Jointly published by Cheetah Global Lab, Cheetah’s big data platform libra, and leading technology media 36kr
By: Rong Rong and Yu Ran, Cheetah Global Lab
In the history of the internet, the year 2016 is destined to be remembered.
2016 represent a return to rationality for China’s internet industry following a nationwide entrepreneurship frenzy. As the tide fades, naked swimmers are revealed, and those who can’t cut it are driven from the battlefield without mercy.
The internet companies that are still battling in the market represent the cream of the crop. However, the market is no longer as prosperous as it once was. The user dividend is fading and the cost of gaining users keeps rising. More and more sectors are entering this second phase of the internet, and consequently, the era of acquiring users at a low price is coming to an end. The right thing to do in this new era is to maintain product quantities while improving quality, meaning digging further into the value of existing users. It requires painstaking efforts to stand out in such a fierce market.
Early in 2016, it seemed that all the dust had already settled in the internet market, but in fact, some new battles were just emerging. The saying, "the only thing that doesn’t change is change itself" was once again proven accurate.
At the beginning of 2016, live streaming emerged and ramped up to be a nationwide live streaming frenzy, with more than 200 platforms heading into the "battle of a hundred Live platforms" at its peak. Despite this success, live streaming platforms have been continuously plagued by the appearance of inappropriate content, such as pornography, money laundering, terrorism and violence. What goes up, must come down, and by the end of 2016, the live streaming wave began to recede.
In early 2016, fierce competition in the news and information space was limited to various news apps, but by the end of the year, news feeds had penetrated every corner of the mobile web, including browsers and utility apps. Users have shown the greatest interest in personalized recommendation software. Those publishers who have been able to grasp the needs of users have been the most successful.
In the first half of 2016, Didi Chuxing ended its war with Uber—its foreign rival—in the most unexpected way. But just when people thought the car hailing market had finally settled down, underdogs in the sector returned to the market after the government issued strict regulations for the industry, once again complicating the market.
While everyone was busy predicting the future direction of the premium car hailing market, new bike-sharing apps emerged. In no time, cities were witnessning orange, yellow and blue bikes streaking across the streets. Bike-sharing, which came out of nowhere, began to compete with other players in the transportation sector.
The cold winter hasn’t been able to cool the bike-sharing craze, just as a fitness craze in general has spread throughout the country. A dancing app called Tangdou Dance even reached the top of the fitness app rankings. Maybe there remains even more unexplored opportunities in the fitness market.
Consider the past, and you shall know the future. To celebrate the arrival of 2017, Cheetah Global Lab, in cooperation with libra, Cheetah Mobile’s big data platform, and 36kr, a leading technology media company, has ranked the different types of apps on the Android platform to provide an overview of a memorable 2016, and provide insight into the trends that will shape 2017.
(Notes: Cheetah Mobile’s own utility apps, such as Clean Master, CM Security and CM Browser are excluded from the list. Apps with a high pre-install ratio are also excluded.)
Part 1: Social, Live Streaming, Short Video, Photography
In 2016, live streaming and short video became all the rage and served as a new form of social. For easy comparison, the ranking here will be classified in line with Cheetah Global Lab’s conventional approach, namely, classifying apps into social, short video and live streaming categories. But we believe that in the near future, the lines between these categories will become increasingly blurred, allowing us to compare them in a more comprehensive manner.
Live streaming and short video are the ace in the hole for social apps; Sina Weibo returned to its peak.
Tencent’s WeChat and QQ apps predictably topped the annual social apps list again in 2016, but what surprised people, was that WeChat continued to widen its gap over QQ, leaving it far behind in terms of weekly active penetration rate. In other news, Qzone was caught and passed by Sina’s Weibo.
2016 is acknowledged as the "first year of live streaming" in the social media space. On the one hand, many live streaming apps entered the social app rankings, while on the other hand, all of the Top 6 social apps, with the exception of WeChat, have added live streaming services. Weibo made the right gamble by devoting itself to short video and live streaming, which drove its stock price to a new high and catapulted it into third place in the app rankings.
Meanwhile, previously popular social platform Douban fell out of the Top 15 partly due to poor functionality in the latest version.
