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Why Asia will (continue to) dominate the mobile Web - from now on, it's not just about Japan

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Posted by mobiThinking - 16 Apr 2010
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There are two reasons why Asia is the most fascinating part of the world for mobile (anyone disagree with that premise?). First, there's the really advanced mobile markets spearheaded by Japan (but also South Korea, Singapore, Hong Kong etc), that set all the precedents that Western nations follow. Second, there are the developing nations that have a) huge and growing populations; and b) have low PC penetration, so mobile will inevitably become the primary way that people access the Internet and many services (that they haven't been able to previously) and connect with brands.

Today it’s the facts and stats from Asia's developed nations that keep mobile followers in the West entranced (and we still have so much to learn from Japan - see the Mobile Guide to Japan), but in the not-to-distant future our attention will shift, as Asia's developing nations, led by China (where mobile Web is already extremely healthy), embrace mobile and the numbers start to snowball (we expand on this below), as consumers and providers (brands, publishers etc) adopt the medium.

As the Mobile Marketing Association kicks off the Asia conference season with Mobile Marketing Forum in Singapore this week, swiftly followed by MobileSquared Roadshow and Mobile Financial Services (mobiThinking readers get discounts for all these events); we bring you two inspiring interviews from two members of the MMA's Asia board Marco Gavin, Procter & Gamble's mobile marketing lead in Asia and Barney Loehnis, OgilvyOne's new head of digital in Asia Pacific; and this, mobiThinking's analysis of the latest statistics.

P.S. (19-04-10) Thanks to Tsahi Levent-Levi from VoIP survivor for including this post in the latest Carnival of the Mobilists, a weekly roundup of the best in mobile and wireless blogs.

Why mobile Web in Asia will snowball:

1. Size
Asia is the most populous continent with the biggest nations. China (world population rank: 1) and India (2) have populations of over a billion and are respectively four times and three times larger than the third largest nation USA. Indonesia (4), Pakistan (6), Bangladesh (7), Russia (9) and Japan (10) are also in the top 10.
There are already far more mobile subscriptions in China and India than there are people in the US. eMarketer predicts there will be more mobile Internet users in China at the end of 2010 than there are people in the US.

2. Low PC Internet in developing nations.
Internet usage in China in 2009 was 28.7 percent; India, 7 percent; Indonesia, 12.5 percent; Pakistan, 10.6 percent; Bangladesh, 0.4 percent; Russia, 32.3 percent; Philippines, 24.5; percent Vietnam, 25.7 percent (Source: Internet World Stats). Note: these figures may include mobile phone access to the Internet, so PC access could be considerably lower.
This low PC Internet penetration makes it much easier for mobile Internet usage to overtake PC Internet usage than in more developed countries such as the US (world population rank: 3): 76.3 percent, Japan (10): 75.5 percent; or Germany (14): 63.8 percent. Though Japanese mobile Internet usage is catching up fast, conservatively estimated to be used by 62 percent of the population by Christopher Billich.

3. Demand
For developing nations where access to other media has been limited, mobile is the great enabler. In developed nations, (for the majority of people) mobile is an alternative to PC access, it's the Internet while on the move. For people in developing nations, mobile is and will be their only access to the Internet and all the services that folk in the developed world now take for granted such as online banking, money transfer, email, up-to-date weather and news, commodity prices, commerce, government services. Mobile has much more potential to transform lives in developing countries than in developed nations. See this Interview with Ogilvy's Barney Loehnis and the Mobile Guide to India for more on this.

4. Momentum
The China Internet Network Information Center report for January 2010 suggests that dramatic growth in mobile means mobile access to the Internet has already surpassed Web access in China; it says:
"China's mobile phone users have showed rapid growth. By end of December 2009, the number of mobile Internet users reached 233 million, accounted for 60.8 percent of the total number of Internet users."
While mobile Web stats for Russia at 23.6 million (16.9 percent of the population) and India at 12.1 million (1 percent of the population) in 2010, according to eMarketer are a bit pale in comparison with China (mobiThinking is still searching for statistics on other Asian nations), annual growth is very strong at 31 percent for Russia and 100 percent for India.

