Internet going to sea white paper 2022 From Huawei cloud & Analysys

The following is the Internet going to sea white paper 2022 From Huawei cloud & Analysys recommended by recordtrend.com. And this article belongs to the classification: Analysys, research report.

Recently, Huawei cloud and Analysys jointly released the “white paper 2022 on Internet going to sea” (hereinafter referred to as “the white paper”). Based on rich market data and materials, the white paper has analyzed the background of five popular industries going to sea in Southeast Asia, Latin America, the Middle East and North Africa, sub Saharan Africa and Western Europe, 12 countries and their respective markets, including financial technology, e-commerce, games, social entertainment and tools It has made a comprehensive and in-depth analysis of the current situation and trends, providing rich development suggestions and reference information for Chinese Internet enterprises going to sea. The following is an excerpt from the white paper.

In terms of the background of going to sea, China’s core industries have reached the top in growth, rich experience in Internet business and national policy support, jointly promoting Chinese enterprises to go global:

(1) The growth rate of core industries reached the top: China’s Internet industry has entered a relatively mature stage of development. In 2021, the number of Chinese Internet users reached 1.032 billion, the Internet penetration rate reached 7.0%, and the year-on-year growth rate was only 4.34%. Compared with 9.45% in 2020, the growth rate decreased by more than 5 percentage points. In this context, Analysys analysis data shows that the growth rate of the core Internet industry represented by e-commerce, Internet advertising and mobile games has also continued to slow down since 2017, reaching an average of about 10% in 2021. Expanding overseas markets to find new growth opportunities has become an important consensus of China’s Internet industry;

(2) Rich experience in Internet business: China has the world’s leading experience in the development of the Internet industry. The huge industrial scale has cultivated a large number of world’s leading Internet enterprises, and has rich experience in business operation, industrial cooperation and user service;

(3) The State supports enterprises to go to sea: the state always pays attention to and supports enterprises to develop overseas business, and provides multidimensional support and help to enterprises from top to bottom. Many central ministries and commissions such as the State Council and the national development and Reform Commission, as well as local governments in Beijing and Guangdong, have issued relevant supporting policies or established mechanisms to provide many assistance, including legal services, policy consultation, intellectual property rights, digital transformation, etc., providing all-round support for the overseas business and development of Chinese Internet enterprises.

In terms of opportunities in various global segments, Chinese Internet enterprises have opportunities in mobile games, mobile e-commerce, social media, pan entertainment, financial technology, practical tools and other segments.

(1) Mobile games: user spending in emerging markets such as Latin America, the Middle East and Russia far exceeds that in China, and has broad prospects for development. Over the past three years, combined with the impact of the epidemic and the diversification of game playing methods, mobile game users’ expenditure in various countries has increased steadily, and some countries in Latin America, the Middle East, Europe and Southeast Asia have performed well. In terms of categories, 4x marching SLG is the category with the highest user expenditure. In addition, games such as Sanxiao +x perform well in emerging markets. For Chinese funded enterprises, based on emerging markets and selecting appropriate categories is one of the key strategic points that need to be polished for their development at sea. At the same time, in terms of supervision, compared with the game market in Chinese Mainland, the game supervision system in most overseas countries / regions is relatively loose on the whole. In addition to the industry wide compliance requirements such as data / privacy protection, game companies need to pay attention to the relatively low cost of compliance related to the game content itself in the process of going to sea. They mainly need to pay attention to the classification system, harmful content and other supervision.

In addition, Chinese enterprises have a strong ability to attract money from medium and heavy games, ranking high in the world and low in light games. In terms of medium and heavy category games, in addition to pubg mobile and Genshin impact, rise of kings, state of survival and other SLG games focus on the global market and attract players with rich and different content elements and playing methods. At the same time, some games choose specific markets for promotion based on user needs and local characteristics. For example, knives out under Netease focuses on the Japanese market, and gains a large number of local loyal users through cooperation with local well-known KOLs and linkage with well-known IP. In light games, the overall ranking is mostly in the middle and waist, mainly in leisure, slots, chess and cards. Among them, dream idol Festival, which ranks 19th, is a nurturing audio game based on IP development. In the Japanese game market, which emphasizes the sense of companionship and plot, it quickly obtains users with a high degree of plot restoration, with a single year revenue exceeding US $300million.

