherever they went.
Lowering mobile data fees presents both opportunities and challenges for carriers. The challenges arise from declining data revenue, whereas opportunities are emerging as the upcoming 5G network is set to have a massive impact on the business models of China’s telecom carriers. They are expected to identify the transformation of their roles in the 5G era and explore a more diversified revenue model. Research shows 38% of mobile users will subscribe to 5G networks as soon as they becomes available.
“As smart devices become prevalent, user privacy leakage is increasingly a concern. Compared with users worldwide, Chinese are more sensitive to personal data leakage, with over 70% 'very concerned' about their data being used. In general, more than 70% of users in China and the rest of the world express a 'lack of trust' in businesses and third parties as they think companies will use their personal information and provide it to third parties. However, as there is still room for improvement in China’s laws and regulations on user data protection, Deloitte suggests businesses need to be more aware of how their users value personal data and take measures to safeguard data security. Likewise, government agencies are expected to improve China's cybersecurity regulations by introducing laws that address the excessive collection, theft and sale of user data,” says William Chou, Deloitte China National Technology, Media and Telecommunications industry leader.