eMarketer estimated that in 2015, the total spend of digital advertising in the world will exceed US$170.85 billion according to its report released on 31 March 2015. Baidu and Sohu ranked the second and fourth respectively in the top 5 biggest search engines by revenue in 2014.

According to eMarketer’s estimation, in 2015, search engine ad spend will be US$81.59 billion with an increase of 16.2% from last year. And in 2019, search engine ad’s annual growth will be nearly 10% and its transaction value will exceed US$130.58 billion.

Among all the internet companies worldwide, Google still dominates the search engine advertising market. In 2015, its search engine ad business value is expected to be over US$44.46 billion with an increase od 15.7%. It represented 54.5% market share worldwide.

Benefited from Google’s exit from China, Baidu will account for 8.8% market share in 2015, which is increased by 1.2% from 2014. In 2014, Baidu’s mobile revenue surpassed PC in December. 

Baidu has a better understanding of China market. Browser is a strategic product for internet big players like Baidu and other internet companies. Baidu offers easier way for China internet users to access Google.

China is now the second biggest search engine market, after the U.S. with a market size of US$14.9 billion. And China search engine advertising market’s growth rate will be 32.8%, which is twice than the average growth rate worldwide in 2015.

Also read: Top 6 Desktop Browsers in China in 2014

Sohu total revenues were US$477 million, up 24% year-over-year and 11% quarter-over-quarter while Sogou, part of Sohu, revenues were US$119 million, up 70% year-over-year and 12% quarter-over-quarter according to Sohu announced financial results.

Sogou’s mobile keyboard is the top Chinese input application on both iPhones and Android phones while mobile search also showed strong momentum.

In 2014, Sogou continued on its rapid growth trajectory upon the smooth integration with Soso, Tencent’s search brand. Sogou now provides a full range of search services for the vast number of Tencent users.

Sogou have deepened  cooperation with Tencent’s WeChat. Following the launch of a unique function that allows Sogou users to search content published by WeChat official accounts, in their latest version of our mobile search App, they added a new feature called “WeChat Headlines“, which surfaces the most popular and breaking news stories being shared on WeChat.

Sogou have seen robust search traffic growth with mobile traffic growing over 150% in the past twelve months.

Sohu Performance Highlights in 2014

• Total revenues were US$1.7 billion, up 19% year-over-year.
• Brand advertising revenues were US$541 million, up 26% year-over-year. Of this, revenues of Sohu Media Portal were US$198 million, up 9% year-over-year. Revenues of Sohu Video were US$176 million, up 61% year-over-year.
• Sogou revenues were US$386 million, up 79% year-over-year.
• Online game revenues were US$652 million, down 3% year-over-year.
• GAAP net loss attributable to Sohu.com Inc. was US$171 million or US$4.43 loss per fully-diluted share. Non-GAAP net loss attributable toSohu.com Inc. was US$120 million or US$3.11 loss per fully-diluted share

Total revenues for 2014 were US$1.7 billion, up 19% compared with 2013.

Total online advertising revenues, which include revenues from the brand advertising and search and Web directory businesses for 2014, were US$899 million, up 43% compared with 2013.

Brand advertising revenues for 2014 were US$541 million, up 26% compared with 2013. The year-over-year increase was mainly due to increases in revenues from the online video and real estate advertising businesses. Of this, revenues of Sohu Media Portal were US$198 million, up 9% year-over-year. Revenues of Sohu Video were US$176 million, up 61% year-over-year.

Search and Web directory revenues for 2014 were US$358 million, up 80% compared with 2013. The year-over-year increase was mainly driven by the search business as a result of increases in the number of paid clicks and higher average cost per click.

Online game revenues for 2014 were US$652 million, down 3% compared with 2013. The decrease reflected a decline in revenues from TLBB, following the strategic decision to simplify its gameplay, and from Wartune and DDTank, as both games have now entered a mature phase in China. The decreases were partially offset by the successful launch of a new mobile game, TLBB 3D, and a new MMO, Fantasy Frontier Online.