(2) Mobile e-commerce: emerging markets led the growth of global e-commerce, with the growth rate in Southeast Asia and Latin America exceeding 20%. According to the data released by emarketer in February 2022, emerging markets represented by Southeast Asia, Latin America, the Middle East and Africa will become one of the fastest growing regional markets in the world. Eight of the top ten countries in the global growth rate are from Southeast Asia or Latin America, which will become the focus of the future development of global e-commerce enterprises, including Chinese enterprises. Western Europe, on the basis of relatively high growth rate in 2021, has fallen back and entered a relatively mature stage of refinement. The United States will achieve a growth of 15.9% driven by more independent brand stations and social e-commerce, including live e-commerce, and drive the growth of North America. The global e-commerce market continues to develop, and the prosperity and rapid growth of emerging markets will provide broader and considerable development opportunities for Chinese enterprises.

(3) Social media: diverse user needs, strong revenue capacity of social media platforms, and great potential in a large number of emerging markets. In January, 2022, the global penetration rate of social media exceeded 58.4%, which was much higher than that of other categories of mobile end products. Users’ single day use of social media apps was also higher than that of games, reading and other major categories. Users have formed a relatively stable habit of using mobile social media apps, and social media has become one of the main ways for users to make friends, obtain news and query information. Based on this, there are two major opportunities for Chinese enterprises’ social media apps to go to sea: first, stable usage habits will generate more rich needs, such as making friends with strangers, making friends with audio, etc., and many opportunities will emerge for the concept of entertainment and social networking; Second, in South Africa and other regions, the penetration rate of social media is still lower than the global average under the huge population base, and there is still huge room for growth compared with the head region. At the same time, focusing on the income of social media platforms, the amount of advertising put by advertisers in social media worldwide continues to rise, and the social media advertising expenditure in Europe, Latin America and many other countries has increased steadily. Under the background of huge market space and huge growth potential, the prospect of excellent social media products of Chinese funded enterprises can be expected.

In addition, the products and operation experience of social enterprises in the Chinese market are becoming a growth weapon for their overseas development, including audio and video games such as live PK, chat room and online karaoke, which have shaped successful products such as helo and streamkar. Chinese enterprises can learn from these products and integrate audio and video technology into product operation when going overseas. At the same time, tantan and other products have opened the market for making friends with strangers of the opposite sex. At this stage, they have a large market space in Indonesia and other Southeast Asian countries. Stranger matching, dating and making friends are the other main categories for Chinese enterprises to go to sea. Litwatch and cuteu are the main products. Chinese enterprises should pay attention to them and pay attention to the market competition trend.

(4) Pan Entertainment: Chinese content such as reading and short video helps upgrade the global content industry. At the reading level, the market has the potential for scale growth. Chinese enterprises have gone to sea for a long time, gradually opening up overseas markets from content handling, platform building to IP going to sea. China’s overseas reading apps have been highly competitive as a whole, and high-quality content is concentrated in the hands of the head platform. Chinese enterprises’ overseas online articles at sea give full play to their creators’ service experience, actively cultivate the ecology of overseas original authors, and build market competitiveness by relying on content. At the short video level, based on the blessing of algorithms and high-quality content, a large number of short videos occupy the online entertainment time of users, and major social media and long video giants have entered the market one after another, resulting in fierce competition. At the same time, with the rise of pugc mode, the demand for user editing and sharing surges, and editing tool apps will be a new growth point for Chinese enterprises to go to sea. When Chinese enterprises go to sea, they should pay more attention to the layout of this category.

(5) Fintech: the total investment has rebounded, and payment, wealth management and digital currency have attracted the attention of VC. In 2021, global fintech companies received a total investment of 210.1 billion US dollars, and the overall scale rebounded significantly year-on-year under the relief of the epidemic. Among them, VC has the highest amount of investment in fintech, exceeding 125billion. While focusing on emerging fields such as NFT and digital currency, VC and other institutions still maintain continuous investment in traditional and just needed segments such as payment and wealth management. By 2021, only 5 and 10 Chinese funded fintech enterprises have entered the global Top100 and 200 in terms of market value. Under the continuous attention of the industry by capital, excellent Chinese funded enterprises’ mobile financial products are full of opportunities and great potential to go to sea.

(6) Utility tools: Chinese tools bring efficiency upgrading to overseas users. Tools (mobile phone cleaning, VPN, file management, etc.), production efficiency (collaborative office, password lock, calendar, etc.) and other practical tools. The download volume in 2020 and 2021 increased by 17% and 35% year-on-year. Under the transformation of living modes such as home isolation and online office, the demand for user efficiency management and online collaboration has increased. Tools and efficiency apps have contributed more than 60% and nearly 40% of downloads and revenues to the utility category. Users’ demand for garbage cleaning, privacy protection and other functions continues.