Emerging social apps: Vertical apps gradually rising
Blued is now the most popular gay social networking app in China, ranking 13th in the rankings. Compared with other social apps, Blued’s weekly active user base is not that impressive, but in terms of the weekly openings, it has shown strong user stickiness. When live streaming became popular, Blued reacted quickly by adding live streaming functionality. In June 2016, Blued announced that it had completed Series C and Series C-plus financing worth several hundred million RMB, signaling the entrance of gay apps into the mainstream market.
As the mobile internet becomes increasingly ubiquitous, "mobile offices" are becoming a trend. WeChat is no longer just a social platform for friends and acquaintances, but it now serves as an office communication tool. In fact, how to separate their work and private lives has become a pain point for WeChat users. Emerging at just the right time, Ding Talk has quickly climbed in the rankings. However, WeChat has also opened its own enterprise services, so it remains to be seen which social apps will take the lead in the office communications space going forward.
Live streaming: changes took place at the end of 2016, finally settling down despite ups and downs.
Live streaming was the most dynamic app sector of 2016. In October 2016, live streaming app Inke finally surpassed its top rival YY to top the list of purely live streaming apps. Just two months later, YY once again beat out Inke, but by that time, another live streaming app, Huya, had surpassed both of them to take the top spot.
However, it’s not all good news for live streaming apps. An analysis of Huya, YY, Douyu, and Inke’s performance data from the end of August to the end of December shows the slowing pace of live streaming apps. According to the development trends over the past four months, Cheetah Global Lab has concluded that, though we are still uncertain as to which app will come out on top, the live streaming industry as a whole has said goodbye to the high growth rates that characterized it in the past. It will not be easy for live streaming apps to climb further up the rankings, and they still have a long way to go.
Short video: Short video app Kwai become the biggest challenger to Tencent; TouTiao Video shined the brightest
Almost all of the apps in the short video rankings are new besides a few established players like Kwai, Miaopai and Meipai. 13th ranked Pear Video was just launched in November. Earlier in the year, Faceu topped Cheetah Global Lab’s rising app rankings in February with a 32X growth rate. Although the popularity of short video apps took a hit with the rise of live streaming, it witnessed another surge at the end of the year.
Keeping up with the trend, Kwai added live streaming functionality in 2016. Kwai leads the short video sector, even outclassing TouTiao Video, which ranked 2nd, despite its rapid development. If we were to put Kwai into the social app ranking, it would far outperform Qzone, but fall slightly behind Weibo in terms of weekly active penetration rate. However, it beats Weibo by a margin of 2:1 in terms of weekly app openings, second only to WeChat in the social app category, thereby posing the greatest threat to Tencent, WeChat’s parent company.
TouTiao Video was the fastest-growing app of 2016. It was launched in July 2016 and ranked 40th in China’s app rankings by the end of the year. Volcano Short Video was originally named Volcano Live. It was also launched by Toutiao.com as an imbedded live streaming app. The name changed and its shift towards short video shows Toutiao.com’s ambitions in the short video space. TouTiao Video provides users with a collection of recommended short videos, while Volcano Short Video focuses on social, while maintaining its original live streaming service. In this way, the two apps complement each other.
Photography: Meitu went public; Memory Album went online.
Meitu, which dominated the photo app industry in China, went public in 2016, becoming the first company to list on the Hong Kong Stock Exchange before earning a profit. Although Meitu boasts of its 1.1 billion users, most of its profits come from cell phone manufacturing. Meitu’s transformation is imminent.
It wasn’t any easy task for Memory Album to rank 4th in the photography category and make it into the overall Top 100 given the fierce competition in the photography app space both at home and abroad. Much of its success comes from its marketing approach. For example, it recently partnered with a popular Japanese animated film called Your Name to release a filter which allows users to make their own photos look like the animation style from the film. When users share the photos to their WeChat Moments, it imbeds them with a QR code that other WeChat users can scan to transform their own photos.
Another app worth mentioning is B612. In 2015, B612 became popular in the overseas market, and in 2016, it successfully entered China. After adding video beautification features, B612 became the fastest growing photo app in the fourth quarter of 2016, with over 200% growth.