Read more: China E-commerce Market in 2014

Interbrand, a brand consultancy company, released its 2014 Best China Brands report last week. Tencent claims the #1 position with China Mobile dropping to #2.

Eight brands entered the report this year, including Alibaba Group (#3), Huawei (#13), PICC (#20), Chow Tai Fook (#22), JD.Com (#25), 360 (#41), DEEJ (#48), Lao Feng Xiang (#50). In light of digital and mobile technology transforming the global marketplace, there appears to be increasing similarities between this year’s top Chinese brands and those brands recognized on the world stage.

“Brands across geographies have reached a pivotal point in terms of their development,” said Jez Frampton, Interbrand’s Global Chief Executive Officer. “They are entering what Interbrand has defined as the Age of You—and they are working to develop truly personalized and curated experiences around the individual consumer that this forthcoming age demands. Brands from all categories and sectors are getting “smarter” – with products and devices working in concert with one another, across supply chains and in tandem with our own individual data sets.”

The brand valuation methodology used for Best China Brands is the same methodology Interbrand uses to determine its annual Best Global Brands ranking. Interbrand examines three key aspects that contribute to a brand’s value:

• The financial performance of the branded product and service
• The role the brand plays in influencing customer choice
• The strength the brand has to command a premium price or secure earnings for the company.

The 2014 Best China Brands illustrate that those brands that have embedded technology and mobile applications throughout their core offerings have performed the strongest. Meanwhile, brands from more traditional industries demonstrated great potential as well. Overall, the total brand value of this year’s 50 Best China Brands increased 22 percent when compared to the total value of the 50 Best China Brands in 2013, representing the largest increase in the table’s overall brand value since the inception of Best China Brands. The strong performance of China’s Internet brands marks the end of an era for the financial services and telecommunication brands that had previously dominated the Best China Brands ranking.

With eight new brands making an appearance, the Best China Brands ranking has become more diversified and, consequently, Interbrand has been able to identify the following emerging trends:

The new ecosystem is cultivating the growth of super brands.

The total brand value of Internet brands has increased from 11 percent to 24 percent compared to last year, making the industry the second most valuable after the financial services industry. TAB (Tencent, Alibaba and Baidu), in particular, are either cooperating with or surpassing traditional industries in changing how consumers live, work, learn, and connect with each other and the world at large. Since the second half of 2012, TAB has acquired and invested in a wide-range of companies, including those representing the following sectors and industries: financial services, entertainment, education, and healthcare. As a result, these leading brands are creating entirely new brand ecosystems aimed at improving customer convenience and overall quality of life for all.

Mobile Internet, the Internet of Things, and Big Data have equipped brands with the power to change the word.

Mobile Internet, the Internet of Things, and Big Data not only provide opportunities for revolutionizing and changing traditional industries and Internet brands, but have also created greater synergy as a result of cross-platform collaborations—propelling the transformation and progress of society on a larger scale. Huawei, Lenovo, Haier, Gree and Midea particularly stand out, as they continue to actively explore and develop the concept of “smart city” and “smart home.”

Banking and Telecom industries call for transformation—a test of foresight and innovative capability.

The growth rate of the banking industry (12 brands earned positions on this year’s Best China Brands ranking) continues to slow down with the top four banks garnering less than 5 percent growth in brand value. Both state-owned and private commercial banks face greater challenges and more competitive pressure than ever before and are urgently in need of a “second transformation.” Those banking brands that possess foresight and innovative capabilities have undergone transformation either on their own or by collaborating with another brand—and have maintained their double-digit growth as a result. The business of voice calls and text messages for the Chinese telecom industry continues to decline under the proliferation of Mobile Internet. Facing numerous difficulties, Chinese telecom brands have implemented a series of actions to accelerate transformation. Only time will tell if such actions are too little too late or have the desired impact.

In addition to the trends outlined above, the significant movement amongst the 2014 Best China Brands also reflects four key challenges that Chinese enterprises face in the age of mobile Internet:

Revisit the concept of the age of Mobile Internet

Many Chinese enterprises lack a deep understanding of brand strategy and digital strategy. Their knowledge of ‘digital’ is limited to brand communication channels (online ads, official Wechat and Weibo) and e-commerce channels. Chinese enterprises need to adjust their mindset in both strategies to executional levels in the Age of Mobile Internet.