In the global region, compared with the mature domestic market, there are many macro dividends and industry opportunities with rapid growth in both emerging and developed markets overseas. The white paper focuses on five regions: Southeast Asia, Latin America, the Middle East and North Africa, sub Saharan Africa and Western Europe.

Southeast Asia

Southeast Asia has a large demographic dividend and steady economic growth, focusing on Indonesia, Vietnam, Thailand, Singapore, the Philippines and Malaysia.

From the perspective of user base, the overall population size or density of Southeast Asia is relatively large, the growth is stable, and the per capita length of Internet use ranks first in the world. Indonesia, the Philippines, Vietnam and Thailand are all countries with large populations, and Singapore has a large population density; The Philippines, Malaysia, Thailand and Indonesia ranked second, sixth, seventh and ninth in the world in terms of per capita Internet use duration. That is, the above-mentioned Southeast Asian countries have a large Internet demographic dividend.

From the perspective of network infrastructure, the overall network infrastructure level in Southeast Asia is at the leading level in emerging markets. Singapore ranks 20th in the world in terms of mobile terminal network speed, and Thailand ranks 3rd in the world in terms of fixed terminal network speed. Although the average network speeds of Indonesia, the Philippines and other countries are relatively low, according to GSMA prediction, the network penetration above 4G in major Southeast Asian countries will continue to increase. It is estimated that Singapore’s 4G and 5g penetration rates will be 42% and 57% respectively in 2025, while Malaysia’s will be 80% and 19%. The rest, including Indonesia, Thailand and the Philippines, are higher than the global average, second only to China, Japan, South Korea, Australia and New Zealand in the Asia Pacific region.

In terms of economic level, the economic aggregate and growth of Southeast Asia are relatively stable. Among them, the per capita GDP of Singapore and Brunei is relatively high, but Brunei is a small country. Singapore, Indonesia, Thailand, the Philippines, Vietnam and Malaysia have a large GDP. Meanwhile, the expected GDP growth rate of the above six countries in 2022 is higher than that of other countries in the region such as Laos and Myanmar.

Therefore, Singapore, Indonesia, the Philippines, Vietnam, Thailand and Malaysia are the countries recommended to focus on when China’s Internet goes to sea in Southeast Asia.

The white paper focuses on Indonesia, Thailand and Singapore.

Indonesia: with the rapid development of Internet and network infrastructure, the industry layout needs to be vertical. In terms of Internet and network infrastructure, in 2021, the Internet penetration rate of Indonesia has reached 72.9%, higher than the world average. At the same time, users spend an average of 8 hours and 36 minutes online every day, ranking the ninth in the world, second only to some households in Latin America and sub Saharan Africa. In addition, despite the current poor overall network speed level in Indonesia, with the country’s continuous attention and investment in Internet infrastructure, the user network environment will be further optimized to benefit the mobile terminal market.

In terms of industry recommendation, Chinese enterprises can give priority to the game, e-commerce, pan entertainment, financial technology and tool industries. Among them, at the game level, Indonesia is one of the main target markets for Chinese enterprises to go to Southeast Asia. Many categories such as SLG and RPG have been successful, and the market competition is becoming increasingly fierce. On the one hand, it is suggested that Chinese enterprises focus on the optimization of cash flow mode to stimulate consumer demand; On the other hand, the R & D project was initiated in combination with local user preferences (in combination with excellent Chinese IP with a wide audience), and the strategy was optimized in terms of project initiation and investment to control costs and avoid large-scale investment.

Thailand: the Internet environment and network infrastructure are good, and the game payment ability is strong. In terms of Internet and network infrastructure, Thailand’s Internet penetration rate reached 79.0% in 2021, far higher than the world average and the level of many countries in the same region. At the same time, users spend an average of 9 hours and 6 minutes online every day, ranking the seventh in the world and second only to the Philippines and Malaysia in Southeast Asia. In addition, the Internet speed of Thailand is at the upper middle level in Southeast Asia, and the fixed end Internet speed ranks the third in the world. However, there is still room for the mobile end download and upload speed to rise. It is expected that the network conditions will be further improved in the future.

In terms of industry recommendation, Chinese enterprises can give priority to the game, e-commerce, financial technology and tool industries. Among them, at the game level, Thai users have a strong willingness to consume game products. In 2021, ARPU reached $60.06, far exceeding most countries in Latin America and Southeast Asia. At the same time, the composite play SLG is more consistent with Thai players who have strong spending power and high willingness to pay. In addition, the secondary category has successfully opened the Thai market, and Chinese enterprises can pay attention to the project approval of differentiated style products.

