In China, traditional SMS is becoming a tool for commerce, not chat

China User Market Research: SMS vs OTT revival

Text’s not dead.

Traditional SMS is making a comeback in China, with national volume bouncing back after several years of steady decline.

Researchers at the Chinese Academy of Social Sciences say China’s SMS comeback isn’t due to a rise in person-to-person text messaging – users still prefer WeChat and similar platforms for P2P chat – but is the result of an increasing number of A2P texts (“App-to-Person”, meaning functional texts like password verification and notifications). Sina Tech reports that:

  • SMS volume increased 14% from 2017 to 2018.
  • Volume jumped again in the first two months of 2019, up 17.3%, y/y.
  • SMS service revenue in 2018 was 6.04 billion yuan nationally, a year-on-year increase of 5.3%.

Why it matters

Those numbers are unique to China, but this phenomenon isn’t. Globally, we’re seeing SMS mature from its beginnings as a P2P chat tool into a critical enterprise communications channel.

Text messaging hit its peak in 2012, reaching an all-time worldwide high of 7.760 trillion messages, dropping off gradually in both the US and China as text lost ground to apps like WeChat and Messenger. By 2015, mobile users in the US were sending three times as many messages via Facebook Messenger and WhatsApp (combined) as they were over SMS. But as China’s national policy push to bring government services online intensifies, an increasing number of apps are turning to SMS for delivery of critical alerts and notifications.

Businesses and governments like it because:

  • It’s universal: SMS is a direct, immediate communication channel that works whether users are on WeChat, Weibo or any other social network.
  • It’s always on: SMS gets through with or without a mobile internet connection. That means it can reach low-income users who are less likely to have a data plan.
  • It doesn’t require approval: Users don’t need to add or authenticate the sender before receiving messages.

A little political context

The 13th Five-Year Plan (2015), China’s most important national policy roadmap, specifically outlined a push to bring national government services into the digital age. In the years since, the State Council has released out a series of policies and recommendations focused on accelerating e-government initiatives. As those policies are implemented on local and national levels, we expect SMS to become a central component of those services.


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