China's mobile internet monthly active users decline for the first time

On July 23, QuestMobile, a research organization focusing on mobile app data and mobile user behavior data analysis, released the "QuestMobile China Mobile Internet 2019 Half-Year Report". The focus of this report is that the demographic dividend of mobile Internet has arrived, and the boundaries of the incremental market are gradually becoming clear.

The report shows that from January 2018 to June 2019, the year-on-year growth rate of the scale of monthly active users (MAU) of China's mobile Internet users gradually dropped from 6.2% to 2.8%. Since February this year, the scale of MAU has stopped growing, and even dropped by 1.93 million in Q2 2019. In other words, the scale of monthly active devices of China's mobile Internet has reached a peak of 1.14 billion. At the same time, users spend an average of nearly 6 hours a day on the mobile Internet, but the growth rate of time has also slowed down.

As a result, players in the market are competing more in the stock market. The report also revealed that "private domain traffic", which is different from "public domain traffic", mini programs, and short videos, all show increasing potential in bonding users. Even though the ceiling of China's mobile Internet user population and usage time dividend is approaching, there are still new opportunities in the sinking market. In the report, a new keyword, 5G, also appeared. With tens of billions of terminal devices connected to the Internet and trillions of smart device markets, 5G is activating a new imagination.

Competing for user time

According to QuestMobile data, the penetration rates of the three BAT companies are all over 80%. With the mobile traffic dividend basically disappearing, Toutiao has broken through with its short video products, and its monthly active user base has increased by more than 25% year-on-year. In terms of user time share, BATT accounts for 70% of the total network time. Among them, the Tencent and Baidu systems declined, while the Alibaba and ByteDance systems rose, and the ByteDance system increased from 10.3% to 11.7%. With the slowdown in time growth, the increase in the number of app types used per person per month means a cross-track user attention grabbing between subdivided tracks: the current average monthly per capita use of applications is as high as 18 categories, an increase of 11.8% year-on-year.

Specifically, entertainment content consumption is still the main source of time increment, especially the short video industry, which contributes more than 60% of the overall time increment. Mini programs also show great potential in time growth. Among WeChat mini programs, the number of mini programs with MAU exceeding 5 million increased from 133 in June 2018 to 180 in June 2019, and the number of mini programs with MAU exceeding 1 million has reached 883.

Keep users and explore monetization

The platform uses a combination of "public domain traffic" and "private domain traffic" to continue exploring monetization models. The former is the exposure area given by the platform, while the latter is an area that individuals can control under certain conditions, such as Taobao's "Weitao". QuestMobile explains that private domain traffic that has settled based on content interests or trust relationships is more accurate and convenient to reach users than public domain traffic, and has higher conversion rates, average order values, and repurchase rates. In addition, the ecological membership rights of major typical platforms are also constantly improving. More players are beginning to compete for paid members, and are also testing the "linked membership" model with low membership fees and high rights, such as Tencent Video's linkage with JD PLUS members during the 618 period.

At the same time, BAT is also competing for mini programs. WeChat mini programs are based on social traffic to empower life and entertainment scenarios; Alipay mini programs rely on Alibaba's strong business capabilities to expand cross-scenario users of the group's consumer business; Baidu smart mini programs are more open, based on open source alliances to serve a wide range of vertical Internet players. Mini programs have become an important source of incremental users for mobile shopping platforms. The number of deduplicated users of Taobao Mobile has reached 680 million, and Pinduoduo has become the second largest e-commerce platform with a user scale of nearly 400 million.

Short videos are also very impressive in the exploration of commercial realization. According to reports, the competition between Douyin and Kuaishou has intensified, and the number of overlapping users has doubled to 160 million in one year. Since the beginning of this year, both companies have accelerated the pace of commercial realization. Douyin is better at leveraging the value of centralized media, while Kuaishou is more focused on the value of decentralized anchors and fans. At present, the commercialization process of the short video industry has accelerated, and advertising, live broadcast rewards and product promotion have become the main business models.

Opportunities in the making

QuestMobile's report pointed out that the sinking market has become the most important battlefield in 2019. The pan-entertainment industry has priority to obtain dividends in the sinking market, among which short videos are the most prominent, with a year-on-year increase of over 100 million. Entertainment and life-related apps have gained the most new users in the sinking market. Taking the performance of free reading in the sinking market as an example, the digital reading industry has ushered in a new dividend period. With the support of the free reading model, it has entered the sinking market, and the scale of industry users has increased by 100 million to 484 million year-on-year. As of June 2019, the number of apps with a free model continued to expand, accounting for more than 60%.

Compared with previous reports, QuestMobile emphasized a new keyword this time - 5G. On June 6, 2019, the Ministry of Industry and Information Technology officially issued a 5G commercial license, and China officially entered the first year of 5G commercialization. The report pointed out that with the acceleration of 5G infrastructure construction, the trillion-dollar market is about to explode. It is predicted that the direct/indirect economic output brought by 5G will gradually exceed the trillion-dollar level in the next few years. 5G will promote the outbreak of IoT applications. It is expected that industries such as smart homes and smart cars will benefit first, and the trillion-dollar smart device market will be activated.

The trend described in this semi-annual report is that the ceiling of the mobile Internet user population and usage time bonus is approaching, but there is more to it than just "chilling". Platforms are also actively exploring new sustainable monetization models, while competing for users and their attention in the existing market and continuously exploring the sinking market. In addition, China's mobile Internet will also usher in 5G, a new thing with great imagination.