Singapore: the Internet infrastructure is leading in the world, and the industry is relatively mature. In terms of Internet and network infrastructure, Singapore’s Internet penetration rate reached 89.7% in 2021, ranking first in the world. At the same time, users spend an average of 7 hours and 29 minutes online every day, a year-on-year decline of 38 minutes, ranking 18th in the world, only slightly higher than the global average. In addition, Singapore ranks 20th in the world in terms of mobile terminal network speed, with download and upload rates of 67.99 and 14.29mbps. In the future, Singapore will continue to rank first in the world in terms of network speed.

In terms of industry recommendation, Chinese enterprises can give priority to the game, e-commerce and fintech industries. Among them, at the game level, mobile game users in Singapore have strong willingness and ability to pay, with ARPU of US $96.77, which is in line with the performance of mature mobile Internet users. As a region widely influenced by Chinese culture, various traditional IP and cultural contents have been widely spread in Southeast Asia, especially in Singapore.

Latin America

The users in Latin America are large and young, and the economic growth is stable. The focus is on Brazil, Mexico, Argentina, Chile, Colombia and Peru.

From the perspective of user base, Brazil and Mexico have a large population base and relatively young population. At the same time, the per capita length of Internet use ranks among the top in the world. Brazil and Mexico are the main countries in Latin America. Their population is large and growing continuously. There is still a large demographic dividend. There is room for market demand to rise; In terms of per capita Internet use time, the average daily Internet use time of users in Brazil and Mexico is more than 8 hours, ranking third and fifth in the world respectively, far exceeding the global average of 7 hours. That is, Brazil and Mexico are countries with large Internet demographic dividends in Latin America.

From the perspective of network infrastructure, the network speed and infrastructure in Latin America are gradually improving. At this stage, the Internet penetration rate of Argentina, Brazil, Mexico and other major Latin American countries exceeds the world average, and the Internet penetration rate is high. Although the network speed in Latin America is low due to network facilities, network speed, price and other factors, GSMA predicts that the network speed and infrastructure in Latin America will witness rapid development in the next five years. The penetration rate of intelligent devices will increase from 72% to 81%, the overall penetration rate of 4G and 5g networks will increase from 55% to 79%, and the number of mobile network users will further increase. Among them, Brazil and Mexico will achieve 79% and 54% 4G coverage, and 20% and 14% 5g coverage.

In terms of economic level, the economic aggregate of Latin America has maintained a relatively stable growth trend. Among them, Brazil and Mexico are the two major economies in Latin America with relatively high economic aggregate and good economic foundation. In addition, the per capita GDP of Chile and Argentina is higher than that of Brazil and Mexico, but their population size is small.

Therefore, China’s Internet goes to Latin America, and the countries recommended to focus on are Brazil, Mexico, Argentina, Chile, Colombia and Peru.

The white paper focuses on Brazil and Mexico.

Brazil: the Internet economy has great potential for development and has bred a large number of financial technology unicorns. In terms of Internet and network infrastructure, Brazil’s Internet penetration rate has reached 75.7%, higher than the world average. At the same time, Brazilian users spend an average of 10 hours and 19 minutes online every day, ranking the third in the world, and are highly dependent on the Internet. Although the network facilities in Brazil are not yet perfect, the mobile and fixed network speeds are at a lower level than those in the world. However, the Brazilian government is actively promoting the national plan for the Internet of things, and the overall network level will be rapidly improved in the next five years.

In terms of industry recommendation, Chinese enterprises can give priority to the financial technology, e-commerce, pan entertainment and game industries. Among them, in terms of fintech, the increase in user demand and favorable policies have promoted the rapid development of fintech business in Brazil, and the related businesses such as digital banking, trading, insurance and lending have great development potential. Brazil’s financial services have been in an oligopoly for a long time. The five traditional banks occupy the main market, and the huge demand of users for inclusive financial services has not been met. In addition, Brazil has gradually reformed its financial technology regulations in recent three years, promoting the accelerated development of financial technology business.

Mexico: the Internet population is large, and finance and e-commerce are developing rapidly. In terms of Internet and network infrastructure, the Internet penetration rate in Mexico reached 64.86% in 2021, which is higher than the world average. At the same time, Mexican users spend an average of 8 hours and 55 minutes online every day, ranking the eighth in the world, and are highly dependent on the Internet. Although the network infrastructure in Mexico is still relatively backward, the network speed is at a low level in the world. However, Mexican authorities are accelerating the layout of 4G and 5g networks. It is expected that the network speed in Mexico will be further improved in the future, providing network guarantee for the rapid development of the Internet.

