Gaming Dominance Solidifies Tencent’s Leadership

Gaming remains Tencent’s most dominant segment, with revenues from its Value-Added Services (VAS) business—comprising gaming and social networks—rising 9% YoY to RMB 82.7 billion.

Domestically, hit titles like Honor of Kings and Peacekeeper Elite continued to deliver solid growth, supported by Valorant and the newly launched Delta Force. In the international market, Tencent expanded Valorant to consoles, boosting gross receipts by over 30% YoY.

This success underscores Tencent’s ability to maintain engagement in a competitive gaming landscape. The company’s investments in AI-driven personalized experiences and enhanced live-service elements further strengthen its position globally.

Social Media: Expanding Beyond Communication

Tencent’s social media platforms, Weixin (WeChat) and QQ, remain integral to its ecosystem. WeChat’s combined Monthly Active Users (MAUs) grew to 1.382 billion, while QQ saw a modest increase in MAUs.

WeChat Mini Programs achieved a Gross Merchandise Value (GMV) exceeding RMB 2 trillion, driven by expanded use cases like food ordering and electric vehicle charging. These initiatives reflect Tencent’s strategy of embedding commerce and services directly into its social platforms, enhancing user convenience and stickiness.

Leveraging AI, Tencent improved WeChat Search’s ability to handle complex queries, significantly increasing commercial click-through rates. QQ also saw innovation with upgraded infrastructure and new features, marking a return to YoY MAU growth.

Marketing Services and Advertising Resurgence

Tencent’s Marketing Services revenue, which rose 17% YoY to RMB 30 billion, demonstrates strong demand for its advertising solutions. Key contributors included Video Accounts, Mini Programs, and WeChat Search.

The Paris Olympics provided an additional boost, as advertisers sought to capitalize on high-profile events. Notably, eCommerce and gaming advertisers increased spending, offsetting weakness in categories like real estate and food and beverage.

FinTech and Business Services: Mixed Growth Amid Economic Headwinds

Revenue from FinTech and Business Services rose by 2% YoY to RMB 53.1 billion. FinTech services, encompassing payment and wealth management, showed stability, with the latter benefiting from increased user activity and assets under management.

Payment services, however, faced subdued consumption. In Business Services, growth in cloud services revenue was a highlight, aligning with Tencent’s broader focus on supporting digital transformation.

Tencent’s ongoing partnerships, such as the integration of JD Logistics with Taobao and Tmall, reflect its strategy of extending its influence across China’s digital ecosystem.

AI-Driven Innovations: A Key Pillar of Future Growth

Tencent’s AI investments came to the forefront with the launch of Hunyuan Turbo, an upgraded foundation model leveraging a heterogeneous Mixture-of-Experts (MoE) architecture. This model delivers double the training and inference efficiency at half the cost compared to its predecessor, underscoring Tencent’s commitment to deploying cutting-edge AI across its businesses.

The company has integrated AI capabilities into various offerings, from personalized gaming experiences to Weixin’s search algorithms and targeted marketing services. These initiatives aim to enhance operational efficiency and deliver value to users and advertisers.

Financial Strength and Shareholder Returns

Tencent continues to demonstrate financial resilience, with gross profit rising 16% YoY to RMB 88.8 billion and non-IFRS profit for equity holders increasing 33% YoY to RMB 59.8 billion. Free cash flow stood at RMB 58.5 billion, reflecting strong operational performance.

The company’s share repurchase program, totaling HKD 35.9 billion during the quarter, underscores its commitment to delivering shareholder value. With net cash of RMB 95.5 billion, Tencent is well-positioned to pursue strategic investments and initiatives.

Challenges and Strategic Focus

While Tencent’s diverse portfolio shields it from sector-specific risks, challenges such as fluctuating consumer spending in FinTech services and intensified competition in the cloud space remain. However, its strategic investments in AI, content, and ecosystem integration signal a clear focus on long-term growth.

Tencent’s third-quarter performance highlights its ability to adapt and thrive in a rapidly evolving market. By aligning its core businesses with emerging trends in AI, digital transformation, and consumer engagement, Tencent is not just navigating challenges but setting a course for sustainable growth.

Tencent’s Q2 2024 Results

Tencent Holdings announced its unaudited consolidated results for the second quarter of 2024, showcasing robust growth and strategic advancements across its diverse business segments. The company’s performance underscores its commitment to leveraging its platform plus content strategy, with notable successes in both domestic and international markets.

WeChat Video Accounts and Mini Programs:

Video Accounts: Tencent reported a substantial year-on-year increase in total user time spent on Video Accounts, driven by enhanced recommendation algorithms and an expanded array of local content. The company is systematically strengthening transaction capabilities within this platform to deliver seamless shopping experiences, thereby driving sales for merchants.

Mini Programs: The total user time spent on Mini Programs also grew by over 20% year-on-year, benefiting from the platform’s robust commerce and content ecosystem. Notably, the gross merchandise value (GMV) facilitated by Mini Programs experienced double-digit percentage growth, and total gross receipts from Mini Games increased by over 30% year-on-year.

Tencent Channels and Long-form Video

Tencent Channels: This community-based platform, which evolved from QQ, was rebranded and upgraded to enable moderators to manage channels with customizable tools. Users can now interact through text, image, and live streaming features, accessible from Weixin/WeChat, game apps, and QQ.

Tencent Video: The release of popular drama series fueled a 13% year-on-year growth in long-form video subscriptions, reaching 117 million subscribers. Notable titles like “Joy of Life 2” and “The Legend of Shen Li,” based on IPs from China Literature and produced by New Classics Media, were significant contributors to this growth.

Gaming

Domestic Games: Tencent’s flagship domestic games, such as “Honour of Kings” and “Peacekeeper Elite,” resumed year-on-year growth in gross receipts. Additionally, “Naruto Mobile” achieved a new milestone with 10 million monthly average daily active users (DAU) in May 2024, while the newly launched “DnF Mobile” showed promising retention rates.

International Games: International Games revenues reached RMB13.9 billion, marking a 9% year-on-year increase. “Brawl Stars,” with frequent content updates and social features, achieved a historical high in quarterly average DAU and saw gross receipts grow more than tenfold year-on-year.

Advertising and AI Initiatives:

Online Advertising: Revenues from online advertising increased by 19% year-on-year, primarily due to the strong performance of Video Accounts and long-form video advertising. The company upgraded its advertising technology platform to analyze user interests more effectively, resulting in deeper insights and more relevant ad recommendations.

AI Initiatives: Leveraging its top-tier foundation model, Tencent Hunyuan, the company released its AI assistant application, Yuanbao, to the public. Yuanbao is noted for its competitive strengths, including accurate image understanding, advanced natural language processing, and enhanced AI search capabilities.

Financial Highlights

Tencent’s financial performance in Q2 2024 was marked by significant growth across key metrics, reflecting the company’s successful execution of its strategic initiatives.

• Total Revenues: Tencent’s total revenues for the second quarter reached RMB161.1 billion (USD22.6 billion), representing an 8% increase year-on-year.
• Gross Profit: The company reported a gross profit of RMB85.9 billion (USD12.1 billion), a 21% increase compared to the same period last year, with a gross margin of 53%.
• Non-IFRS Operating Profit: On a non-IFRS basis, operating profit grew by 27% year-on-year to RMB58.4 billion (USD8.2 billion), with an operating margin of 36%.
• Net Profit: Profit attributable to equity holders of the company increased by 53% year-on-year to RMB57.3 billion (USD8.0 billion), highlighting strong profitability.
• Free Cash Flow: Tencent generated RMB40.4 billion (USD5.7 billion) in free cash flow during the quarter, up 35% year-on-year, contributing to a total cash position of RMB415.2 billion (USD58.3 billion).
• Shareholder Returns: The company repurchased approximately 103.7 million shares on the Hong Kong Stock Exchange for a consideration of HKD37.5 billion and paid a final dividend of HKD31.7 billion for the year ended December 31, 2023.

Tencent’s Q2 2024 results underscore the company’s resilience and adaptability in a competitive market, with its diverse business segments continuing to deliver strong growth and profitability.

Tencent’s Impressive Q1 2024 Financial Performance Sets Strong Foundation for Future Growth

Tencent Holdings Limited has announced its unaudited consolidated results for the first quarter of 2024, showcasing robust growth across various sectors despite challenging market conditions.

The company, a leading internet and technology conglomerate in China, has reported substantial improvements in gross profit and net profit, reflecting its strategic focus on high-quality revenue streams and innovative technological advancements.

Strategic Initiatives and Business Review

Tencent’s latest quarterly results highlight the company’s dynamic approach to growth and innovation. The tech giant has focused on enhancing its core business segments while venturing into new revenue streams, leveraging its technological prowess and market leadership.

In the gaming sector, Tencent continues to solidify its dominance both domestically and internationally. Several flagship titles, including “Fight of the Golden Spatula” and “CrossFire Mobile,” achieved record-high gross receipts. Meanwhile, international hits like “PUBG Mobile” and Supercell’s “Brawl Stars” reported impressive gains in user engagement and revenue, underscoring Tencent’s global appeal in the gaming industry.

The company has also made significant strides in digital content. WeChat Video Accounts saw a dramatic increase in user engagement, with total user time spent rising by over 80% year-over-year.

Similarly, Mini Programs, a staple feature of WeChat, reported a 20% increase in user engagement, reflecting Tencent’s ability to continuously innovate and expand its ecosystem.

Tencent’s advertising sector has benefited greatly from its advancements in AI technology. The introduction of generative AI-powered tools has revolutionized its advertising platform, resulting in higher engagement and more effective ad campaigns. This innovation has been particularly impactful for Video Accounts and Mini Programs, driving substantial growth in advertising revenue.

