Web 2.0 and consumers – April 2010 Review

This monthly bulletin on all things Web 2.0 listens in to consumption as consumers themselves see and tell it online when “2-ing”. News and trends are covered under the following topics: Internet shopping & “sellsumers”, citizen advertising and crowdsourcing (brands working with consumers to promote themselves, co-create and relate), frugalistas & consumer vigilantes, micro-blogging, tech-savvy generations Y & Z, social networking and the blogosphere.








Global internet users: 2009-2020

Source: Euromonitor International from International Telecommunications Union/World Bank/Trade SourcesNote: Data from 2010 onwards is forecasted


Internet retail sales: 2004-2009
US$ billion

Source: Euromonitor International from trade sources/national statistics

In the UK, it’s add to basket – forever

UK consumers love to shop online. But it seems that they keep any goods purchased online forever, even if they could return them. A government survey, published in March 2010, revealed that more than 60% of consumers were less likely to take back goods purchased online, compared with items purchased directly from shops. Although 10% of total retail sales are now attributed to online shopping in the UK, many UK consumers do not know their rights when it comes to refunds. The survey, which is part of the “Know your Rights” campaign run by Consumer Direct, found that most consumers were, for example, not aware of the additional right of a seven-day cooling-off period when it comes to refunds

Time bound offers a draw to online bargain hunters in New Zealand

A surge of online retailers in New Zealand offering a mindboggling range of products is making it easier for shoppers to make informed decisions with their money. In line with the growing trend, Australian Internet shopping giant CatchoftheDay has launched in New Zealand this month, hoping to attract Kiwi bargain hunters with the promise of great bargains for online shoppers. The site plans to capitalise on New Zealand’s taste for internet shopping, offering daily bargains on products ranging from tomato planters to LCD TV screens. Each CatchoftheDay offer is only available for 24 hours. Managing director Hezi Leibovich is confident bargain conscious New Zealanders will be quick to take advantage of the new online shop despite recent economic setbacks. He said CatchoftheDay.co.nz is already ranked one of New Zealand’s top 10 most visited online shopping websites within days of opening.

The hidden cost of internet shopping in China

“I bought this online!” Not a new refrain to many in the connected world, but the rapid spread of China’s internet connection to its vast population means some are only now discovering this 21st century way to shop. But as with anything that grows so big, so quickly, it comes with an unwanted by-product – addiction. Li Min, a ‘wang gouzu’ (internet shopping tribe member), admits that online shopping is one of her biggest addictions. Her shopping habit over the past three years has cost her 68,400 renminbis (US$10,000), and she is not alone. According to Sina.com, an online news portal, Chinese shoppers each spend an average of US$1,460 per year online. Netizen Lisa, fan of a famous cartoon brand, bought almost every product by this brand online last year, spending over US$10,000. In a post on Sina.com, her husband laments her online shopping addiction. “She’d spend hours and hours comparing prices on different websites, in order to find the cheapest,” he says. With a wage of 3,000 renminbis (US$440), Wu’s wife spends approximately US$1,000 online in any given month. “Our home is full of her ‘war souvenirs’, not to mention stacks of credit card bills,” he added.


Brands working with consumers to promote themselves, co-create and relate.

Online adspend in selected markets: 2004-2009
US$ billion

Source: Euromonitor International from World Association of Newspapers/Jupiter Research

Crowdsourcing the creative

An interesting recent article in Wired magazine featured a discussion with John Winsor, CEO of the first ad agency (V&S) to be built on crowdsourcing principles, itself recently launched, and author of a book on co-creation (brand/consumer collaborations), “ Beyond the Brand” in 2004. In his view, crowdsourcing is a type of positive ‘digital disruption’ to traditional ways of connecting with the consumer, just like the development of mass printing was in the 15th century. Today, he argues, ad agencies are trying desperately to protect the old way of doing business while bigger cultural trends are shifting the sand below their feet. In his view, the current trends of mass-collaboration, co-creation and crowdsourcing, all based on mass connectivity, further democratize creativity. Overall, he believes that “The rise in digital connectivity has fuelled new ways to use co-creation, mass-collaboration and open-source innovation as powerful tools for business.”

Winsor’s experience of working on brand dialogues with large groups of consumers has been revealing. He observes that when outsourcing creativity, it’s easy to get overwhelmed by the number of entries when typically, only 10% of any large group of creative output is good. “In these large community crowdsourcing projects it takes a lot of creative direction. One of our core principles is “Victors” instead of “Victor” or paying many winners instead of just one. We do this with every project we run.” Looking ahead, Winsor confesses to looking forward to even more collaborative digital tools, especially video conferencing technology.

Crowdsourcing is opening up new vistas for tourists

Crowdsourcing is not just for corporations, it can also be used by individuals. For example, someone planning a trip could attempt to crowdsource their itinerary instead of utilising such ‘traditional’ tools as Lonely Planet, Hotels.com etc. According to one US blogger who tried this approach to taking a trip to San Francisco (and received well over a dozen recommendations within a week of his original post): “We could do this the traditional way and research the trip using… online resources. However, I’m not traditional. Never have been. So, I’d like to ask for your help in researching and planning my tenth wedding anniversary trip. After all, I trust you much more than… Lonely Planet.”

In a study from September 2009, it was revealed that one in five “tweets” on the micro-blogging site Twitter is brand-related. The research from Penn State University reviewed more than half a million Tweets. Brands have obviously jumped onto the social networking bandwagon; and companies don’t even need a big advertising budget for it. One blogger insightfully commented: “social media has created an opportunity for small, nimble, cutting edge firms to compete in the same arena as large established brands.”