Emphasize a brand’s authenticity and differentiation.

Building a brand requires the coordination of all departments. A marketing department could be responsible for brand communication, but if no other departments, including sales and operations for example, do not support the corresponding brand experience, it would result in an inconsistent brand experience for the users, thereby reducing the brand’s level of authenticity, Differentiation is the perceived difference and uniqueness of the brand vis-à-vis the competitors. Without clear brand differentiation, brands can only compete on price. A brand’s core competency has shifted from technological capability to the ability to influence customers and consumers. If a brand were to build on its authenticity and differentiate itself from out inside out, it holds greater potential to bring greater value to its brand.

Clarify the direction of brand development.

Compared to great international brands, Chinese brands have a tendency to lack a clear brand vision. A clear brand vision can give a brand depth and bring it to life, garnering recognition and loyalty from the public. In contrast, those organizations lacking clear brand vision can only compete on price and thereby must work all the harder to remain relevant in today’s rapidly-changing Chinese and global marketplaces.

“Imaginative” becomes a key challenge for Chinese brands.

Today, Chinese enterprises need to think about how to create new brand experiences with their consumers instead of simply answering consumers’ current needs. Therefore, Chinese organizations need to inject a tremendous amount of imagination into their brands and into the experiences they build around those brands.

“The reason why Chinese brands face so many challenges and are operationally big, while fundamentally weak, lies in the gap of authenticity, relevance and differentiation compared to world’s most influential and powerful global brands,” said James Wang, General Manager of Interbrand Beijing. “Many Chinese enterprises are still in the early stages of brand development, or what Interbrand calls the Age of Identity. However, with every great challenge there lies a great opportunity.”

Yao Chen Gang, General Manager of Interbrand Shanghai also noted, “The Age of Mobile Internet brings great opportunity for Chinese brands to outpace competitors. The annual shipments of Chinese 4G smartphones can surpass a hundred million. Based on the economic value brought by Mobile Internet, the scale of China will likely be 3 to 4 times of the United States in the future. In this age, brand owners should clarify the brand’s vision, infuse creativity and imagination, create a well-rounded brand experience and co-create value together with consumers. With Huawei becoming the first Chinese brand to enter the Best Global Brands ranking, we look forward to seeing many more Chinese brands earn a top position in the near future.

Click here to read the report in Chinese (PDF).

Stats of Top Selling Brands on Taobao/Tmall in 18 Categories in Sep 2014

Sohu’s total revenues for the third quarter of 2014 were US$430 million, up 17% YoY and 8% QoQ.

Its online advertising revenues, which include revenues from brand advertising and search and others businesses for Q3 2014, were US$247 million, up 40% YoY and 13% QoQ.Brand advertising revenues totaled US$149 million, up 19% YoY and 12% QoQ due to increases in revenues from online video advertising.

Sohu online game revenues for the third quarter of 2014 were US$150 million, down 7% YoY and 2% QoQ, mainly due to decreased revenues from Wartune and DDTank. Both games have now entered into a relatively mature phase in China, as well as from TLBB, following the strategic decision to reduce the game’s difficulty. And, game players are spending less money in TLBB after Changyou made a strategic decision to reduce the level of difficulty of the game.

Sohu’s operating loss for the third quarter of 2014 was US$41 million, compared with operating profit of US$52 million in the third quarter of 2013 and operating loss of US$62 million in the second quarter of 2014.

Non-GAAP operating loss for the third quarter of 2014 was US$26 million, compared with operating profit of US$55 million in the third quarter of 2013 and operating loss of US$35 million in the second quarter of 2014.

Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented,

We had a solid quarter, and our financial performance was largely in line with our expectations. Some of our key business lines continued to show strong momentum. Sohu Video maintained a healthy growth in users, driven by an impressive 40% sequential increase in mobile traffic. Sogou’s quarterly revenue exceeded $100 million for the first time and was up 86% year-over-year. In September, Sogou’s mobile Keyboard became the No.1 app on the iOS China app store’s ranking table once Apple finally allowed third party input method software to work on its iOS 8 system.”