In the FinTech arena, Tencent’s wealth management business has shown robust growth, marked by a surge in user numbers and average fund investments. Tencent Cloud Media Services, a leader in the media and entertainment sectors, has maintained its strong market position, further demonstrating the company’s diverse and resilient business model.

Operating Metrics

• Combined MAU of Weixin and WeChat: 1,359 million, a 3% YoY increase.
• Mobile Device MAU of QQ: 553 million, a 7% YoY decrease.
• Fee-based VAS Registered Subscriptions: 260 million, a 12% YoY increase.
• Video Accounts Total User Time Spent: Increased over 80% YoY.
• Mini Programs Total User Time Spent: Increased over 20% YoY.

Financial Highlights

Tencent’s financial performance in Q1 2024 reflects its strategic focus and operational efficiency:

• Total Revenues: RMB 159.5 billion ($22.5 billion), a 6% year-over-year (YoY) increase.
• Gross Profit: RMB 83.9 billion ($11.8 billion), up 23% YoY.
• Non-IFRS Operating Profit: RMB 58.6 billion ($8.3 billion), a 30% YoY increase.
• Net Profit Attributable to Equity Holders: RMB 50.3 billion ($7.1 billion), up 54% YoY.

Segment Performance

• Value-Added Services (VAS): Revenue slightly decreased by 0.9% YoY to RMB 78.6 billion, with social networks and domestic games experiencing minor declines, while international games revenue grew by 3%.
• Online Advertising: Revenue surged by 26% YoY to RMB 26.5 billion, driven by increased engagement and enhanced AI-powered ad targeting.
• FinTech and Business Services: Revenue increased by 7% YoY to RMB 52.3 billion, with solid growth in cloud services and wealth management.

Tencent’s first-quarter results highlight its resilient business model and strategic adaptability. The company’s revenue growth, though moderate, is accompanied by a substantial increase in gross profit and operating margin, indicating improved operational efficiency.

Comparing these results with previous quarters and industry peers, Tencent stands out for its balanced growth across diverse revenue streams. The company’s focus on high-margin businesses, such as cloud services and digital content, is a strategic move that is paying off well.

Financial Highlights: A Glimpse into Growth

Tencent’s fiscal narrative for 2023 is one of notable achievements, underscored by a 10% year-over-year growth in total revenues, reaching an impressive RMB609.0 billion (USD86.0 billion).

This expansion is further emphasized by a 23% increase in gross profit, showcasing the company’s enhanced profitability in a fiercely competitive digital marketplace. Furthermore, the non-IFRS profit attributable to equity holders witnessed a substantial 36% increase from the previous year, indicating strong core earnings performance .

The final quarter of 2023 continued this trend, with revenues escalating by 7% year-over-year to RMB155.2 billion (USD21.9 billion), and gross profit and non-IFRS profit attributable to equity holders of the company experiencing significant increases of 25% and 44% respectively.

In 2023, Tencent’s revenue breakdown highlighted the diversity of its business portfolio, with significant contributions from various segments.

The FinTech and Business Services sector emerged as the largest revenue source, representing 31% of the total revenue and amounting to RMB189.0 billion. This segment’s leading position underscores Tencent’s stronghold in the FinTech industry and its successful foray into comprehensive business services.

Following the FinTech and Business Services sector, the Online Games segment was the second-largest contributor to Tencent’s revenue, accounting for 29% and totaling RMB177.0 billion. This demonstrates the continued vitality of online gaming within Tencent’s business model.

The fastest-growing segment in 2023 was Tencent’s Cloud Computing business, which experienced a remarkable 30% year-over-year revenue increase, reaching RMB109.0 billion. This growth outpaced the other segments, notably the Social Networks segment, and underscored Tencent’s effective strategy and execution in the competitive cloud services market.

Overall, Tencent’s 2023 financial performance showcased the strength of its FinTech and Business Services as the leading revenue generator, with the Cloud Computing segment leading in growth, reflecting the company’s adaptability and strategic positioning in China’s evolving digital landscape.

Strategic Endeavors and Innovation

2023 saw Tencent advance through strategic milestones:

Enhancing User Experience: Tencent’s WeChat Video Accounts doubled in user time spent, thanks to improved algorithms and creator support. Additionally, the Mini Games platform’s gross receipts soared by over 50%, reinforcing Tencent’s leadership in China’s casual gaming sphere .

Pioneering in AI: The launch of Tencent Hunyuan, an AI model of a trillion-parameter scale, marks a leap in Tencent’s technological prowess, solidifying its commitment to spearheading digital innovation .

Commitment to Society and Environment: Tencent’s digital philanthropy platform set a new record with RMB3.8 billion raised during the 99 Giving Day campaign, while its New Cornerstone Investigator Program supported 104 scientists, promoting scientific research .

As of the end of 2023, Tencent Music Entertainment Group (TME) reported a notable increase in its music subscribers. The total number of online music paying subscribers reached 90 million, marking an 18% year-over-year growth.

Market Engagement and User Dynamics

Tencent’s operational statistics reveal evolving trends in user engagement:

• The MAUs of Weixin and WeChat stood at 1,343 million by December 2023, a 2% increase year-over-year, highlighting the platforms’ expanding influence in social media .
• Despite a marginal decline in VAS revenues, Tencent’s strategic emphasis on content diversity and innovative services positions it for sustained growth amidst market challenges .

Tencent’s 2023 saga is one of strategic brilliance and financial vigor, positioning it at the forefront of China’s digital transformation. With its commitment to innovation, user-centricity, and societal impact, Tencent is poised to continue shaping the contours of China’s digital future.

Mobile reach in China: Tencent, Alibaba, Baidu, ByteDance, vs. Kuaishou

According to WeChat, search ads will support six promotion goals, including WeChat Official Account promotion, sales lead collection, products promotion, branding events promotion, app promotion, and WeChat Mini Games promotion.

It supports three landing page types, namely, native promotion page, WeChat Mini Program, and custom link. And, based on the search ability of WeChat, WeChat search advertising can support the sale of brand keywords, keywords words, generic keywords, and generic keywords.

At present, Tencent’s mobile search advertising scenarios mainly include WeChat Search and QQ Browser search. In these scenarios, advertisers can do brand and performance marketing.

Since the launch of search feature on WeChat in 2017, it has been at the top of the main interface.

However, after five years of iteration, it has now become a “global search” that includes WeChat Moments, Official Account, and Mini Programs from the early days when it could only search local chat records and contacts.

At the same time, the search scope has also expanded to all content and services related to search queries in WeChat.

WeChat Mini Programs Insights

Among non-internet companies, the top three advertisers are L’Oreal, Unilever, and P&G in 2021 with a total ad spend of 3.35 billion yuan, 2.97 bn yuan, and 2.04 bn yuan respectively.

Total ad spend in display advertising decreased further in 2021 by 7.6% YoY.

Read more on China’s digital advertising insights here.

Tencent Music’s Paying ratio increased to 9.9%, up from 8.0% and 9.0% in the third and fourth quarters of 2020, respectively. Its mobile MAU for online music platforms saw a decrease of 6.4% YoY in Q1 2021 to 615 million.

Tencent Music upgraded its products to be more social, personalized, and visually appealing during the first quarter of 2021:

• Putong Community has continued to gain popularity, growing in user penetration and retention rate quarter-over-quarter, and has become one of the leading channels for fan-idol interaction and content promotion.
• Kugou Fans Club has also drawn many leading artists, labels and content IPs to interact with their fans live, resulting in an increasing proportion of young users in this community, as well as sequential increases in penetration and time spent per user.

For long-form audio, it made noteworthy progress in both integrated and standalone approaches, as well as its monetization during the first quarter of 2021:

• After exceeding 100 million MAUs at the end of 2020, MAU penetration reached 20.0% compared to 5.5% in the first quarter of 2020.
• Significantly enriched long-form audio content offering with the number of licensed titles more than quadrupled year-over-year.
• Accelerated the addition of PUGC and UGC long-form audio content. QQ Music launched the Ground Zero Podcast program, which offers financial resources and tools that enable original podcast content creation.
• In March 2021, it completed the acquisition of Lazy Audio and started consolidation. It also integrated Kuwo Changting with Lazy Audio to form Lanren Changting in April, a new brand for Tencent Music’s long-form audio business
• It recently started its foray into ad-based monetization giving users easy access to a vast amount of high-quality audio content.

China online entertainment market overview 2021

Financial Highlights

Total revenues were RMB7.82 billion (US$1.19 billion), representing an increase of 24.0% year-over-year.

• Online music services revenues grew by 34.5% year-over-year.
• Revenues from music subscriptions were RMB1.69 billion (US$258 million), representing 40.2% year-over-year growth.
• Revenues from advertising services recorded over 100% year-over-year growth.

Net profit was RMB979 million (US$149 million) and net profit attributable to equity holders was RMB926 million (US$141 million). Non-IFRS net profit was RMB1.24 billion (US$188 million) and Non-IFRS net profit attributable to equity holders was RMB1.18 billion (US$180 million).

The purchaser is Science City (Guangzhou) Investment Group Co., Ltd., with a project valued of nearly 460 million yuan, which has become the largest bidding project order in the field of intelligent transportation in China this year.

The order includes the construction of vehicle road network infrastructure, intelligent intersection, Internet of vehicles, and other related application systems, which is expected to accelerate the construction of Guangzhou Development Zone and Guangdong Hong Kong Macao Bay Area Intelligent Network.

