Major News and Events:

Mobile Internet Revenues See Tremendous Growth in Q2/2014

Data firm iResearch has announced that for Q2 2014, the mobile internet market saw overwhelming growth. Total revenues for the quarter amounted to 44.49 billion Yuan (~USD 7.24) showing quarter over quarter growth of 25% and year over year growth of 104.1%.

Mobile shopping accounted for over 50% of the total revenues for the first time. The rise in mobile shopping was pushed by a number of promotions and the World Cup. iResearch also found that companies benefited from adding shopping apps and flash sales geared to mobile devices.

Going forward iResearch expects more focus on mobile development and increased competition. The internet/e-commerce giants, in particular (Baidu, Alibaba and Tencent) will likely increase their attempts to outspend to attract new and current users. It will be imperative for smaller firms to increase their development of innovative products to keep up with the highly competitive larger firms. With no slowdown in sight for new mobile users it appears there will still be plenty of opportunity to go around however.

Consumer Sentiment on the Upswing in China

In a recent survey by The Boston Consulting Group (BCG), Chinese consumers have become more positive on the economy. The survey which polled 1,000 consumers in 12 cities, conducted in April by BCG’s China Center for Consumer and Customer Insight, showed that general consumer sentiment and levels of security are on the upswing.

As a result, the intention to spend has recovered significantly as well. This year, 31 percent of consumers plan to increase their discretionary spending over the next 12 months. That’s only 4 percentage points more than last year and quite a bit less than the high of 38 percent in 2012, but this year’s results mean that the number of consumers who intend to spend more once again exceeds the number who intend to spend less.

Second and third tier cities saw the most optimistic respondents. The intention to spend among middle-class and affluent consumers (MACs) increased 8 percentage points from last year, from 26 percent to 34 percent. (MACs are consumers with more than RMB 7,200 per month in income.)

While respondents to the survey from all geographic areas said they are under less stress, feel less anxiety about the future, and are less worried about losing their jobs than they were last year, rebounds were far stronger among MACs in small cities.