For the fourth quarter of 2014, Sohu estimates:

• Total revenues to be between US$442 million and US$462 million.
• Brand advertising revenues to be between US$145 million and US$150 million; this implies a sequential decrease of 3% to a sequential increase of 1% and an annual increase of 18% to 22%.
• Sogou revenues to be between US$118 million and US$123 million; this implies a sequential increase of 11% to 16% and an annual growth of 68% to 75%.
• Online game revenues to be between US$155 million and US$165 million; this implies a sequential increase of 3% to 10% and an annual decrease of 4% to 10%.
• Guidance on Non-GAAP net income, Non-GAAP fully diluted earnings per ADS, and share-based compensation expense for the fourth quarter of 2014 will not be provided at this time, as there are uncertainties as to expected costs and expenses associated with mobile games launched, expected to be launched, and currently in development

Source: Sohu

Sohu News mobile app achieved 100 million users this May; but now, Tencent News surpassed Sohu News becoming the best mobile news app by the number of unique visitors and MAU.

During a 10-week period from 2 June to 10 August 2014 in China, a study from EnfoDesk shows that Tencent News and Sohu News apps are the top two mobile apps in news category by total number of unique visitors and MAU, with average weekly UV of 60.93 million and 56.47 million respectively.

The study analyzed traffic from popular Chinese mobile news apps including Tencent, Sohu, Toutiao, NetEase, Phoenix, Sina and other news apps.

The UV growth of the top three Chinese mobile news apps (Tencent, Sohu, Toutiao) were driven by the crash of Malaysia Airlines in the territory of Ukraine while Netease, Phoenix, Sina had no significant fluctuations.

Tencent News had 94.13 million monthly active users during the period studied, which ranked the top, followed by Sohu News (86.02 million). Netease had 12 million MAU, surpassing NetEase and ranking the third while Phoenix news is at the bottom of the list.

Read more: The number of Sohu News APP Users Hit 100 Million

Sohu announced its Q3 finance report on October 28, 2013. The total revenue reached USD 368 million, 29% more than that of 2012 and 9% more than Q2 2013.

Sohu Q3 revenue from advertising was USD 125 million, 60% more than 2012, and 25% more than Q2 2013. Sogou’s revenue reached USD 57 million, with a 53% YoY increase and a 14% QoQ increase. Sohu’s revenue from online games was USD 161 million, with a 7% YoY increase and a 4% drop from Q2 2013.

In Q3, Sohu’s net loss reached USD 65 million, mainly due to the investment in Sogou including dividends to preferred shareholders, which Sohu should take on USD 82 million expenses as Sogou’s controlling shareholder.

Sohu achieved significant growth in the mobile video segment as traffic increased massively in the third quarter. To-date, total number of active users for Sohu’s mobile applications reached 140 million.

The Sohu-Tencent partnership in search announced in Sep will improve Sogou’s competitive position against market leader Baidu.

According to EnfoDesk, market scale of China advertising platforms in Q3 reached 28.77 billion yuan (USD 4.7 billion), 24.2% more than Q2 2013.

In Q3 2013, Baidu occupied 30.8% market share by revenue, and Alibaba ranked the second with 15.9%. Google came to the third place in China advertising operators with 5.5%.

China advertising market in Q3 2013 grew steadily due to the slight recover of macroeconomic and the coming of sales season. Baidu remained its leading in China advertising operators, and keyword advertising was still the top advertising choice.

Tencent, Sohu, Sina,ifeng and NetEase together occupied 14.7% market share. Portal websites had broke the traditional business model of selling ads, integrating other resources such as social network, videos, entertainment and life services.

iResearch recently released its China Internet Data Report in Q2 2013, giving us a glimpse of China internet performance in Q2.

Online Markets and Online Advertising

As you can tell from the chart above, Mobile won over PC devices on internet segment markets growth, such as shopping, searching, marketing(searching excluded) and game. Online shopping and searching on mobile devices both had a YoY growth as high as 181%, out performed PC devices which only had 39% and 28.6% YoY growth.