5. People power
The operators take a lot of credit for the boom in mobile Internet in Japan – they invested in high quality networks and 3G coverage and from the early in the last decade (unlike Western nations) priced mobile data to be affordable for consumers and introduced fairly priced revenue share models for content providers. If the developing nations emulate Japan's example, and introduce affordable flat-rate data plans for consumers and make data prices inviting for content providers, they will unlock potential demand far greater than in Japan.
Take India for example, according to the Internet & Mobile Association of India there are currently 127 million mobile subscribers with Internet-ready phones (that's more people than live in Japan and bigger than Germany and UK combined), but only 12 million have actually used them to access the Internet.
Content providers in Asia are campaigning for cheaper data, see this interview with Ian Stewart, head of Asia, Friendster – this social network has actually started introducing its own all-you-can-surf plans with local operators.

6. Barriers, what barriers?
Perceived barriers to growth of the mobile Web, such as low penetration of 3G handsets and/or networks don't seem to be that much of an issue. Informa (2009) data cited by Morgan Stanley puts ownership of 3G handsets in China at less than 1 percent (compare this to 90 percent in Japan or 75 percent in Korea).

7. Brand engagement.
Global brands are attracted by mobile in Asia for its ability to reach this massive audience in the developing countries that is unreachable through other channels. This is summed up well by Procter & Gamble's Marco Gavin:
"Asia is the world’s most populous region, but it has the starkest differences in mobile usage from using futuristic technologies such as augmented reality and 2D quick response codes to engage with customers in Japan to using basic SMS to connect with consumers in rural Indonesia. While mobile in the West typically focuses on mobile Websites and applications and is considered a nice add-on to the existing media mix, in Asia mobile enables a level of engagement unseen before. This might be because of advanced features offered by mobile or because we can now engage with consumers we couldn't previously because they don't own a TV or PC or read newspapers. This obliges us to take mobile marketing to a more strategic level in Asia and just as consumers leapfrog the PC Internet by going directly to the mobile Internet, so marketers go from no direct marketing to advanced mobile marketing techniques. There's a similar situation in other regions, such as Latin America and Africa, but the vast population makes Asia the lead region for developing mobile marketing models at P&G."

8. The question isn't 'if', it is 'when' will mobile surpass PC?
Globally mobile access to the Web is expected to overtake PC access within five years, according to the International Telecommunication Union, as well as analysts such as Morgan Stanley. The question mobiThinking wants answered is when will mobile overtake PC in Asia? It seems very unlikely that Asia's developed nations, led by Japan, will wait five years; of the developing nations, China has already reached the cusp; so, when will mobile in India, Indonesia et al catch up with the relatively small PC Internet penetration in these countries? Come on analysts, we need to know.

When mobile over takes PC access in Asia, it will not just be the largest mobile market in the world, it will be a market where, for most people mobile isn't just the best, but the only way for brands, content providers, retailers, banks, governments to connect with the majority of customers. Now that is really fascinating.

Further reading:

  • Global mobile stats: all latest quality research on mobile Web and marketing in one place
  • Why mobile is imperative for brands in Asia: interview with Marco Gavin, Procter & Gamble
  • Mobile: it's about the consumer, stupid: interview with Barney Loehnis, OgilvyOne, Asia
  • Mobile marketing to teens: an Asian perspective from Ian Stewart, Friendster
  • The insider’s guide to mobile Web marketing in Japan
  • The insider’s guide to mobile Web marketing in India
  • Why Japan is the king of mobile: the stats and facts
  • mobiThinking guide to mobile ad networks (2010)
  • Conferences & awards for mobile marketers, with offers
  • mobiThinking’s page of essential links

  • Posted by mobiThinking - 16 Apr 2010

    mobiThinking's picture

    mobiThinking focuses on everything you need to know on the business of mobile and web. With an exhaustive compendium of mobile statistics, practical guides to mobile agencies, ad networks, top mobile markets and more; interviews and analysis, industry events and awards.

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