Digital gains ground in China

21 January 2011

BEIJING: The number of Chinese consumers engaging in digital activities like social networking and ecommerce rose dramatically last year.

According to government body the China Internet Network Information Center, an additional 73.3m people went online for the first time in 2010, taking totals to 457m overall.

Penetration has thus expanded to 34.3%, and 125m residents from rural parts of the country are now connected, up 16.9% year-on-year.

On average, netizens dedicated 18.3 hours to this medium per week, with 45.7% surfing via laptops, a jump of 15 percentage points.

Search engines, a field led by Baidu, boasted 375m regular visitors, equivalent to 81.9% of the potential audience based, measured against 73.3% in 2009.

Membership levels of social networks such as Renren and Kaixin001 climbed 33.7%, posting 235m, still behind blogs on 295m after a similar improvement, and instant messaging, recording 353m thanks to a 29.5% leap.

Microblogs, provided by leading operators including Sina, Sohu and Tencent, saw uptake surpass 53m, or 13.8% of the online population.

Ecommerce has also gained ground, with 161m shoppers completing transactions using this route last year, 48.6% better than 12 months earlier.

Demand for banking and digital payment services increased by roughly parallel amounts, reaching 139m and 137m respectively, CNNIC said.

Group buying portals enticed 18.8m shoppers during 2010, and interest is likely to grow further going forward.

Gaming was a pastime that appealed to an estimated 304m people, as the density of players surged 15% annually.

Video platforms, such as Tudou and Youku, secured 284m viewers, with official broadcaster CCTV currently attempting to move into this space.

Elsewhere, 303m individuals logged on to the web through a mobile phone, a lift of 69.3m, although the rate of acceleration had actually slowed.

Some 65.7% of this cohort accessed the net from a handset at least once a day and 32.5% made repeat visits.

Instant messaging attracted 67.7% of wireless users, while news alerts scored 59.9%.

"The traditional sectors have underpinned internet growth over the past ten years," said Lu Benfu, of the Chinese Academy of Sciences' School of Management.

"In the next ten years, the internet will feed the traditional sectors."

One substantial challenge is the comparatively low speed of Chinese connections, at 100.9 kilobytes per second, around half the global norm.

Another trend outlined by the report was a 41% decline in domain registrations - a result attributed to tighter government scrutiny and greater consolidation.

"The decrease in the number of websites shows that major web portals dom­inate the industry," said Liu Yong, of Business Review magazine.

"They have gained a more competitive advantage. Forming coalitions is a more appropriate direc­tion for small websites."

CNNIC's data were premised on interviews with 60,000 people, and 5,103 companies.

Data sourced from Xinhua, Pacific Epoch, Global Times; additional content by Warc staff