Social networking audience grows in China

06 August 2010

BEIJING: The social networking audience has grown by almost a fifth in China during the last year, new figures have shown.

According to the China Internet Network Information Center, a government agency, the country's online population now stands at 420m people, an uptick of 36m since the start of 2010.

Some 98.1% of this group have access to broadband services and a further 66% log on to the web using a mobile phone, with the typical consumer spending 19.8 hours surfing the net each week.

More specifically, CNNIC revealed that the number of visitors received by social networks like Kaixin001 and Renren climbed 19.6% year-on-year, to 210m, in July 2010.

Estimates from Analysys International, the research firm, suggest this total will expand to 510m in 2011, when portals in the category are set to deliver revenues of 979m yuan ($145m; €110m; £91m).

A recent report by Macquarie Equities Research argued the future of the online sector in China would be dependent on continued growth in reach.

"The size of the market really matters in this industry. Internet companies are classic examples of extreme scalability and where value should rise rapidly as the user base grows," its study stated. 

As 35% of Chinese netizens are teenagers, and 32% are in their twenties, the approach to monetisation may also differ substantially from the US and Western Europe.

"Rather than being a corporate advertising-driven market, revenues are generated from youth entertainment-related services such as games," Macquarie said.

Data sourced from Daily/MarketWatch; additional content by Warc staff