Baidu Performance in Q2 2020

Baidu App daily active users (“DAUs”) reached 204 million in June 2020, adding 16 million users in the last 12 months but 18 million less from March 2020, according to its financial results.

Over 800 sessions of topical live streaming were broadcasted in the second quarter of 2020 on Baidu’s platform, with sessions like Baidu Wiki Virtual Zoo, Summer Art Festival, and Wandering through Civilization Season 2, attracting over 40 million views.

Baijiahao (“BJH”) publisher accounts reached 3.4 million, up 52% year over year, in June 2020. The large scale of Baidu’s platform is drawing more original content creators to join BJH, which allows easy sharing of content across Baidu App, short-video app Haokan, Quanmin, and Baidu’s knowledge products.

Baidu Smart Mini Program’s monthly active users on Baidu App reaching 339 million, up 25% year over year or down over 4% from March 2020.

Revenue from Baidu Managed Page increased to approximately 30% of Baidu Core’s online marketing services revenue in the second quarter of 2020. Merchants with HTML5 websites across many industries are switching to Managed Page, as the landing page for their search results.

Baidu’s new AI businesses, including cloud, smart devices, and smart transportation, saw double-digit growth in the second quarter and stand to become an important revenue driver in the years to come.

Baidu is also diversifying its revenue streams through membership, online games, and others to increase the ARPU of the existing traffic according to Herman Yu, CFO of Baidu. The growth of Baidu App and new AI businesses have enabled Baidu Core’s adjusted EBITDA margin to reach 41% in the second quarter.

Baidu returned US$540 million to shareholders under the 2020 Share Repurchase Program in the second quarter, bringing the Company’s cumulative repurchase for the last two years to approximately US$1.9 billion.

Baidu’s board of directors recently approved a change to the 2020 Share Repurchase Program, increasing the repurchase authorization from US$1 billion to US$3 billion, which is effective through December 31, 2022.

DuerOS

In June 2020, Baidu’s DuerOS monthly voice queries on Xiaodu devices (its smart speakers) reached 2.8 billion, nearly doubling from last year, and DuerOS total monthly voice queries reached 5.8 billion, up 57% from last year.

DuerOS skills store now offers 4,000 skills in wide-ranging genres, including education, video, online game, and live streaming. DuerOS developer community has grown to over 42,000 members.

JD.com announced that Xiaodu series of smart displays and smart speakers were the best-selling in the smart speaker category on its platform during this year’s June 18 Shopping Festival.

Cloud, AI Services & AI Platform.

Baidu formed a strategic partnership with China National Building Materials Group (CNBM Group), the parent of 13 listed companies.

CNBM Group plans to use Baidu AI PaaS, equipped with big data and IoT edge computing capabilities, to provide intelligent logistics, intelligent factory and industrial autonomous driving.

For example, CNBM Group plans to use Baidu AI PaaS paired with Baidu intelligent map to improve the routing efficiency of its logistics vehicles and track the vehicles whereabouts to optimize operational costs and increase traffic safety.

Baidu’s AI open platform, built on top of Baidu Cloud, offers over 260 AI capabilities, which are tapped by over 2.1 million developers.

Apollo

The Apollo robotaxi operations in Beijing, Changsha and Cangzhou have expanded into larger networks and more complex road conditions, such as downtown streets.

In May 2020, Baidu completed the 145,000 square feet Apollo Park in Beijing, an autonomous driving and V2X testing facility that supports testing, operational command center, cloud control system, vehicle warehousing, maintenance, and calibration.

iQIYI

One of the top online video platforms iQIYI’s subscribers reached 104.9 million, up 4% year over year, in June 2020, and membership revenue was up 19% year over year.

Financial Results

Total revenues reached RMB 26.0 billion ($3.69 billion), decreasing 1% year over year.

• Online marketing revenues were RMB 17.7 billion ($2.50 billion), decreasing 8% year over year.
• Other revenues were RMB 8.3 billion ($1.18 billion), increasing 18% year over year, driven by the strong growth of iQIYI membership and Baidu’s cloud and smart transportation solutions.
  • Revenue from iQIYI reached RMB 7.4 billion ($1.05 billion), up 4% year over year.

Its share price fell more than 6% in the extended session Thursday.

Revenue from Baidu Core reached RMB 18.9 billion ($2.68 billion), decreasing 3% year over year.  iQIYI membership revenue grew 19% year over year, partially offset by online advertising revenue declining 28% year over year.

Cost of revenues was RMB 13.1 billion ($1.86 billion), decreasing 19% year over year, primarily due to a decrease in traffic acquisition costs, sales tax and surcharges, and costs of goods sold. The decrease in traffic acquisition costs reflected decreasing union revenues, as Baidu focused on optimizing profitability over revenue growth.

Selling, general and administrative expenses were RMB 4.4 billion ($625 million), decreasing 16% year over year, primarily due to decreased marketing spending and personnel-related expenses.

Research and development expenses were RMB 4.8 billion ($685 million), increasing 2% year over year.

Operating income was RMB 3.6 billion ($516 million) and operating margin was 14%. Baidu Core operating income was RMB 5.0 billion ($703 million) and Baidu Core operating margin was 26%.

Non-GAAP operating income was RMB 5.6 billion ($793 million), and non-GAAP operating margin was 22%. Non-GAAP Baidu Core operating income was RMB 6.5 billion ($917 million), and non-GAAP Baidu Core operating margin was 34%.

Total other income was RMB 366 million ($53 million), decreasing 70% year over year, primarily due to loss from equity method investments, which is booked a quarter in arrears and reflects the impact of COVID-19 on its investees.

Income tax expense was RMB 1.2 billion ($174 million), which included tax withholding accrual for dividend distribution to offshore entities, compared to RMB 416 million in Q2 2019.

Net income attributable to Baidu was RMB 3.6 billion ($507 million), and diluted earnings per ADS was RMB 10.31 ($1.46). Net income attributable to Baidu Core was RMB 4.4 billion ($626 million).

Non-GAAP net income attributable to Baidu was RMB 5.1 billion ($719 million), and non-GAAP net margin was 20%. Non-GAAP diluted earnings per ADS amounted to RMB 14.73 ($ 2.08). Non-GAAP net income attributable to Baidu Core was RMB 5.7 billion ($801 million), and non-GAAP net margin for Baidu Core was 30%.

Adjusted EBITDA was RMB 7.0 billion ($993 million) and adjusted EBITDA margin was 27%. Adjusted EBITDA for Baidu Core was RMB 7.8 billion ($1.1 billion) and the adjusted EBITDA margin for Baidu Core was 41%.

As of June 30, 2020, cash, cash equivalents, restricted cash, and short-term investments were RMB 154.1 billion ($21.80 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 144.6 billion ($20.46 billion).

Free cash flow was RMB 7.3 billion ($1.04 billion). Free cash flow excluding iQIYI was RMB 8.8 billion ($1.24 billion).

Baidu may spin off its online storage business

Baidu recently plans to split multiple internal businesses, which may be listed independently, according to Business Data.

Baidu declined to comment on the news.

If spun off, Baidu online storage business can benchmark the US cloud storage company Dropbox for its valuation. The market value of Dropbox has exceeded $9.016 billion at the intraday price on July 28.

After 360 Cloud disk, Kingsoft Online Disk, Xunlei Express Disk, Netease Cloud Disk, and other similar products stopped services, Baidu Online Disk, launched in February 2012, continues its service with a large storage capacity of 100G and clean interface.

According to 36Kr, in November 2019, the number of MAU (monthly active users) in China’s personal online storage industry was 107 million, with a penetration rate of 22.1% for mobile Internet users nationwide. Baidu Online Disk market share is 82.9%, followed by Tencent Weiyun, about 8% market share.

Questmobile’s data show Baidu Online Disk has a market share of over 85% with 600 registered users and over 100 million MAU. It currently generates revenues from users, advertising, information, mini programs, and etc.

Baidu starts offering Microsoft’s MSN ad inventory on a new ad platform

Baidu announced on 8 July 2020 that it is providing advertisers direct access to Microsoft’s MSN native desktop inventory via Baidu’s MediaGo advertising platform. The agreement enables advertisers around the world to reach consumers in the United States through premium placements on multiple MSN properties.

Rather than requiring advertisers to purchase bulk inventory, as is standard practice for many digital ad companies, this collaboration allows advertisers to secure the placements that fit their goals and budget on MSN’s desktop site.

As part of Baidu’s ongoing effort to bridge the gap between Eastern and Western markets, Baidu works with Microsoft to offer their premium MSN placements to its advertising partners in China, the U.S. and beyond. It will continue to explore meaningful ways to provide mutual growth opportunities to global advertisers and U.S. media.

The cooperation allows advertisers worldwide to access high-visibility, native placements on the MSN homepage, as well as other sister pages throughout the MSN site, via Baidu’s MediaGo ad platform.

With MediaGo, advertisers can upload assets, select placements on top-tier MSN properties and measure campaign success on a single centralized platform. MediaGo also offers 24/7 local language account management services.

“Baidu’s MediaGo platform streamlines the process for global advertisers to purchase high-visibility ad placements on MSN, helping them reach new customers,” said David Carkeek, Principal PM Lead at Microsoft.

Baidu International launched MediaGo overseas advertising platform last year when it had established cooperation with Snapchat, Reddit, Pinterest, etc., which will provide a very good channel for China’s domestic small and medium-sized enterprise owners to promote overseas.

Mobile reach in Q1 2020: Tencent, Alibaba, Baidu, ByteDance

It connects the advertisers’ accounts with their WeChat Work (enterprise version of WeChat) accounts in order to better reach out to target groups and to increase customer management efficiency. This, in turn, can help improve customer services and conversion rates.