In terms of industry recommendation, Chinese enterprises can give priority to the financial technology, e-commerce, pan entertainment and game industries. Among them, at the level of fintech, the huge demand of users for fintech services and the strong support of the government have promoted the rapid development of fintech business in Mexico, which has become one of the major fintech systems in Latin America. Credit, payment, insurance and other businesses have great development potential.

Middle East and North Africa

Middle East and North African countries are relatively affluent, with young users and strong Internet demand. They focus on Saudi Arabia, the United Arab Emirates, Turkey, Israel, Qatar and Egypt.

From the perspective of user base, the leading countries in the Middle East and North Africa have a large population and a high growth rate. At the same time, the per capita length of Internet use ranks first in the world. Egypt, Iran, Turkey and other major countries have a large population base, and the population growth rate is higher than the global average; In terms of online hours, users in the United Arab Emirates, Saudi Arabia and Turkey use the Internet for about 8 hours a day, higher than the global average. In addition, the Middle East and North Africa as a whole is the second largest young region in the world, and the group of generation Z has strong demand for entertainment and social networking.

From the perspective of network infrastructure, the overall network infrastructure level in the Middle East is at the forefront of emerging markets. The UAE and Saudi Arabia ranked first and seventh in the world in terms of mobile terminal network speed, and 19th and 39th in the world in terms of fixed terminal network speed. According to GSMA prediction, by 2025, 4G and 5g network signals in Gulf countries (including Saudi Arabia and the United Arab Emirates) will reach 70% and 21% respectively, and network facilities will continue to be improved. In addition, although some network facilities in the Middle East are still not perfect, relevant government departments are accelerating the construction of network facilities, and the network environment will be further improved in the future.

In terms of economic level, the economic aggregate and growth of countries in the Middle East and North Africa region are relatively stable. In terms of total GDP, the countries with large scale are Iran, Saudi Arabia and Turkey. In terms of per capita GDP, Qatar, Israel, the United Arab Emirates, Saudi Arabia, Iran and Turkey have relatively high per capita GDP. Among them, the per capita GDP of Qatar and Israel exceeds 50000 US dollars, but their population size is small and their development potential is limited. At the same time, the current economic level of Iran is still good, but it is affected by the dual factors of U.S. sanctions and the impact of the epidemic, and there are many uncertain factors in the economic outlook. Chinese enterprises need to be more cautious in the layout of Iran and carry out relevant cooperation in an appropriate and orderly manner.

Therefore, China’s Internet goes to the Middle East and North Africa, and the countries recommended to focus on are Saudi Arabia, the United Arab Emirates, Turkey, Israel, Qatar, Egypt and Iran.

The white paper mainly focuses on Turkey, Saudi Arabia and the United Arab Emirates.

Turkey: network infrastructure is conducive to mobile Internet, and e-commerce is growing rapidly. In terms of Internet and network infrastructure, Turkey’s Internet penetration in 2021 has reached 77.2%, higher than the world average. At the same time, users spend an average of 8 hours online every day, ranking 14th in the world. Compared with other Middle East and North African countries, Turkey is second only to the United Arab Emirates, Singapore and Egypt. In addition, Turkey’s network infrastructure has been relatively complete, with 70% of users accessing the Internet through mobile terminals.

In terms of industry recommendation, Chinese enterprises can give priority to e-commerce, games, pan entertainment and fintech industries. Among them, at the e-commerce level, the e-commerce market in Turkey has developed rapidly under the influence of the epidemic, with a significant increase in scale. Consumer electronics, fashion, toys / hobbies / handicrafts are more popular with users. At this stage, Turkey’s current logistics performance index ranks among the top in the world. It will be more perfect in the future, and its logistics efficiency and infrastructure will continue to improve. In the early stage, Chinese enterprises can take the vertical e-commerce as the starting point, cooperate with local mature logistics enterprises or build their own overseas warehouses to provide excellent distribution timeliness services and attract users.

Saudi Arabia: the average online time of users continues to grow, and the acceleration of infrastructure is good for e-commerce. In terms of Internet and network infrastructure, in 2021, Turkey’s Internet penetration rate exceeded 90%, far higher than the world average. At the same time, users spent an average of 8 hours and 5 minutes online every day, ranking the 11th in the world, with a year-on-year increase of 20 minutes. Compared with other middle East and North African countries, the Middle East region is second only to the United Arab Emirates. In addition, Saudi Arabia’s network infrastructure has been relatively complete, with 74% of users accessing the Internet through mobile terminals.

