Nowadays, the Chinese internet system is extremely developed: at the end of 2022, China counted more than 1 billion users and a 76.5% of internet penetration rate. Therefore, there is plenty of room for improvement in any aspect of the digital life. People tend to navigate longer on Chinese internet platforms, especially with their phones. As it is highlighted in the “50th statistical report on China’s internet development”, published in august 2022 and conducted by CNNIC (China Internet Network Information Centre), users spend more than 29.5 hours a week on the internet. Furthermore, smartphone is the privileged device, because out of all the Chinese netizens, 99.6% of them uses their mobile phone to navigate on the internet. With such a user base, networks like the Chinese streaming platforms are flourishing: only in 2021, it was estimated that this sector generated a revenue of more than 131 billion RMB, and it’s increasing year-on-year. The usage of video streaming platforms also highlights their popularity among Chinese consumers, having about 96.5% of them who watched online videos in 2022.
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Although the attention is shifting to short-video apps, streaming platforms aren’t dead yet
Short-video apps have gained significant popularity in the Chinese market, attracting over 1 billion users in 2022 alone. These apps have become a dominant force, with users spending an average of 2.5 hours per day immersed in their content. The trend is particularly prominent among the younger generation, especially Gen Z, who are embracing short videos as a preferred form of entertainment and communication.
However, the life of long video platforms hasn’t ended. In fact, businesses can still benefit from promoting their products and services on Chinese traditional video platforms. First of all, longer videos allow storytelling to establish a sounder emotional relationship with customers and communicate brand values. Indeed, while short video ads enhance brand awareness, long videos improve brand perception.
Secondly, traditional platforms are perfect for high-quality informational videos where users can find out more about the products. Moreover, long videos are becoming a synonym of high-quality content and as the online video streaming universe gets more users, quality content is essential to stand out.
Analysis of the three biggest Chinese video streaming platforms
With more than 530 million MAUs in Q4 2022, iQiyi is one of the largest video streaming platforms in the world. According to their annual report, in the same year they managed to reach 103.1 million paying subscribers, an increase of 4.4% since 2021. The app is particularly known to employ a massive use of sophisticated tools, such as artificial intelligence and big data analytics.
The platform is also pushing on Research and Development, with expenses reaching 466 million RMB in 2022, a 39% increase compared to the previous year. For a couple of years now, iQiyi tried many methods to raise the interest of its users and grabbing the attention of the new ones. After having successfully launched its first interactive video advertisement in 2019, iQiyi, in collaboration with actress Xiaoqi Ai (艾晓琪), organized an exciting treasure hunt across China throughout July 2023. Participants were tasked with taking photos of as many iQiyi billboards as possible, and the winner of the competition will be gifted with autographed merchandise and discount cards for future iQiyi subscriptions. The hunt began on July 7th and will continue until July 31st, when the winner will be announced.
2. Tencent Video
Launched in 2011, Tencent Video (腾讯视频) is one of the Chinese top 3 video streaming platforms in terms of MAUs. The app managed to collect more than 120 million active paying subscribers in Q3 2022. Tencent has been created to offer a wide variety of content to its users, including videos, movies, documentaries, and sport events. Smartphones represent the main device in which users tend to watch Tencent Video: as of March 2022, the platform had over 1.2 billion mobile monthly active users.
Gen-Z and Millennial women living in low-tier cities account for more than half of Tencent Video’s users. Maybe that is the reason why Tencent decided to target low-tier cities with a brand new streaming platform called Pianduoduo (not to be confused with e-commerce platform Pinduoduo). The company announced that such video platform would provide users with movies and TV series for free without any advertising. Moreover, users will earn “gold coins” convertible into RMB for time spent watching video content on Pinduoduo.
Founded in March 2003 and owned by Alibaba, Youku has the label of “Chinese YouTube” and, along with Tencent Video and iQiyi, is one of the leading Chinese video streaming service providers. The app was originally independent, but went under Alibaba in 2016 when the Chinese group offered 5.1 billion USD to buy the platform. As of March 2022, the app recorded over 247 million MAUs, and accumulated 38 million visits with an average duration of more than 5 minutes in June of the same year. Despite its popularity, Youku users’ retention rate is lower than its competitors: in Q3 2022, the retention rate of iQiyi was 54.7%, whereas Youku was at 20.5%. Youku users are usually focusing on news, videogames and electronics. Even if the number of its subscribers does not rise as fast as that of Tencent Video and iQiyi, Youku remains one of the most popular and widespread video streaming platforms in China and businesses should take it into account when planning their marketing strategy.
Bilibili was founded in 2009 as a community and video platform where sharing Japanese anime’s pictures and videos, drawing inspiration from Niconico, one of Japan’s largest video-sharing websites. In the span of 12 years, the company gradually developed, expanding its business into advertising, mobile gaming, e-commerce, live streaming, and launching a premium subscription plan which grant access to previews, special offers, and high-quality content.
Bilibili used to be the fastest growing streaming platform in China, with a stunning 60% increase in revenue from 2020 to 2021. Now, this grow has stopped, and the 2022 platform income increased only by 4% since the previous year, reaching 326 million MAUs and more than 28 million paying users.
Once mobile game represented the main source of revenue for the Shanghai-based platform, but now value-added services (such as premium subscriptions and live broadcasting services) hold the lion’s share, accounting for 40% of its net turnover in 2022. Bilibili’s success is partly due to its ability to build up an engaged and connected community through restricting membership to passionate and kindred users, allowing members to share their impressions directly on the videos, and fostering user-generated content. Furthermore, since April 2019, users can easily purchase advertised products by entering Bilibili’s mini programs.
Chinese video streaming platforms may yet bear valuable fruit
- Although nowadays live streaming and short video APPs attract the lion share of national internet users, companies can still rely on traditional video streaming platforms to establish sounder emotional relations with Chinese consumers and improve brand perception.
- iQiyi is one of the largest video streaming platforms in the world and it stands out for its technologically sophisticated tools, such as artificial intelligence (AI) and big data analytics. The big July’s treasure hunt across China is an example of the innovations which the app can bring.
- Tencent Video is one of the biggest streaming platforms in China, boasting a year-on-year increase of its MAUs and subscribers. Now, the app is focusing more on lower-tier cities, taking advantage of their ever-increasing economic and demographic growth.
- Youku is one of the pioneers and a major player in China’s online video market. Even if it does not perform as well as iQiyi and Tencent Video, the platform hangs in there and it still boasts millions of monthly visitors.
- Bilibili was one of the fastest-growing and best-performing Chinese video streaming platforms. Mobile games represented its biggest form of revenue, now overtaken by value-added services.
Author: Lorenzo Linguerri