Making the connecting more efficient

The customer acquisition solution combining WeChat Advertising with WeChat Work can provide advertisers with tools for building landing pages, automatic deployment of multiple customer services and smart optimization.

These tools allow advertisers to acquire customers in a new way and significantly simplify the process of customer reach-out and acquisition. With these tools, advertisers can manage their traffic volume at a more granular level and maximize customer value.

Tools for Building Landing Pages

In order to help advertisers achieve high efficiency in reaching out and acquiring customers, new follow-widgets and pages for WeChat Work are added to the native promotion pages and landing pages.

In this way, WeChat users can quickly and easily follow the advertisers’ WeChat Work account. Advertisers can quickly achieve conversion and track their landing pages on WeChat Work based on the characteristics of the sector they are in.

Advertisers can monitor the number of their followers on their Tencent Ads back-end dashboard or WeChat Work in the process of advertising campaigns.

Automatic Deployment of Multiple Customer Service Staffs

This solution provides advertisers with the ability to automatically deploy customer service staff in order to make their services more efficient.

Advertisers can authorize WeChat Work via the Tool Box in the back-end. After authorization, they can add departments or employees within their organization to create customer service groups.

In the process of advertisement deployment, unique QR codes will be generated automatically for each customer service group. When the user scans the QR code, the system will automatically deploy a customer service staff within the group. The user can then enjoy 1-1 service after adding the operator as a friend on their WeChat.

Smart Optimization

With the new solution and oCPM bidding, it can help to optimize the “Follow WeChat Work customer service account” process, and in turn, can improve the conversion rates for customer acquisition.

Advertisers can rate the process and identify target groups that are more likely to follow, then optimize their advertisements with better conversions.

The new solution makes the process of customer acquisition significantly shorter and improves the conversion rate, allowing them to effectively lower the costs of customer acquisition.

In the meanwhile, the new process fully leverages on the connection between advertisers and users to build a direct communication channel between users and customer service operators. This can allow advertisers to offer users efficient, high-quality, and real-time services.

In addition, advertisers can achieve high-conversion and retain target users in their WeChat Work. These users can be reached and engaged again through WeChat Moments (WeChat’s social networking section) and community management (WeChat Group) in order to maximize their user value.

Currently, this solution supports an omnichannel deployment through WeChat Moments Ads, Official Account Ad, and Mini Program Ads.

Thanks to the 1.15 billion users, the highly efficient smart deployment technology, and the targeted reach ability, advertisers can retain users in their WeChat Work in a highly efficient way. They can then provide these users with more personalized professional service, increase the user value, and achieve business growth.

Helping eCommerce to Capture Long-term Value

With the increasing cost of traffic, the marketing-to-sales eCommerce business model starts to encounter its bottleneck. The difficulty to retain users, together with the long sales cycle for high premium products makes it very difficult to guide users with high-quality products and services in the long term.

Therefore, the operational advantage of being able to constantly increase user value proves to be of great value.

With the new process, users can follow the advertisers’ WeChat Work account and interact directly with customer service staff after seeing the ad, allowing higher effective and real-time services.

At the same time, advertisers can also introduce their products and content directly to users and keep them engaged. Combining with e-commerce promotions such as Double Eleven, advertisers can keep the push marketing content effective.

In addition, thanks to WeChat Work accounts’ ability to post on WeChat Moments, advertisers can timely update users on their products, professional knowledge, and maintain customer relationships in a non-intrusive way.

Targeting users with a certain level of knowledge on the products, advertisers can manage the community through groups in WeChat Work too.

In this way they can efficiently reach out to their customers afterward and provide them with more professional and customized services, therefore improving user engagement and increase their re-purchasing frequency.

Combining with the ability to connect to WeChat mini-programs, advertisers can integrate the online shopping function of the mini-programs into their WeChat Work, providing multiple service windows to customers.

A fashion brand ALFA has successfully reduced the time from acquisition to conversion and its user acquisition cost by 50% with the help of the new WeChat Advertising + WeChat Work solution.

At the same time, their operation efficiency increases significantly thanks to the integration of WeChat Moments and various promotional campaigns in WeChat community. Users in the WeChat groups are highly engaged and frequently re-purchase.

Helping the Travel Sector by Converting Target customers Online

Travel related products usually feature high price and long decision process. Its target customers have high conversion barriers and diverse needs. In order to boost conversion, advertisers from the travel sectors usually need 1-on-1 real-time communication to fulfill the customer’s different needs.

In the future, by converting offline customers online and integrating operation and management online, the travel sector can effectively benefit from this new solution.

In the new process, advertisers from the travel sector can exhibit their brands and promote their products on their native promotion page, in order to attract target customers and retain them on their WeChat Work accounts.

At the same time, with the personalized welcome display, advertisers can send useful content such as product information to their new users in a faster manner, encouraging better user engagement.

WeChat Work provides advertisers with a more convenient online communication tool, enabling real-time communication, and facilitating the delivery of personalized services.

Corporate images are clearer on the WeChat official account, effectively building trust and awareness of the brand. At the same time, advertisers can manage users based on various tags such as destination, travel time and wiliness, and provide users with more customized services.

They can also roll out different promotional information in the WeChat groups and constantly reach out and convert users, allowing a more granular service.

Yunnan Kunming Travel Agency, focusing on Leisure Family Trip, has significantly shortened leads engagement time and reduced their costs with the help of the new process and oCPM model.

Within the trial period, the cost of acquiring a new follower for WeChat Work is near the cost of their mature conversion funnels. In addition, it has profiled their users using tags and promoted limited time offers, group purchase offers in their WeChat groups in order to guide users and achieve better conversions.

With the help of WeChat group promotions, the deposit conversion rate increase by 60%.

The integration between WeChat Advertising and WeChat Work effectively could meet various advertisers’ needs, helping them shorten the acquisition path, reach out, and convert targeted audiences.

WeChat Work allows advertisers to get closer to their users and lower the conversion barrier. At the same time, WeChat Advertising helps advertisers to reach out, convert, and retain target users in multiple ways.

In 2019, mobile continues to lead China internet. The top mobile apps in China by total MAUs are still led by WeChat, Alipay, QQ, Taobao, iQiyi, and Tencent Video while TikTok continues fast growth and ranks the 7th. Tencent has the highest internet user penetration of 97.3% in China in September 2019, followed by Alibaba, Baidu, and ByteDance. Find a comparison of the four here.

Leading Chinese internet companies are building their own mini-program ecosystem; Tencent’s WeChat, Alibaba’s Alipay, and Baidu’s smart program in the leading positions. ByteDance’s also building on its own ecosystem on TikTok and Toutiao.

China has issued new regulations banning online video and audio providers from using artificial intelligence (AI) and virtual reality technologies to create fake news and content.

The shipment of China’s smartphone market was about 98.9 million units in Q3 2019, down 3.6% year-on-year. Huawei leads China’s smartphone market in Q3 2019 with 41.5 million units in shipment, an increase of 64.6% YoY. Vivo, Oppo, Xiaomi and Apple rank the second to the fifth.

Awareness of Chinese brands in international markets has declined over the past three years. The “Brand Power” of leading Chinese brands is up 15% year-on-year, compared with 5% growth last year. “Brand Power” is rising fastest in Japan, France, and Spain, representing emerging hubs of growth, according to the BrandZ™ Top 50 Chinese Brand Builders 2019 report.

Alibaba has been crowned the most valuable brand in China for the first time in the annual BrandZ™ Top 100 Most Valuable Chinese Brands ranking, having grown its brand value by 59% year-on-year to US$141 billion.

The total value of the Top 100 Most Valuable Chinese Brands increased by 30% to US$889.7 billion, the highest annual rise since the ranking launched in the year 2011.

By 2030, 58% of Chinese households are expected to be in or above the mass-affluent class, exceeding today’s 55% South Korean share according to McKinsey. Urban Chinese consumers’ spending profile converges with their counterparts’ spending profile in cities around the world.

Top articles on Chinese consumers include:

• Men’s beauty market in China looks to be more promising
• Chinese post-95s spent 80% more buying overseas
• Consumption habits of China’s post-90s generation
• 22 FMCG companies reaching over 100 million urban Chinese households in 2019
• China Generation Z overview 2019

Digital Media

Vlog has become the new theme of user growth competition on several video platforms in China. Vlog can be regarded as a kind of “video log” with popular themes of travel, food, pets and etc. Its production is relatively simple, the creator uses the camera to record what he sees and thinks in his daily life, and then through later editing, with music, text or stickers, can produce a Vlog.

China’s search engine companies’ revenue is estimated to reach 158.08 billion yuan (US$22.98 bn) in 2019 and 183.17 billion yuan (US$26.63 bn) next year. But Baidu fell to the third by digital advertising revenues following Alibaba and ByteDance.

Tencent launched several different social ads formats including the Nearby Ads for SME retailers on WeChat Moments.

China Social Media

As of Q3 2019, WeChat’s monthly active users reached 1.15 billion and Weibo’s were 497 million.

In 2019, the top rising social media is no doubt ByteDance’s short video leader TikTok. Short video penetration exceeded 70% in 2019 with 810 million active users in Sep.

WeChat launched its own version of “Facebook Stories”. WeChat launched two new sections -“Time Capsule” and “Top Stories”- and several news features for WeChat iOS 7.0 on December 21, 2018. That’s the biggest upgrade since version 6 four years ago and one big move into the short video market.