In terms of industry recommendation, Chinese enterprises can give priority to e-commerce, games, pan entertainment and fintech industries. Among them, at the e-commerce level, the Saudi e-commerce market is in a period of rapid development, and consumer electronics, fashion, beauty / health / personal care categories are more popular. Sheen, chicpoint and other brands focus on localized operation, and the e-commerce downloads are high. In the layout, Chinese e-commerce companies can follow the example of sheen and chicpoint and launch products that cater to local culture in combination with the purchase characteristics of local users. In addition, although Saudi Arabia still has some pain points such as slow distribution in the “last mile”, Saudi Arabia is gradually accelerating the construction of logistics infrastructure, and this pain point will be gradually solved.

UAE: the infrastructure level remains ahead and the industrial development continues to accelerate. In terms of Internet and network infrastructure, the UAE’s Internet penetration reached 96% in 2021, far higher than the world average. At the same time, users spend an average of 8 hours and 36 minutes online every day, ranking the 10th in the world. The development of the Internet environment has been relatively mature. In addition, the UAE has complete network facilities and fast network speed, which is conducive to the layout of Internet business by enterprises.

In terms of industry recommendation, Chinese enterprises can give priority to e-commerce, games and fintech industries. Among them, at the e-commerce level, the logistics infrastructure in the UAE is relatively complete. In addition to the impact of the epidemic, the e-commerce market in the UAE is growing rapidly, and consumer electronics, fashion, toys / hobbies and handicrafts are favored by users. At this stage, the UAE currently ranks among the top in the world in terms of logistics performance index, which will continue to be improved in the future to benefit the development of e-commerce industry. In addition, sheen and fordeal brand e-commerce have a high number of downloads. Localization operation (Sheen sets up a Middle East design group, fordeal localizes the language and establishes a local warehouse) makes these e-commerce have a high reputation in the local area. Chinese funded enterprises should pay attention to localization operation when laying out e-commerce business in Saudi Arabia, and may consider attracting users with strong payment ability by providing high-quality products and services.

Sub Saharan Africa

Sub Saharan Africa has the youngest population and sustained economic growth, focusing on South Africa, Nigeria, Kenya, C ô te d’Ivoire, Ghana and Tanzania.

From the perspective of user base, sub Saharan Africa has a relatively high overall natural growth rate and is the region with the youngest overall population in the world. Nigeria is the only country with a population of more than 100 million (217million), followed by South Africa, with a population of more than 60million, while Tanzania (2.98%), C ô te d’Ivoire (2.57%) and Nigeria (2.57%) have a natural population growth rate that exceeds the average level in Africa, and the population of the first two exceeds 20million. In terms of the median age of the population, South Africa, which is slightly older as a whole, is only 28.1 years old, while Nigeria and Tanzania are only 18.2 years old. South Africa ranks first in the world in terms of the length of Internet use per capita. That is, the above-mentioned sub Saharan African countries have a large Internet demographic dividend.

From the perspective of network development, sub Saharan Africa has great potential for overall network infrastructure development. With the exception of South Africa, the Internet penetration rate of all countries is lower than the world average, the growth rate is obvious, and there is great room for development. Although the mobile and fixed network speeds are low, China, Europe and other countries and regions have begun to assist sub Saharan Africa in building digital facilities and optimizing digital services. Considering that the local market is a typical one that directly crosses the PC Internet and enters the mobile Internet, the network traffic is mainly concentrated on the mobile end, of which Nigeria, South Africa, Tanzania and Ghana are outstanding, providing a blue ocean for the development of Chinese funded mobile Internet enterprises.

In terms of economic level, sub Saharan Africa’s economic aggregate and growth are relatively stable. Among them, the per capita GDP of South Africa is significantly higher than that of other regions, while that of Nigeria, Ghana, Kenya and C ô te d’Ivoire is equivalent, ranging from 2000 to 2600 dollars. The three countries with the largest GDP are Nigeria, South Africa and Kenya. Meanwhile, Kenya’s expected GDP growth in 2022 is significantly higher than that of Nigeria and South Africa.

Therefore, South Africa, Nigeria, Kenya, C ô te d’Ivoire, Ghana and Tanzania are recommended to focus on when China’s Internet goes to sea in sub Saharan Africa.

The white paper focuses on South Africa and Nigeria.

South Africa: the most developed country in the region. In terms of Internet and network infrastructure, South Africa’s Internet penetration rate reached 60.7% in 2021, which has continued to grow in the past five years, but after reaching 60%, the growth rate has declined. Meanwhile, South African users spend an average of 10 hours and 46 minutes on the Internet every day, the highest in the world, and are highly dependent on the Internet. Although the network facilities in South Africa are still imperfect, and the mobile and fixed network speeds are lower than those in the world, the submarine optical cables and local network facilities around South Africa have been rapidly laid in recent years, and the overall network level is expected to be rapidly improved, laying a good foundation for the development of Internet business.

