China Internet Development Report

Last month, the Internet Society of China published its annual China Internet Development Report (“Report”). The Report covered industries including online video streaming, online gaming, mobile applications, online travel booking and more, and here are some key points from the Report.

The Growing AI Market

The AI industry in China has reached 33.9 Billion Chinese Yuan (approximately 4.8 Billion USD), up 52.8% from the previous year. The top two verticals utilizing AI are facial recognition and intelligent voice detection, each taking 34.9% and 24.8% of the market.

Where Did Internet Users Spend Money Online on Mobile?

Back in 2011, more than half (66.8%) of online spending was to purchase Internet data plans. Seven years later, in 2018, the spending pattern has shifted with online shopping being the number one spending category. The mobile online shopping market has a scale of 8.85 Trillion CNY (approximately 1.25 Trillion USD). In addition to shopping, Chinese Internet users have also spent a significant amount on entertainment and lifestyle services.

The Number 1 App in China

With a penetration rate of 93.19%, the Super App WeChat has accumulated the most users in China. The Tencent-owned app started out as an instant messaging app but has since become a Super App, offering features from sending money to booking trips to paying utilities to play games. However, when it comes to comparing the average time people spent in an app, WeChat comes in second after Toutiao, a news service app.

Internet Users in Different Regions Have Different Preferences

According to the Report, residents in Tier 1 cities spent more time on banking, payment and stock apps than residents in Tier 2 and below cities. In addition, podcast and audiobook apps are more popular in Tier 1 cities, whereas gaming and video apps are more popular in lower-tier cities.

Mobile Gaming Market Slows Down

Since the months-long freeze period of game approvals which ended in early 2019, the government has enforced stricter rules on games, and the growth of the gaming market has slowed down. Mobile gaming accounted for 66.8% of the total market, and the growth rate dropped 35% comparing to the previous year.

Paid On-Demand Video Market Is Growing

Major video streaming companies in China launched paid on-demand video content back in 2010, but the growth has been slow until recently. In 2018, 53.1% of all users of video platforms are paid users, a 23.8% increase from the previous year.

Come back often to see more blog posts about what’s going on in China!