Xiaohongshu received most attention in 2018 but faced a rough year in 2019 with its app removed from every major app store” in July. It will launch live broadcasting feature next year. Read our latest insights on how Xiaohongshu successfully pivoted its growth and product strategies.

The most popular articles on social media:

1. Stories behind China’s super app WeChat, told by its founder
2. ByteDance: A Chinese Mobile App Factory
3. Audi used competitor Infiniti’s creative in a video ad on WeChat Moments
4. Top short video apps compared: Tik Tok vs. Kwai – Part 1 Platforms
5. China social media users compared: Weibo vs WeChat vs Momo

China E-commerce & Retail

Taobao, Tmall, and JD have the broadest user reach than other e-commerce platforms in China. Nevertheless, Pinduoduo is the only platform with more low education background users. Both Amazon and Dangdang are much less popular among users with middle school education or lower. Read our online shopper trends for 2019 here.

In 2019, Pinduoduo has beat JD and become the second-largest e-commerce platform in China. Meituan also did very well.

This year’s Tmall 618, there were hundreds of domestic and foreign brands whose sales exceeded last year’s Double 11, with the highest growth rate exceeding 40 times.

Alibaba set a new record of Double 11 in 2019 again with full-day sales on Tmall of 268.4 billion yuan (US$38 billion), the largest annual shopping festival in China. There were 299 brands who reached RMB 100 million in GMV, including Apple, Nike, Estee Lauder and Giorgio Armani. Find out the best-selling brands here.

The number of mobile payment users has reached a saturation point in 2019, and the growth is drawing to a close. The penetration rate is 95.1%. The annual transaction volume of third-party mobile payments reached 183.79 trillion Yuan, an increase of about 20.3% over the previous period. The annual number of transactions reached 1.17 trillion, an increase of about 12.8%.

Following the adoption and popularity of mobile payment, China supermarkets are growingly more intelligent with technologies such as face recognition, IA, AR, O2O, etc. WeChat recently shared a vision of its technology integration with supermarkets in the future.

Live Broadcast for E-Commerce

Live broadcasting has become an important channel for e-commerce sales in 2019 and will continue to grow. A total number of 81 live rooms on Taobao Live reached 100 million yuan sales; a total of 5 organizations broke 1 billion yuan sales. Taobao Live aims to deliver 500 billion yuan sales in the next three years.

Tencent launched a live broadcasting tool for WeChat Official Account (OA) in March 2019, currently supporting audio and video broadcast. Influencing WeChat OA can utilize their fanbase on WeChat, in combination with quality live broadcasts, to drive e-commerce sales.

Though still in the testing phase, Tencent Live integrates live streaming with its mini program. Brands can embed HTML5 based products on its mini program as an entry to its live streaming. Followers and fans can click to open Tencent Live to watch live streaming.

Kuaishou, also known as Kwai, announced its daily active live broadcasting users exceeded 100 million. 56% of Kuaishou anchors are post-90s.

Social E-commerce & Mini Programs

Social e-commerce GMV reached 626.85 billion yuan in 2018 with an increase of 255.8%. It’s expected to continue the fast growth and exceed 1.3 trillion yuan in 2019 and 2.86 trillion in 2021.

Social e-commerce in China has much higher conversion rates than traditional ones. Social e-commerce providers recharge their trust through social currency, which means that product recommendations from WeChat friends naturally have a social trust foundation.

The number of e-commerce transactions on WeChat mini-programs increased by 27 times year-on-year in the first half of 2019,

In Becky’s initial WeChat e-commerce mini-program launch in December 2017, the transactions exceeded one million yuan in 7 minutes and nearly 3 million yuan sales in 113 minutes according to WeChat Advertising. Since then, it has been able to maintain a million transactions in the first minute of new product launches. Read her story here.

Short Video for E-Commerce

TikTok signed a 7-billion yuan agreement with Taobao including 6 billion yuan ads and 1 billion yuan commission according to leaked news online. TikTok denied the accuracy of those numbers but the news got the attention of many in the e-commerce market.

During China’s mid-year shopping festival 618, active TikTok shopping cart user ratio exceeded 68%. The top 30 users referred over 400 million yuan worth of products sales.

Top articles in e-commerce and retail:

1. How Tmall played a vital role in China’slargest wool and textile enterprise
2. Taobao to enable farmers to find new markets and customers
3. Introduction to Xiaomi’s e-commerce platform Youpin
4. Alibaba’s Hema penetrating low-tier cities with Hema Mini supermarket
5. Huawei turning its smartphones to POS machines
6. China’s cross-border e-commerce users overview 2019

Chinese travelers

The total number of online travel agency (OTA) users in China reached 145.6 million. Tier-2 cities in total saw the most number of OTA users (56.68 million), followed by tier-3 group and tier-1.

On average an outbound Chinese tourist plans to spend US$6,706 traveling overseas in 2019, up 15% from 2018. Product quality became the second most important factor to consider when shopping abroad. 69% of outbound Chinese tourists made purchases on their mobile phones in 2018.

China’s emerging Gen-Y’s complete travel experience journey has five stages: dream, plan, book, experience, and share. Get an overview of emerging Gen-Ys’ power, how they re-shape China’s travel market, stages of their travel journey, and how to get ready here.

Sightseeing (around 50%) and vacation (over 40%) were the two main driving force for traveling. Self-guided travelers spend less compared with travelers with guided tours. Self-guided (free and easy trips) travelers spend more on transportation and accommodation than those with guided tours.

Top articles in tourism:

1. China Golden Week Tourism Trends & Insights 2019
2. The emerging Gen-Y for China’s travel market
3. Outbound Chinese tourists mobile payment usage 2019; average spend US$6,706
4. Rising outbound travelers from lower tier cities in China
5. China outbound tourism insights 2019

Annual subscribers can download McKinsey Consumer Trends Report 2020 here.

WeChat recently launched the “Nearby Ads” marketing solution to solve marketing problems of small and medium-sized merchants. Nearby Ads can accurately display the advertisements in WeChat Moments to reach customers within the 3km distance.

As one of the most frequent social scenes for consumers, WeChat Moments has become an important way for everyone to receive and share information, and the influence of acquaintances on consumers has become more apparent.

Related: Top Mini-Programs in Oct 2019

Through “Nearby Ads”, merchants can place advertisements in WeChat Moments and get social scene exposure.

Through “Nearby Ads”, merchants can place advertisements to users near the store, which can accurately cover potential visitors to the store within 3 kilometers away from the storefront, and meet the marketing demands of SMEs with small budget, low cost, simple operation and continuous traffic to the store.

If the number of people covered is small, the system will automatically expand to 5 km area around the store.

In other words, if you pass through a nearby business who has placed nearby ads, it’s highly likely that you’ll see its ads in WeChat Moments.

The program offers three packages, with a minimum of 2,000 yuan (about US$285) for 30 days, 5,000 yuan for 90 days, or 9,000 yuan for 180 days. Officials claim that the number of reached audiences in Beijing and Shanghai can exceed 25,000, over 35,000 in key cities, and over 70,000 in other cities.

The ad placement is easier than regular ads on Tencent social networks. Merchants can start advertising through the mobile phone “WeChat Ad Assistant” Mini Program. After the merchant has been verified, the advertisement can be created in just 3 steps, saving time and effort.

Tencent’s social media platform WeChat’s monthly active users grew to 1.15 billion as of Q3 2019.

3 popular models of social e-commerce in China

Average daily active users (“DAUs”) on Weibo were 216 million in September 2019, a net addition of approximately 21 million users year-over-year.

Weibo Financial Results in Q3 2019

For the third quarter of 2019, Weibo’s total net revenues were $467.8 million, an increase of 2% compared to $460.2 million for Q3 2018 according to its financial results.

Advertising and marketing revenues for the third quarter of 2019 were $412.5million, an increase of 1% compared to $409.3 million for the same period last year.

Advertising and marketing revenues from key accounts and small & medium-sized enterprises were $393.3 million, representing an increase of 3% compared to $380.7 million for the same period last year.

VAS revenues for the third quarter of 2019 were $55.3 million, an increase of 9% year-over-year compared to $50.9 million for the same period last year. The increase was mainly attributable to the revenues derived from Weibo live streaming business acquired in Q4 2018.

Costs and expenses for Q3 2019 totaled $295.2 million, compared to $298.2 million for Q3 2018. Non-GAAP costs and expenses were $277.5 million, compared to $272.2 million for Q3 2018.

Income from operations for the third quarter of 2019 was $172.5 million, compared to $162.0 million for the same period last year. Non-GAAP income from operations was $190.2 million, compared to $188.0 million for the same period last year.

Non-operating income for Q3 2019 was $5.3 million, compared to an income of $42.9 million for Q3 2018. The decrease was mainly due to the recognition of a $41.9 million investment related fair value mark to market gain in Q3 2018.

Income tax expenses for the third quarter were $31.4 million, compared to $37.9 million for the same period last year.

Net income attributable to Weibo for the third quarter of 2019 was $146.2 million, compared to $165.3 million for the same period last year.

Diluted net income per share attributable to Weibo for the third quarter of 2019 was $0.64, compared to $0.73 for the same period last year.

Non-GAAP net income attributable to Weibo for the third quarter of 2019 was $176.1 million, compared to $171.8 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for the third quarter of 2019 was $0.77, compared to $0.75 for the same period last year.

As of September 30, 2019, Weibo’s cash, cash equivalents and short-term investments totaled $2.37 billion. For the third quarter of 2019, cash provided by operating activities was $164.8 million, capital expenditures totaled $4.4 million, and depreciation and amortization expenses amounted to $6.3 million.