In terms of industry recommendation, Chinese enterprises can give priority to the financial technology, e-commerce and game industries. Among them, in terms of financial technology, South Africa’s financial market is relatively mature, and local traditional payment, savings and transaction apps rank high. There is space for the layout of relevant apps. Chinese enterprises should seek differentiated competition when entering. In addition, the business and coverage of traditional banks in South Africa are not comprehensive enough, and the South African government strongly supports the digital economy, so it is suggested that Chinese enterprises take financial technology as the preferred industry to go to South Africa.

Nigeria: the Internet has a large demographic dividend and is a popular destination for China’s financial technology to go to sea. In terms of Internet and network infrastructure, the Internet penetration rate of Nigeria will reach 52.5% in 2021 and is expected to continue to grow in the future. Meanwhile, the median age of Nigerian population is only 18.2 years old. Generation Z, as the main Internet user group, has a large demand for mobile Internet and a high degree of acceptance of new things, providing a broad young user base for the layout of Chinese enterprises. Although the current network facilities in Nigeria are still imperfect, and the mobile and fixed network speeds are at a lower level than those in the world, the Nigerian government is actively promoting the “2020-2025 National Broadband Plan” and vigorously introducing investment. It is expected that the overall network level of Nigeria is expected to be further improved.

In terms of industry recommendation, Chinese enterprises can give priority to the financial technology and e-commerce industries. In terms of fintech, both the government and the central bank pay close attention to the development of the mobile fintech industry, and many categories such as payment, credit and digital banking are developing rapidly. The credit industry is developing in a standardized way. Although the head of the market has been occupied by Chinese enterprises, there are still opportunities for layout. At the same time, it is expected that buying first and paying later will become the next outlet.

Western Europe

Western Europe has developed economy and strong consumption capacity, focusing on Switzerland, France, Germany, Spain, Italy, the Netherlands, etc.

From the perspective of user base, the overall age of the population in Western Europe is relatively mature. In addition to the characteristics of the aging trend, there are a large number of middle-aged people aged 35-50 in Western European society. The society as a whole has the advantages of stable income and high consumption level; Although western Europe does not have a large population exceeding 100 million, and its population growth rate is lower than the world average, Germany and France have a slightly dominant population, both exceeding 50million; Switzerland has a relatively high natural growth rate (0.74%), and the above three countries can provide a stable user base for the layout of Chinese enterprises.

From the perspective of network infrastructure, Western Europe has a mature foundation for the development of the Internet industry. Western European countries have a high Internet penetration rate. By April 2022, the average Internet penetration rate in Western Europe had reached 94%. In terms of network speed, Spain and Switzerland perform better; In terms of mobile network speed, the Netherlands and Switzerland are ahead of the world average, while Germany and France are close to the world average. According to GSMA data and forecasts, 4G services in Europe are quite mature. It is expected that the number of connections will reach a peak in 2022. At the same time, it is expected that by the end of 2025, Europe will have 276million 5g connections, with a coverage rate of 40%.

In terms of economic level, Western Europe, as a mature developed market, has high disposable income. The total GDP and per capita GDP of Western European countries are at a high level in the world, while Germany and France rank first and second respectively in terms of total GDP; However, Switzerland’s per capita GDP is significantly higher than that of other countries, close to 100000 US dollars.

To sum up, Switzerland, France, Germany, Spain, Italy and the Netherlands are the countries recommended to focus on when China’s Internet goes to sea in Western Europe.

The white paper focuses on Switzerland and France.

Switzerland: the infrastructure is very complete, and the consumption capacity of games, e-commerce, etc. is strong. In terms of Internet and network infrastructure, Switzerland’s Internet penetration rate is as high as 98%, which is the world’s leading level. At the same time, Swiss users spend an average of 5 hours and 44 minutes online every day, and are highly dependent on the Internet. In addition, Switzerland has relatively complete network facilities, and its mobile network speed is higher than the world average. Its large-scale medium and high-end mobile phone market provides a high-quality equipment foundation for Chinese mobile Internet enterprises to lay out boutique applications and businesses.

In terms of industry recommendation, Chinese enterprises can give priority to the game, e-commerce and pan entertainment industries. Among them, at the game level, the considerable income scale, growth rate and extremely high game consumption level make Switzerland one of the mobile game markets with broad prospects in Western Europe. From the category point of view, Chinese manufacturers have strong competitiveness in medium and heavy games. Players have high recognition of SLG, role playing and MoBa. The game revenue of state of survival, pugb mobile, rise of kings and other global games rank high. With the strong consumption ability of Swiss players, Chinese game manufacturers can choose Switzerland as the first choice when issuing international games.

