China set for mobile ad boom

03 February 2012

BEIJING: Mobile commerce and advertising revenues are set to rise rapidly in China, driven by the increasing uptake of smartphones and tablets, a new study has predicted.

According to iResearch, the insights provider, the mobile market – including value-added services, mcommerce, ads, paid search and games – on phones and tablets was worth RMB39.3bn ($6.2bn) in 2011.

This almost doubled the RMB19.9bn posted in 2010, and can be compared with the figure of RMB9.7bn logged in 2006. The sector is due to reach RMB97.6bn in 2012 and RMB425bn by 2015.

One factor fuelling this trend will be the "explosive growth" of the mobile web, the user base for which now stands at 338m people, up 11.6% year on year, with considerable room for expansion remaining.

Moreover, iResearch suggested the launch of smartphones costing under RMB1,000 should further accelerate such a process, when the audience is anticipated to hit 411m.

By 2015, the mobile internet population could grow to 712m subscribers, measured against a forecast 492m users in 2013 and 571m in 2014.

Value-added services yielded 50% of revenues last year, with mobile commerce on 30%. These totals stood at 60% and 10% respectively in 2010, pointing to the fact a shift is underway.

Indeed, by 2015, iResearch expects mobile commerce should deliver 70% of market revenues, whereas the share held by value-added services will have diminished to just 10%.

Mobile advertising – excluding display and video – came in at a relatively modest RMB2.4bn in 2011, although this constituted a lift from RMB1.2bn in 2010.

Revenues for 2012 are pegged at RMB6.3bn, with annual growth rates topping 50% likely in the near term, so that adspend comes in at RMB24.5bn by 2015.

More broadly, iResearch stated many brand owners have "accepted" mobile advertising and are actively running campaigns, encouraging improvements across the emerging industry ecosystem.

Data sourced from iResearch; additional content by Warc staff