Audi launched its video ad campaign on WeChat Moments earlier today. What’s interesting is that the video played is an Infiniti ad.

Based on discussion from a WeChat Group of advertising professionals, Audi’s spending 30 million yuan working with Tencent Social Ads.

Tencent Ads has issued an apology and shared that the wrong ad creative launched at 9 am today was taken offline at 10:30 am. It was caused by an automobile service company’s careless mistake.

The ad generated 3,959 impressions with a total spend of 202 yuan according to Tencent. But the media coverage about this incident is growing; good news for both Audi and Infiniti.

Based on the provided figure, the CPM is roughly 51 yuan (US$7.2) and Audi’s campaign most likely targets lower-tier cities. As Beijing and Shanghai targeted video ads on WeChat Moments cost about 100-300 yuan on CPM.

And, some influencers are making fun of Audi on China’s social media, which drives more free coverage.

Shuangye, a Weibo influencer with over 1 million followers, published a post, “Audi is indeed a generous company, spending money in WeChat Moments for Infiniti China…”

Some companies are taking advantage of this incident, like Volvo:

#Audi Infiniti# has become a hot topic on Weibo with over 3.4 million views as of writing this post. But neither Audi nor Infiniti has responded yet. It’s a good opportunity for Audi to generate good awareness for its Q8 though the value from from the incident far exceeds Audi’s 200 yuan spent.

Fake fans and manipulations on China social media

Update: Infiniti responded in the evening via its Weibo account:

Weibo’s monthly active users (“MAUs”) reached 486 million in June 2019, a net addition of approximately 55 million users year-over-year. Mobile MAUs represented approximately 94% of MAUs.
Weibo average daily active users (“DAUs”) were 211 million in June 2019, a net addition of about 21 million users year-over-year according to Weibo’s official finance results.

Weibo net revenues increased 1% year-over-year to $431.8 million, representing an increase of 7% on a constant currency basis.

• Advertising and marketing revenues were $370.7 million, flattish year-over-year.
• Value-added service (“VAS”) revenues increased 8% year-over-year to $61.2 million.

Net income attributable to Weibo was $103.0 million, compared to $140.9 for the same period last year, and diluted net income per share was $0.46, compared to $0.62 for the same period last year. Non-GAAP net income attributable to Weibo was $156.4 million, and non-GAAP diluted net income per share was $0.68, both flat year-over-year.

Weibo Financial Results in Q2 2019

For Q2 2019, Weibo’s total net revenues were $431.8 million, an increase of 1% compared to $426.6 million for the same period last year.

Advertising and marketing revenues for the second quarter of 2019 were $370.7 million, compared to $369.9 million for the same period last year. Advertising and marketing revenues from small & medium-sized enterprises (“SMEs”) and key accounts (“KAs”) were $346.5 million, representing an increase of 2% compared to $338.7 million for Q2 2018.

VAS revenues for Q2 2019 were $61.2 million, an increase of 8% year-over-year compared to $56.6 million for the same period last year. The increase was mainly attributable to the revenues derived from the live streaming business acquired in Q4 2018, and was partially offset by the decrease in gaming revenues.

Costs and expenses totaled $280.6 million in Q2 2019, compared to $271.7 million for the same period last year. Non-GAAP costs and expenses were $265.6 million, compared to $259.3 million for the same period last year.

Income from operations for Q2 2019 was $151.3 million, compared to $154.9 million for Q2 2018. Non-GAAP income from operations was $166.2 million, compared to $167.3 million in Q2 2018.

Non-operating loss for Q2 2019 was $24.0 million, compared to an income of $10.9 million for the same period last year. The non-operating loss included investment-related impairment of $31.7 million, which is excluded under non-GAAP measures.

Income tax expenses for Q2 were $26.1million, compared to $25.1 million for the same period last year.

Net income attributable to Weibo for Q2 2019 was $103.0 million, compared to $140.9 million for the same period last year.

Diluted net income per share attributable to Weibo for the second quarter of 2019 was $0.46, compared to $0.62 for the same period last year. Non-GAAP net income attributable to Weibo for the second quarter of 2019 was $156.4 million, compared to $156.1 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for Q2 2019 was $0.68, compared to $0.68 for Q2 2018.

As of June 30, 2019, Weibo’s cash, cash equivalents, and short-term investments totaled $1.56 billion. For the second quarter of 2019, cash provided by operating activities was $132.8 million, capital expenditures totaled $3.2 million, and depreciation and amortization expenses amounted to $6.7 million.

For the third quarter of 2019, Weibo estimates its net revenues to increase 6% year-over-year to 9% year over year on a constant currency basis. This forecast reflects Weibo’s current and preliminary view, which is subject to change.

WeChat MAU up 7% to 1.13 million in Q2 2019; QQ MAU 808 mn

The revenues of China’s short video market grew by over 7 times to 46.7 billion yuan (US$6.6 bn) in 2018. It’s expected to continue the fast growth and exceed 100 billion yuan (US$14.16 bn) in 2019 and 211 billion yuan (US$29.87 bn) by 2021.

The advertising revenues of China’s short video market reached 18.8 billion yuan in 2018 with an increase of 733% YoY, accounting for over 40% of total revenues in this market. It’s expected to exceed 100 billion yuan (US$14.6 bn) by 2021.

Short video apps are among the most accessed daily apps in China. Its growth in MAU remains strong. As of Jun 2019, this market saw 95.44 million new MAU, compared to 72.12 million MAU in Jun 2018. New user growth was driven by tier-3, tier-4 35 y-o and above users. Learn how Kwai (Kuaishou) grew its DAU by 50 million in 4 months here.
Log in below or subscribe here to see the top short-video mobile apps.

Top short video apps compared: Tik Tok vs. Kwai – Part 1 Platforms, Part 2

The revenues of Chinese search engine companies were estimated to reach 135.76 billion yuan (US$19.74 bn) in 2018, with an increase of 20.8% YoY according to iResearch.

China’s search engine companies revenue is estimated to reach 158.08 billion yuan (US$22.98 bn) in 2019 and 183.17 billion yuan (US$26.63 bn) next year.

Newsfeed advertising has become another revenue driver for China’s search engines in recent years. Check out top newsfeed advertising platforms in China here.

iResearch forecasts that the growth-driving effect of news feed advertising on the revenue of search engine companies will be increasingly obvious in the following two to three years.

China is to see internet advertising market exceed over US$90 billion by 2019, over 80% of which is from mobile advertising. The US$36.02 billion native advertising market accounted for nearly 50% of the total in 2018.

71% of digital ad spending in China will be traded programmatically by 2019. The internet giants BAT controlled around 80% of programmatic buying.

Also read: Top short video apps compared: Tik Tok vs. Kwai

Data-driven, social media and omnichannel are the focuses of digital marketing growth for luxury brands, while “young”, “geographic concentration” and “social” are the keywords that best describe the trend of luxury brand marketing in China.

A recent report, jointly published by Tencent Advertising and Boston Consulting Group, revealed three major pain points for luxury brand marketing in China:

• how to better reach out to customers
• how to better increase customer loyalty
• how to better use data assets to drive business growth.

Luxury marketing in China: Young, geographic concentration and social are the keywords that describe the future trend

In 2018, China’s luxury market exceeded 110 billion Euros while maintaining a growth rate of 6%, accounting for 33% of the global luxury market. It is expected to grow at a CAGR (compound annual growth rate) of 5-6% in the future and to contribute over 40% of the global luxury retail sales by 2025.

It is an indisputable fact that China has become the most important market for luxury brands. The report shows that this growth is mainly driven by three major trends of Chinese consumers:

• luxury consumers continue to be young
• Geographically, the majority of luxury consumers are from the top 50 cities
• Social media influence remains strong

The report reveals that luxury consumers are becoming younger. Consumers aged between 26-35 y-o contribute 62% of luxury sales and consumers between 18-25 y-o contribute 12%.

Geographically, the majority of luxury consumers are from the Top 50 cities: At the same time, luxury consumption has become more widespread in China and shows an apparent trend of geographic concentration.

High-end luxury consumption has gradually penetrated into second-tier cities. Luxury consumers in the first and second-tier cities account for around 70% of the total number and contribute over 70% of total sales.

Currently, domestic luxury consumers from first and second-tier cities tend to travel abroad to buy high-end luxury goods while due to a limited number of local luxury shops, luxury consumers from third & fourth-tier cities tend to make their purchase in the first & second-tier cities. Therefore, how to use digital channels to manage retained customer assets will be one of the focuses in the future.

Social media influence remains strong. Because of the ubiquity of mobile social media in China, Chinese consumers have also demonstrated strong social orientation when making luxury consumption decisions. More than 80% of Chinese consumers choose the “rational” way of researching online and purchasing offline when buying luxury goods, far above the global average.

The core channels influencing Chinese luxury consumers’ purchase decisions are shifting towards high digitalization. The social media penetration rate is now as high as 67%. Luxury brands can, through social media platforms, better reach out to their target customers, attract and influence the younger generation of core consumers with customized contents.

For luxury brands, the key to growth is to know how to better leverage social media platforms and to achieve a tight online-offline connection in order to form closer relationships with their customers.

Pain point 1: How to leverage social media and reach out to customers

According to the report, customers spend a significant amount of time on social media platforms and contents, and at the same time, KOLs’ endorsement has a very significant influence on their purchasing decisions.

Therefore, how to leverage on social media has become a critical topic that luxury brands need to think about.