France: the market scale is relatively large, and the e-commerce and game vertical markets are developing rapidly. In terms of Internet and network infrastructure, France’s Internet penetration rate is as high as 93%, leading the world. At the same time, French users spend an average of 5 hours and 34 minutes online every day, slightly lower than the world average, but the online time is still increasing. In addition, France’s network facilities still need to be improved. However, in March 2022, France issued a 3.8 ghz-4.0 GHz dedicated frequency band policy, which will enhance France’s 5g competitiveness in Europe and provide more practice for global enterprises to build their own 5g private networks.

In terms of industry recommendation, Chinese enterprises can give priority to e-commerce, games and pan entertainment industries. Among them, at the e-commerce level, the overall logistics infrastructure in Western Europe is good, and the epidemic has accelerated the development of the French e-commerce market. The French e-commerce market is keen on fashion categories. At present, users mainly purchase online through the computer terminal, but the trend towards the mobile terminal is strong. The “overseas shopping” craze among French consumers was at that time. China’s cross-border e-commerce was the largest seller, but there were also challenges in terms of language, culture and comprehensive information. That is, the language and supply completeness of Chinese enterprise platform e-commerce were slightly inferior to those of France and Europe. Therefore, when Chinese e-commerce companies enter France, they can avoid the platform playing method and choose vertical e-commerce for layout. Refer to the successful playing methods of fashion (sheen, cider) and mother baby (patpat) categories.

Although Chinese enterprises face many opportunities to go to sea, there are also macro challenges such as security compliance, infrastructure, localized operation and local ecology: (1) security compliance: under the tide of privacy and data protection legislation, 80% of countries / regions in the world have or are in the process of privacy and data protection legislation, and Chinese enterprises need to build a perfect and effective data compliance system; (2) Infrastructure: the global resource layout, network delay, business guarantee reliability and service response timeliness are uneven. Large differences and defects have hindered Chinese enterprises from going to sea. Chinese enterprises need more reliable cloud services to go to sea in emerging markets; (3) Localization operation: facing the global diversity of languages, nationalities / religions, folk customs, etc., Chinese enterprises need to run localization operation through the whole process of business design, promotion and operation; (4) Local ecology: in order to better cope with the risks of overseas logistics facilities, network communication, user payment, exchange gains and losses, Chinese enterprises need to establish a local comprehensive ecology, and work closely with local ecological partners to better cope with the risks and achieve stability.

In this context, it will be easier for Chinese enterprises to find suitable service providers in the process of going to sea. Huawei cloud has six capabilities, which can escort Chinese enterprises to the sea to make steady progress:

 (1) global layout and localization services: Huawei cloud operates 65 availability zones in 27 geographical regions around the world, covering more than 170 countries and regions around the world, and can provide a 50ms user experience service circle;

(2) In depth and extensive cloud services: Huawei cloud currently provides more than 220+ cloud services, 210+ solutions, and provides a global network to create the best experience of infrastructure as a service. Huawei cloud, with its in-depth and extensive cloud services, enables overseas enterprises to innovate and transform;

(3) Leading the industry’s security compliance system: Huawei cloud has accumulated a lot of experience in compliance and privacy protection of global open services. It can provide enterprises with data and personal privacy compliance consulting such as the EU general data protection regulations gdpr and the personal information protection law, and realize automated compliance inspection to help customers manage compliance efficiently;

(4) Intelligent services enabling local operations: for the localization demands of overseas enterprises in the production, marketing and after-sales stages, Huawei cloud has built four intelligent localization capabilities of application cross-border testing, intelligent translation, multilingual character recognition and intelligent automation, and has cooperated with ecological partners to provide comprehensive support services and technical support to Chinese overseas enterprises to help them carry out localized operations;

(5) Traffic aggregation platform that helps business growth: facing the difficulties of traffic growth, expensive marketing and promotion, and difficult user retention and transformation faced by overseas enterprises, Huawei cloud cooperates with Huawei terminal cloud services, and “cloud cloud collaboration” helps overseas enterprises achieve traffic aggregation, rapid business growth, and continuous brand exposure;

(6) 38000+ global ecological partners: Currently, Huawei’s cloud partner system covers 16 industries including cross-border e-commerce, games, pan entertainment, social media and financial technology in vertical industries, and five aspects from marketing to management from the perspective of functional level. The comprehensive marine ecological partner system can help enterprises quickly build their own businesses overseas and improve landing efficiency.

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