Consumers in China are known for their digital savviness. For many, digital is their first choice to consume media, with much of that time spent on mobile devices. Content that was previously viewed or read through traditional media is now being consumed via digital and mobile devices.

Much like in the US, digital video is challenging linear TV as the delivery system for entertainment and advertising, and it has given rise to new video categories, including “short-form” video and live streaming.

The trio of digital powerhouses known as “BAT”—Baidu, Alibaba and Tencent—are leading the advertising market due to the popularity of their digital platforms.

• Ad spending on digital overtook traditional media in 2016. Since then, digital has only grown in its dominance as the preferred channel among advertisers in China. We expect digital ad spending to reach $61.81 billion in 2018, growing at a rate of 25.0% for the year. Digital will capture 64.6% of total media ad spending.
• Over three-quarters of digital ad spending will be allocated to mobile in 2018, with the rest going to desktops/laptops and other nonmobile devices.
• In 2018, Alibaba’s net digital ad revenues in China, derived from its core commerce as well as its video-on-demand (VOD) subsidiary Youku Tudou, will exceed $20 billion. (That’s more than Baidu and Tencent combined, and surpasses traditional TV ad spending for the first time.)
• Of the 6 hours, 23 minutes per day adults in China will spend consuming media this year, 55.5% will go to digital media (including 47.1% to internet-connected activities), followed by 39.8% to TV, 1.6% to print and 3.1% to radio.
• We forecast that slightly over a quarter of digital time will be spent watching video in 2018, rising to almost one-third by 2020.