Kiki Fan, General Manager of Tencent Advertising’s Key Account Sales and Operation Department, shared the new idea of leveraging on social media with Tencent’s Smart Marketing Solutions:

“…no longer focus on a single social media platform, but use a more global perspective, connect users with all touching points through four major traffic channels, and make social media the key to generating traffic.”

First, the brands must have their own traffic. Currently, an increasing number of luxury brands have set up their own WeChat official accounts, mini-programs, and other tools in the WeChat ecosystem.

Because of the unique characteristics of luxury brand marketing, proprietary channels can best present the brand image and allow them to position most precisely in order to achieve in-depth interaction with their customers, which is also the best way to retain and accumulate loyal customers.

The social media traffic is in turn generated from fission marketing as well as voucher campaigns initiated by the brands. In this way, they can acquire traffic from the social behaviors of their customers within the WeChat ecosystem.

This approach can maximize the social energy of WeChat and help achieve exponential traffic growth. In the end, this traffic can still be directed to the brand’s own channels such as their mini-programs in order to build a true marketing closed loop.

The report shows that researching online and purchasing offline is the main way Chinese consumers make their luxury purchases.

Tencent’s Smart Marketing & Smart Retail Solutions offers a series of tools to allow brands to convert their offline traffic into online traffic and integrate the two. This can help them convert their traffics in offline shops and from shopping guides into direct sales.

The advertising traffic provided by Tencent Advertising, as paid traffic, can be an amplifier for brand marketing campaigns, enabling a wider range of customer connections under diversified contexts of the Tencent platform.

A number of luxury brands, including Cartier, Bulgari, and Gucci, are experimenting with these four traffic solutions provided by Tencent to effectively expand their customer base and realize growth.

Pain point 2: How to better improve customer loyalty

According to the report, among the current online purchase channels, proprietary channels are emerging and account for over 30%. Brand-managed mini-programs and WeChat public accounts became the fastest growing channels last year.

This phenomenon is closely related to the unique characteristics of the luxury industry. For luxury brands, their customers expect the same shopping experience online as in offline boutiques. Therefore, for luxury brands, the key to realizing future growth breakthrough is to build proprietary platforms in an asset-light fashion that can interpret their brand image and help them build a tighter relationship with their customers.

Kiki Fan stated that: “Tencent Advertising provides the Brand 2.0 model for luxury brands. With mini-programs as the core, we can help brands establish and operate their proprietary sales channels on WeChat mini-programs and help them achieve closed-loop marketing throughout the chain.”

Brand 2.0 does not only allow brands to establish their proprietary sales channels in an asset-light way through mini-programs and mobile payment but also enables them to offer consumers a richer shopping experience through the social media platform of WeChat.

Online mini-programs can provide brands with long-term online boutiques as a non-stop sales channel. It can also be used as the ground for pop-up shops as the brand’s online marketing campaign.

Tiffany launched its limited edition product line in its pop-up shop mini program during the 520 period (20 May, Chinese Lovers’ Day), and achieve efficient sales conversion with the help of advertising campaign in WeChat’s social sharing channel Moments and injection of social media traffic.

At the same time, on their proprietary channels, brands can deepen the emotional connection with consumers through collaboration with IPs or KOLs, or by creating customized contents that attract consumers.

On these channels, brands can communicate with consumers effectively, and by using the Tencent Smart Advertising tools to analyze and manage collected data, service their consumers more precisely, create their own CRM and in turn increase their brand loyalty.

Pain point 3: How to achieve business growth leveraging on data assets

In the past, the communication and marketing of luxury brands relied mainly on creating emotional resonance with and conveying brand values to consumers.

In a highly competitive market environment, how to collect and retain consumer data from the four major channels and convert it into business and strategic insights in order to drive growth has become the third biggest pain point. Tencent Think Tank can effectively address this pain point and help brands explore potential growth opportunities.

Thanks to its accumulation of data insights over the years, collaboration with third-party partners, and excellent multi-dimension strategy development capabilities, Tencent can help brands match target consumers as well as potential consumers through its Data Think Tank, provide advertisers with many options of group combinations and expansion models.

With Model LAB’s more intelligent customizable model, flexible targeting, positive-negative target sample comparison functions, and machine learning training models, Tencent help advertisers precisely target group combinations, optimize marketing budget allocation, increase client base expansion capability and ultimately boost conversion throughout the entire chain, according to the report.

This is like providing luxury brands with a compass on the sea and help them effectively reduce the time spent seeking growth in China.

For luxury brands, China still has huge prospects and potentials to be explored in the future.

“Data capability is the foundation of growth for luxury brands, and is the basis on which marketing strategies should be developed.” Kiki Fan said.

She states that thanks to Tencent’s Data Think Tank’s multi-dimensional insight and strategy development capabilities, brand data assets collection and analytic capabilities, and the one-click marketing applications, luxury brands can obtain 360-degree portraits of their consumers at different stages of the consumption cycle and truly understand them.

This can allow them to identify key loss/conversion nodes in the consumer decision path, and to understand the relationship between audiences and advertising. Brands can then develop a more optimized and effective marketing strategy in order to capture the business opportunities and achieve growth brought by China’s 820 million mobile Internet users.

Tencent’s total revenues in Q1 2019 were RMB85,465 million (USD12,693 million), an increase of 16% over the first quarter of 2018 according to Tencent’s announced financial results.

Its revenues from VAS increased by 4% to RMB48,974 million for the first quarter of 2019 on a year-on-year basis. Online games revenues were RMB28,513 million, broadly stable compared to the first quarter of 2018. Social networks revenues grew by 13% to RMB20,461 million.

Revenues from FinTech and Business Services increased by 44% to RMB21,789 million for Q1 2019 on a year-on-year basis. The increase was mainly driven by greater revenues from its commercial payment and cloud services.

Revenues from online advertising increased by 25% to RMB13,377 million for the first quarter of 2019 on a year-on-year basis. Social and other advertising revenues increased by 34% to RMB9,898 million, mainly due to the increase in advertising revenues derived from WeChat Moments, Mini-Programs and QQ KanDian.

Mr. Ma Huateng, Chairman and CEO of Tencent, said,

In the first quarter of 2019, we sustained healthy user engagement across our key platforms, with notable growth in the number of short videos uploaded and shared by users on QQ and WeChat.

We are invigorating our game business with popular releases such as Perfect World Mobile in China, while PUBG MOBILE is growing internationally.

Our payment, other FinTech services and cloud business, while still at an early stage of expansion, are now generating substantial revenues, and we are consequently disclosing their results in our new FinTech and Business Services segment, demonstrating our success in organically incubating services with long-term growth potential.

Its operating profit was RMB36,742 million (USD5,457 million), an increase of 20% YoY. Operating margin increased to 43% from 42% last year. Profit for the period was RMB27,856 million (USD4,137 million), an increase of 16% YoY. Net margin was flat at 33%.

Profit attributable to equity holders of the Company for the quarter was RMB27,210 million (USD4,041 million), an increase of 17% YoY.

Basic earnings per share were RMB2.877. Diluted earnings per share were RMB2.844. On a non-GAAP2 basis, which excludes certain non-cash items and certain impact of M&A transactions:

• Operating profit was RMB28,470 million (USD4,228 million), an increase of 13% YoY. Operating margin decreased to 33% from 34% last year.
• Profit for the period was RMB21,673 million (USD3,219 million), an increase of 13% YoY. Net margin decreased to 25% from 26% last year.
• Profit attributable to equity holders of the Company for the period was RMB20,930 million (USD3,108 million), an increase of 14% YoY.
• Basic earnings per share were RMB2.213. Diluted earnings per share were RMB2.187.

Social Media

During the first quarter of 2019, combined MAU of Weixin and WeChat was 1,112 million, up 6.9% year-on-year.

Smart device MAU of QQ slightly increased year-on-year and exceeded 700 million in the first quarter. Young users became more engaged on the QQ platform and their MAU grew by a double-digit rate year-on-year.

China Internet users are increasingly utilizing WeChat and QQ’s in-app camera functions to record short videos, which they then share in one-to-one chats, group chats, and timeline formats. Users now upload hundreds of millions of videos each day to Tencent’s communications and social platforms, which Tencent believe are the leading venues in China for uploading and viewing such user-created videos.

Tencent launched Mobile QQ Version 8.0 with engaging features such as QQ Mini Programs and KuoLie, which recommends new friends to young QQ users based on similar interests.

In WeChat, Tencent enabled users to share information, products and services for different vertical categories of Mini Programs within their chat groups, facilitating activities such as group buying for local communities, and the active user base for non-game Mini-Programs continued to grow at a healthy rate.

Online Video

Tencent Video subscriptions increased 43% year-on-year to 89.0 million, driven by popular self-commissioned IP content, such as Candle in the Tomb Season 3; Heaven Sword, Dragon Sabre (based on the popular martial arts novel by Louis Cha); and The Land of Warriors Season 2.

Tencent Video subscription counts were broadly stable sequentially due to delays in airing certain drama series, which might otherwise have contributed more to subscriber growth.

To further engage with video viewers, WeiShi launched a new feature for Produce 101 Season 2, enabling users to vote for contestants and share related short videos with their WeChat and QQ friends.

Continue to read Q1 summary on JD and Alibaba.

Google received a strong revenue growth of over 60% in China last year to US$3 billion. It led Google to expand its advertising sales team there, according to the report from The Information.

ByteDance who spent over US$300 million on overseas adverting to promote Tik Tok was reported to be one of Google’s biggest advertisements buyers. Alibaba was one of them who also spent a lot for Alipay and cloud computing business.

Also read: 71.1% Weibo’s Miaopai users have a high purchasing power

Google also tries to attract small-sized enterprises besides the big ones. Its advertising team working to serve small-sized customers increased by two-fold to around 200 persons in the past year.