Web-savvy Japanese housewives sabotage efforts to save economy from stagnation

Japan’s desperate fight with deflation is being undermined by a mobile phone application and an army of penny-pinching housewives. Supermarket managers across the country describe themselves as powerless to resist the new downward pressure on prices because their once-loyal shoppers have harnessed the full power of social networking to get ten yen (US$0.10) knocked off a litre of milk. More than 7,700 supermarkets in Japan are now scrutinised by the 25,000 “regional correspondents” for the Mainichi Tokubai mobile website. No special offer, no matter how small, escapes their gaze and the agglomerated information has become a devastating weapon for the hundreds of thousands of users of the site. Armed with the daily-updated database, shoppers have focused their buying attention on the cheapest products on offer that day, with an intensity that never existed before. Supermarkets have meanwhile protested against the site, which they believe is artificially engendering a destructive price war. Mainichi Tokubai users see it as revenge and a legitimate weapon of “infowar”.


The Twitter of ads

Twitter users now see advertising on the site for the first time, as the microblogging service has launched a much-anticipated plan to transform itself into a profitable business. In mid-April, the four-year-old company announced a new service called Promoted Tweets, which allow businesses to buy keywords. “Tweets” written by the company will then appear at the top of the page when a user has searched for that word, rather like on Google. The adverts, which are limited to 140 characters like all messages on the site, only appear in search results. This means users who do not search for something will not see them in their regular Twitter streams. Over time, they may appear in the stream of posts users see when they log on.

Twitter has been testing the new advertising system for some months. Dependent on the system’s success, it hopes to build a model based on “resonance” — where an ad will stay in Twitter’s system as long as other users click on the link and pass it around the site. This way it hopes only relevant advertising will appear prominently. Analysts welcomed the move, but warned that if the new advertising was poorly implemented, it would risk alienating users. Wired Magazine founder and technology commentator John Battelle said: “Twitter’s new ad platform will mark the first time, ever, that users of the service will see a tweet from someone they have not explicitly decided to follow.”


Gen Y or Millennials – the kids of baby boomers and born in the mid-1980s-mid 1990s, and Gen Z, born 1995+ and nicknamed “digital natives” – weaned on things digital with their lifelong experience of communications and media technologies.

Computer rehab for kids comes to the UK

Britain’s first internet rehab clinic for children has been founded amid fears that overuse of computers is damaging children’s health. Capio Nightingale Hospital in central London has launched the first addiction service which allows young people to go “cold turkey” from their technology compulsion. The service will be offered to children from the age of 12. Not only will children be weaned off computer games and the like, they will also be taught face-to-face social skills. The treatment package may also include a look at body image and physical health if the addiction has affected the child’s confidence, activity levels or diet


Microsoft launches Kin social phones

Microsoft has unveiled two new phones, the Kin One and the Kin Two, which aim to make the mobile experience ‘more social’ – making it easier to share photos and messages within social networks. Microsoft boasted that the new devices would help people “publish the magazine of their life”.

The Kin One is a compact device featuring a touch-screen interface and slide-out Qwerty keyboard, while the Kin Two has a larger touch-screen, bigger keyboard, more storage and a better camera. The emphasis, said Microsoft, was on creating a phone that focused on people and content rather than menus and icons.

“We saw an opportunity to design a mobile experience just for this social generation — a phone that makes it easy to share your life moment to moment,” said Robbie Bach, president of the entertainment and devices division at Microsoft. “We built Kin for people who live to be connected, share, express and relate to their friends and family. This social generation wants and needs more from their phone, and Kin is the one place to get the stuff you care about to the people you care about most.” While Joshua Topolsky, editor-in-chief of technology website Engadget said Microsoft could struggle to attract users away from rival devices such as the Apple iPhone, Carolina Milanesi, a senior analyst with Gartner, said that the Kin devices were not really designed to compete with Apple’s offering, and was targeted firmly at teenagers, although warning that the inability to download applications and games, though, could be an issue for some consumers.

India embarks on ambitious scheme to bring remote villages online

India is to embark on an ambitious scheme to provide all its 630,000 villages, no matter how remote, with broadband internet access. The plan is to use the internet to improve education and health services in areas blighted by poverty and to help to bridge the cultural chasms that still separate India’s regions and castes. It would also enable the country’s outsourcing businesses, clustered in cities such as Bangalore, to serve Western clients from the most isolated hamlets. The government-run scheme will focus initially on the northeast, an area in the grip of several insurgent battles, as well as the poorest tribal and border regions, which often lack reliable mobile telephone coverage, let alone the internet.

A deadline of May 2012 has been set for giving broadband access to every village with a population of more than 300 people. Analysts say that the target is extremely ambitious. There are just 8.8 million broadband subscribers in India, a country with a population of 1.2 billion.

Hardly any of those connections are in villages, where only about 14 per cent of adults have mobile phones, compared with more than 80 per cent in cities, according to government statistics. The national internet drive will be financed by the state-run Universal Service Obligation fund, into which private telecoms operators must pay five per cent of their gross earnings. Just under two thirds of India’s population live in villages. Mobile phone operators are seeing explosive levels of subscriber growth, but the telecoms network still connects only about 4,500 towns and cities and 65,000 villages.

Taiwan’s public urged to pray online

Taiwan’s government has urged the public to stop burning incense sticks and ritual money in honour of the dead and opt instead for online worshipping to better protect the environment. The call came ahead of the Tomb Sweeping Festival, when ethnic Chinese traditionally visit the graves of their ancestors to burn incense and paper offerings. “We can now choose to pay homage to our ancestors in a modern and environmentally friendly way by worshipping online or donating the money meant for the offerings to charities,” the Environmental Protection Administration said in a statement. Studies have found that burning paper money releases a large amount of carbon dioxide, one of the main gases held responsible for global climate change.