Internet use in Asia-Pacific continues to grow at an astonishing rate, with 13.6% growth from April 2007-2008, compared to 10.9% worldwide. A comScore spokesperson comments: “Asia Pacific is becoming the dominant regional audience and will be critical in the global Internet competition.” (Note: Unless otherwise indicated, all statistics presented are from comScore’s July 2008 webinar presentation, “Digital World: State of the Internet,” focusing on Asia, and press releases prior to the webinar.)
China is leading the charge, having passed the US to take the lead in number of Internet users at more than 220 million, with projections of 490 million by 2012 (BDA China, March 2008). India had the largest increase, with a 26.7% growth over 2007, yet the Internet penetration rate in India is only 5.3% (InternetWorldStats).
Emerging markets are also contributing to the overall growth. Malaysia, New Zealand, and Taiwan are showing large gains in the number of Internet users, with double digit percentage increases. The increase in broadband is also helping fuel this growth. Asia-Pacific Internet users spend an average of 20.1 hours online. South Korea, Hong Kong, Taiwan, and Singapore have the highest broadband penetration rates of the region (ZDNetAsia quoting Frost & Sullivan). This rapid growth not only represents more access by the population, but also the wide variety of ways people are using the Internet.
When in comes to search, Google rules globally, accounting for 39.1% of the searches in Asia. comScore EVP Jack Flanagan adds: “Because Google and Yahoo! have a strong presence in many Asia-Pacific countries, they account for the majority of searches conducted in the overall region…. However, there are several strong, local country search engines that also play a significant role…. Most notably, the dominant search engine in China, Baidu.com, accounts for one out of every six searches in Asia-Pacific notwithstanding the fact that its users are primarily from China.”
Google leads in market share in India, Australia, New Zealand, Singapore, and Malaysia — countries where English is mostly used. In places where the local language predominates – such as China, Taiwan, and South Korea – other search engines (Baidu, Naver) are market leaders. China and Japan lead the region in total search volume because of their market size, but searches per users are highest in Korea, Japan, and Singapore.
2. Social Networking
Social networking in Asia grew at a rate of 119% year-on-year compared to a worldwide growth rate of 58%. The top 10 leading sites in terms of unique visitors are Friendster, Facebook, Ameblo, Multiply, Mixi, Cyworld, Orkut, HI5, MySpace, and Tagged. MySpace ranked second worldwide, just behind Facebook, which holds the ninth spot in Asia.
Some of the top social networking sites have strong roots in specific countries, including Orkut in India, Ameblo and Mixi in Japan, and Cyworld in South Korea. Universal McCann’s Wave.3 study (April 14, 2008) reports that 70.3% of South Korean, 64% of Chinese, 66% of Indian, and 41.7% of Japanese Internet users have created a profile on a social network site.
Although e-commerce is still nascent in Asia, the rapid increase of Internet users will no doubt fuel its growth. There are however, significant obstacles in Asia. In particular, the lack of online payment options, traditional reliance on cash transactions over credit cards, a general lack of trust in commerce, fragmented distribution systems, and security issues will continue to hinder growth. Nevertheless, eMarketer expects e-commerce to grow at a rate of 23.3% annually for the next three years, and they believe Japan will remain by far the largest market, with an estimated 53.4% share in 2011. However, eMarketer Senior Analyst Jeffrey Grau notes that “by 2011, Japan and South Korea, the region’s other mature market, will both lose share to two up-and-coming online markets – China and India.”
Asia-Pacific is definitely maturing as an online market, but it is clear that the best years are yet to come.