Currently, Google has over 20 advertising centers in China where advertisers are able to see how their ads perform in the search, e-mail, and other platforms of Google. Be it a technology giant or small companies, considering the sluggish user growth, they make the same choice to seek new revenue sources from the global market. Thus, some global advertising platforms such as Google, Facebook, and Amazon have become their best choice to promote products and services overseas.

Facebook generated US$26.49 billion in ads sales from the US and Canada market. By comparison, revenue derived from advertising sales in China was between US$5 billion and US$7 billion.

The large advertising expenses got paid as Tik Tok taking the first spot of the top 20 most downloaded video/live streaming apps list in January 2019 with nearly 75 million downloads from App Store and Google Play overseas. The figure roughly summed that of the players ranked from the second to the eighth position, according to the data from Sensor Tower.

Top brands in China by advertising spend in 2018

CCTV’s Spring Festival Gala, or Chunwan, is a Chinese New Year special produced by China Central Television (CCTV) shown on the eve of Chinese New Year on its TV channels. CCTV now requires mobile app advertisers with daily active users of at least 100 million. Otherwise, the server would crash upon broadcasting the advertisement.

We all know now how huge and crazy China’s Double 11 shopping festival could be. Yet, after upgrading the servers’ capacity by 3 times based on Double 11 traffic last year, Taobao’s servers couldn’t avoid downtime being the advertiser of Spring Festival Gala 2018.

This year, Baidu gave away 1.2 billion yuan worth of hongbao on CCTV Spring Festival Gala, which crashed the app stores of Xiaomi and Huawei according to Netease News. In this 4.6 hours’ CCTV live broadcasting, Baidu App saw 20.8 billion user engagements with hongbao from 300 million daily active users. It sent 10 million 20.19-yuan hongbao, 1 million 88-yuan hongbao, 100 thousand Baidu AI speakers, etc.

CCTV has different advertising packages for this show. The 10-second midnight time broadcasting auction ad is one of them, which cost 6.8 million yuan in 2005 and 57.2 billion yuan after 6 years. Advertising on CCTV Spring Festival Gala show costs more year after year, going in the opposite direction of its audience ratings. The estimated total ad revenues in 2019 are 1.5 billion yuan (US$222 million).

The ratings maintained above 30% between 2001 and 2017 according to CSM (CVSC-SOFRES MEDIA). Many have got the feeling more people in China participate in Double 11 shopping festival compared with those watching this gala show. But, the opposite is true.

In the 1980s, the main sponsors of the Gala Show were watches, bicycles, and sewing machines. In the 1990s, it was almost the world of home appliances and Chinese liquor such as Confucian Family Mansion Jiajiu (Kongfu Yanjiu) and Gujing Gong. The former became a national brand after advertising on CCTV. And, Gujing Gong’s net profit grew to 1.26 billion yuan in 2018 from 830 million yuan in 2016 advertising on CCTV Spring Festival Gala for 3 consecutive years.

Before 2010, medical health, home appliances, and FMCG dominated the Spring Festival Gala advertising. Beginning in 2015, Internet companies have entered and taken turns. Tencent’s WeChat collaborated with CCTV in 2015 during Chinese Spring Festival Gala 2015 giving away 500 million yuan cash hongbao and 3 billion coupon hongbao. Its WeChat Pay users grew to over 300 million from less than 8 million.

How China’s short video app Kuaishou grew its DAU by 40M in 5 months

71% of digital ad spending in China will be traded programmatically by 2019. The internet giants BAT controlled around 80% of programmatic buying.

The programmatic digital display ad spending in China was expected to grow by 33.1% to 208.55 billion yuan (US$30.86bn) by 2019, accounting for 71% of overall spending on the digital display ad. The portion is to hit 75% by 2020, according to the report from eMarketer.

Currently, around 80% of digital display ad spending traded programmatically via the so-called BAT companies Tencent, Alibaba, and Baidu. However, the status quo could be changed as more and more small and medium-sized companies start to establish their own platforms for programmatic buying.

Quick Look: Marketing in China 2019

The digital video ad, especially the short video, has greatly pushed advertisers to place ads in programmatic. 2019 is estimated to see 50%, or 44.64 billion yuan (US$6.6bn) of digital video ad spending transacted programmatically.

Though China’s ad spending in programmatic still lagged behind that of the U.S., the gap has been narrowed. By comparison, the programmatic digital display ad spending in the U.S. is going to increase by more than 21% to US$57.35bn by 2019, representing 84.5% of total digital display ad spending.

Top newsfeed advertising platforms in China

The number of China internet users exceeded 801 million with a penetration rate of 57.7% according to the latest data from CNNIC. Live broadcasting, short videos, and personalized content will continue to be essential parts of digital marketing strategies in 2019.

1. User Attention Highly Distracted

On average, each user installs 44.2 mobile apps in China as of Q2 2018. Fifty-nine apps have exceeded 100 million user base. The number of WeChat Official Accounts is over 3.5 million according to data from iResearch.

2. Increased Difficulty in Competition

The Chinese population has been more diverse with multiple segmentations including Gen-Z, post-90s (people born in and after 1990 and before 2000), new middle-class, the town youth (those living in tier-3 and lower tier cities between 18 and 30 years old), etc.

80% of marketing resources are in the hands of the top 20%.

3. Rising News Feed Advertisement

China’s online advertising revenues are estimated to reach 491.4 billion yuan with a growth rate of 31%, which is about one-tenth of China’s internet economy (4.73 trillion yuan) according to iResearch.

Mobile advertising accounts for about 70% of China’s online advertising market and is estimated to increase to 77.6% in 2018 and 82.8% in 2019.

Mobile news feed ads grow further this year accounting for nearly 24% of the total, compared with search 31.7%, e-commerce ads 19.5%, and 11.4% from display ads.

China’s native ads market totals 242 billion yuan in 2018 based on iResearch’s estimate, accounting for 49.2% of the entire online ads market with strong growth of 40.9%. It’s estimated to further grow to 53.5% in 2019.

4. More Diverse Marketing Channels

The growth and development of online videos, news, live broadcasting, OTT, and online marketing have led to multiple advertisement formats. Search remains a critical channel on desktop while social and videos play an important role on mobile.

Online video ads market is now worth 45.93 billion yuan; OTT over 4 billion yuan; news ads 42.47 billion yuan; and, online live broadcast marketing 3.4 billion yuan.

Many marketers have seen and enjoyed the power of content marketing and social media marketing in 2018, either following and utilizing the trending topics or making new ones. Mobile apps in short video market worth your attention are Kuaishou, Tik Tok (Douyin), and Miaopai.

Verified organization accounts (companies, government agencies, and media) on Tik Tok exceeded 12 thousand. Short video has seen massive adoptions by marketers in China as one of the essential online marketing channels.

The e-commerce giants Taobao, Tmall, and JD.com have cooperated with at least 10 short video platforms so far. The video view of short video at Taobao and Tmall exceed 100 million, closely followed by JD.com.

5. Influencer marketing

More online celebrities may emerge and some can have a high impact on driving brand awareness and sales, especially in social and live broadcasting e-commerce. Many brands would increase their investment in key opinion leaders (KOL) in 2019, who often create very relevant and quality content.

6. Technologies

The adoption of AI has increased the efficiency of China’s marketing industry by 20% according to iResearch. Advertisers and marketers’ adoption of technologies will extend from adtech to martech. IoT could potentially enhance the user experience. And, advanced speech and facial recognition, AR, and VR will drive higher engagement and deliver better user experiences.

7. More Personalized Social Content

Top technology companies in China, such as Alibaba, Tencent, Baidu, and JD, has been tracking integrating various channels and delivering to users more personalized content. WeChat’s recent update also shows Tencent’s efforts in personalized and social content.

Read more: China mobile short-video app market 2018; Tik Tok vs. Kuaishou

China ad market generated 700 billion yuan (US$101.25 bn) in revenues with online advertising accounting for around 50%. The mobile advertising was a 254.96 billion yuan (US$36.88 bn) market in 2017, representing roughly 70% of overall online advertising. News feed ads are gaining popularity.

China’s online ad market totaled 375.01 billion yuan (US$54.24 bn) in 2017, a 30% increase year-on-year. This figure is expected to reach 491.4 billion yuan (US$71.08 bn) with a growth rate of 31% by the end of 2018.

Mobile advertising’ booming attributed a lot to the fast-growth of mobile internet. The mobile advertising was a 254.96 billion yuan (US$36.88 bn) market in 2017, representing roughly 70% of overall online advertising.

Check out detailed forecast of China’s search market here or online ads market here from 2018-2020 including e-commerce ads, online video ads, e-commerce ads, newsfeed ads, and etc.

Traditional out-of-home advertising showed a downtrend in spending in China. Both real estate and construction industry reduced out-of-home ad spending by 37.1% year-on-year. Xiaomi, Ele.me, KFC, and Didi were among the top ad buyers. 

Xiaomi spent more on out-of-home advertising in July to promote its new model MAX 3 and thus topped the ranking with a high growth of over 1,000% in spending from just 91st a year ago.

Overall, spending on elevator TV advertising increased compared with the previous year. Alcoholic beverage industry saw expenditure skyrocket to 6,917.8%.

Ele.me still was the biggest buyer though its spending reduced by 10.3%. KFC and Mengniu took the next two places by a spending growth at 198.9% and 88.5% respectively. Didi made the highest jump from 61st to 8th with a growth of over 1,000% in spending.

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Check out China advertising market overview; top advertisers in H1 2018 here