Part 2: News & Information and Reading Apps
News & information: Personalized news recommendation stands out; head-on collision between Tencent and TouTiao.com
Personalized news recommendation apps can be considered the top tier of news apps in 2016. Personalized recommendation, represented by TouTiao.com, topped the list of news apps for the whole 2016. Tencent News, which ranked 2nd, and Tiantian Kuaibao (also a Tencent app), which ranked 3rd, are in a good position to challenge TouTiao.com in the personalized news recommendation space. Tiantian Kuaibao was not on the list last year, but has risen to 3rd place now, indicating its strong influence. Yidianzixun, which ranked 4th, also focuses on personalized recommendations and customized content. It is now striving to surpass the tier-one rivals ahead of it. However, we also have to also mention TouTiao.com (Express Version), which skyrocketed to 5th place just one month after its launch. It is basically a pared down version of TouTiao.com that has maintained its core news notification and video features while taking up less space and running faster.
Although TouTiao.com is the overall leader, in terms of the combined user base of a single company, the weekly active user base of Tencent’s two apps (including overlapping users) exceeds that of TouTiao.com and Toutiao.com (Express Version). In terms of the number of times it is opened per week, Tiantian Kuaibao has the absolute advantage over all other news apps. Therefore, the news app battle was epitomized by the head-on collision between Tencent and TouTiao.com in 2016. These two rivals will continue to champion their vested interests and expand their operations in 2017.
The second tier of news apps is composed of various portal websites. Quick response and solid special topic planning has enabled major news media to gain a foothold in the news app market, with Sohu, NetEase, iFeng and Sina ranking 6th, 7th, 8th and 9th respectively.
The third tier contains various vertical news app whose performance is noteworthy despite their failure to enter into the Top 10. Some apps have taken the opposite approach of AI-based personalized recommendation apps, instead focusing on high quality and in-depth articles selected by human editors. Paid content is also becoming more prevalent. Cheetah Global Lab estimates that in 2017, vertical news app will grow stronger, especially in areas like paid content and deep-dive research.
Reading: Competition is fierce, but no one has become the undisputed leader; QQ and iReader are in the front seat for now
Reading apps are in a much lower-profile position compared with news app because of a lack of report on this sector. But it does not mean the sector is not popular, instead, it boasts a large number of users with a decent amount of space to expand. In addition to selling e-books, another major income source for reading apps derives from subscriptions to online novels and online literatary works, which are released chapter by chapter, so users have purchase them one at a time.
At present, QQ Reading is almost on a par with iReader in terms of active penetration rate, followed by Easou. These three apps constitute the first tier of reading apps. It’s worth mentioning that if we combined both the domestic and overseas versions of iReader, we find that the weekly active user base of iReader has surpassed that of QQ Reading. QQ Reading, by means of its strong user resources and technical strengths, allows users to read across different platforms like websites and mobile terminals without affecting the reading experience. Book giveaways sponsored by QQ and WeChat have also increased its popularity. iReader, on the other hand, is shifting towards hardware with the release of an e-book reader. Currently, Tencent is beginning to expand into the Southeast Asian market, while iReader has also released an international version.
The apps ranked from 4th to 10th place all have similarly sized user bases. They all compete against each other in a group, with no single app standing out from the rest.
For now, reading apps are confronted with an awkward situation. Although the market is full of such apps, those with quality content are rare. Many quality novels which you have to pay to read are released for free on other platforms where intellectual property rights are not strictly enforced. Cheetah Global Lab believes that as the industry starts to pay more attention to copyright protection, the reading app industry landscape will shift, and platforms that do not attach importance to copyright protection will gradually be eliminated. Moreover, legitimate platforms will try their best to win authors and IP rights. Thus, only platforms with the best content will survive.
What’s more, many mainstream browsers have added online novel-reading functions, which represents a direct challenge to reading apps. In this way, they are sure to benefit from the traffic generated from online reading. They will also develop pay-to-read mechanisms when the online reading market becomes more mature.
Comics: Leaders are starting to emerge; originality and copyrights are the most important
Comic book-reading is a relatively vertical sector. Given the weekly active penetration rate of Kuaikan Comic, a fixed pattern is forming in the comic app community. Comic-reading is just like novel-reading, which encourages originality, accumulates pay-to-read users, and binds users to a particular app.
Part 3: Audio and Video
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