New mobile habits hit China

14 June 2011

BEIJING: More than 6m consumers in China now use location-based services on their mobile phones, a study has revealed.

Figures from Enfodesk - a unit of insights provider Analysys International - estimated 6.55m people in the world's most populous nation currently utilise geo-location platforms.

This can be measured against comparative ratings of 3.5m posted during the third quarter of 2010, and 5.2m in the closing three months of last year.

However, Enfodesk noted that sequential growth rates had dipped from over 100% in Q3 2010 to 26% in the latest research round.

The primary obstacles to further expansion incorporate relatively low smartphone penetration, concerns regarding the costs of data transfers and a lack of familiarity with such tools.

Equally, the fledgling nature of many firms active in this space means they do not possess the necessary resources to run offline marketing campaigns which could boost awareness.

Despite this, it was predicted "dozens" of Chinese start-ups will adopt the model pioneered by Foursqaure, but also that they may offer little differentiation.

As the category develops and investment levels rise, a degree of consolidations should occur.

Equally, leading social networks must be expected to stake a claim in this arena, just as Facebook has with its Places and Deals properties in the US.

As the expense of "migrating" existing users is much cheaper than securing an entirely new audience, Enfodesk forecast around 15 independent operators would remain standing by the close of this year.

The top players in this sector at present include Jiepang, Bedo and Dianping.

Data sourced from Analysys International; additional content by Warc staff