Chinese smartphone users are taking to mobile ecommerce faster than expected, creating a boom for mobile internet companies.
Alibaba, one of the biggest beneficiaries, said on Wednesday that its mobile revenueshad climbed 10-fold in the three months ended June 30 – from Rmb240m in the second quarter of 2013 to Rmb2.4bn ($391m).
“We didn’t start monetising [mobile users] until the middle of last year,” said Victor Koo, chairman and chief executive of Youku Tudou. “The conversion to mobile is so fast that it is taking everyone by surprise,” he said, adding that 60 per cent of their traffic today comes from mobile internet.Also this week Youku Tudou, China largest video hosting platform, said the percentage of its revenues coming from mobile devices has increased from 3 per cent in the third quarter of last year to 30 per cent in the second quarter of 2014.
Almost 500m of China’s internet users say they have accessed the internet using smartphones, which are very cheap in China, some costing as low as $70. Experts say this figure is destined to rise rapidly as China has 900m mobile phone users, many of whom still have not entered the 3G or 4G era.
Overall, mobile internet revenues in China doubled year on year in the second quarter of 2014, from Rmb21bn to Rmb44bn, according to a study published by iResearch, a Beijing-based internet consultancy.
It said that half of the Rmb44bn was accounted for by mobile shopping.
He said discounts and promotional activities by big ecommerce groups such as Alibaba are drawing in more consumers, and reinforcing the mobile shopping habit.Wang Xiaoxin, a mobile ecommerce expert at Beijing-based Analysys EnfoDesk, said the rapid growth over the previous year is a sign of the growing maturity of the mobile shopping market. Online retailers “are targeting this immense potential market”, he said.
Alibaba, which is listing in the US this autumn, declined to comment on its results, but in its most recent filing, the group said it expects “mobile monetisation rates will continue to approach the rates we realise on our personal computer interfaces”.