Chinese online advertising had a relatively stable market structure, Baidu and Taobao were the two giant in online ads market. Baidu’s revenue from advertising in Q2 reached 7.56 billion yuan(1.23 billion USD), followed by Taobao with 5.61 billion yuan(909 million USD).

Qihoo’s 360, Taobao and Sohu had pretty high QoQ growth rate.

E-Commerce

Online shopping was the driving power of E-Commerce, had the highest YoY growth rate of 45.3%. B2B was still the biggest part in E-Commerce, with 2 trillion yuan(324 billion USD) revenue in Q2 which was 80% of total E-Commerce revenue.

B2C grew twice faster than C2C in Q2 2013. B2C had a 77.4% of QoQ growth rate, while C2C QoQ growth rate was only 31.8%.

Mobile shopping had a strong growth trend in Q2, with 8.6% QoQ growth while shopping on PC dropped 91.4% compared to Q1, 2013.

Chinese online shopping markets were led by Tmall with 50.8% market share and Jingdong with 17.1% share, the competition in the second-tier B2C enterprises were tense.

Online Video Market

Online video providers’ revenue mainly came from advertising,with 75.28% share, during which video ads was the biggest. Besides, copyright licensing distribution occupied 8.61% share, and video value added service occupied 4.3%.

Third Party Payment Market

Alipay occupied 49% of China third party payment market, followed by Tenpay with 20% and Unionpay with 10%?

Alipay was the top app in China mobile third party payment with 66 million monthly users and 20.4% MoM increase rate. However, Bestpay, Lakala,cmpay and yeahka competed with each other fiercely in Q2 2013.

Mobile Internet Market

Mobile shopping surpassed mobile value added service in Q2, becoming the biggest mobile segment market with 38.5% share.

China online ad market in Q2, from iResearch data, reached 23.26 billion yuan (USD 3.8 billion), growing 17.4% compared to Q1 and YoY growth of 27.4%. China online ad market is entering to a steady growth stage.

In Q2, search, video, news and navigation monthly usage increased. NetEase, Taobao and eTao had more than 10% QoQ growth, Sina, Sohu and iFeng had more than 7% QoQ growth.

Search engine ads kept growing in Q2 with 36.4% online ad market share. Vertical search ads and brand banner ads dropped slightly compared to Q1, with 22.4% and 21.2% share. Video ads grow steadily with 6.7% share.

Baidu, Google and Sogou promote the grow of search engine ads, market new player Qihoo’s 360 will further push it. Vertical search ads is due to the fast growth of Taobao search, online shopping increase brings up vertical search ads. High quality video content, such as movies, TV dramas and shows boost video ads growth.

In China top 10 online ad market companies, Baidu was still the leader with 7.56 billion yuan in revenue. Taobao came to the second with 5.61 billion yuan. Taobao, Qihoo’s 360 and Sohu had grown by more than 40%.

Qihoo’s 360 main revenue comes from navigation, growing steadily. Qihoo’s search ads conversion keeps increasing. Taobao has lots of small business which provide growing need for advertisement.Sogou search engine and its video contributed to its revenue growth.

Sohu just released its Q2 financial report on July 29, 2013. The total revenue in Q2 is USD 339 million, 10% higher than Q1 with year-on-year increase of 33%.

Net income is 22 million USD in Q2, 6% lower than Q1 with a 100% year-on-year increase. Sohu operating income is 64 million USD in Q2, 9% lower than Q1 with a 49% year-on-year increase.

Sohu advertising revenue in Q2 is 146 million USD, 49% higher than last year with a QoQ growth of 26%. Advertising revenue includes brand advertising and search advertising.

According to Enfodesk, Baidu accounted for 30.9% of the total online ad revenue in China; Alibaba for 15.3%, and Google China for 6.2%.

According to the data provided by iResearch this July, here comes the list of China’s top 20 internet companies by total reached users in the first half of 2012. The research was based on long-term monitoring for 400,000 network behavior samples.