China’s Internet Economy Can’t Stop Growing

According to latest statistics by iResearch, China’s Internet economy reached 45.67 billion Yuan (approximately 7 billion USD) in the last quarter of 2010. The figure was up 9.9% from Q3 2010.

Judging from the data indicators, China’s overall Internet economy achieved fast growth throughout last year. The growth for each quarter was all above 50% on a year-on-year basis.

The number of Internet application services has also increased in recent years, which include Sina Weibo (China’s Twitter) and location-based service, Jiepang. Meanwhile, the number of Internet users in China has grown to a monstrous size of more than 457 million users, significantly more than the entire population in the U.S.

In Q4 2010, the online mobile segment contribution to the Internet economy rebounded to 11.5% from 10.2% in Q3 2010.

At the end of 2009, telecommunications operators began to revamp the billing channel. The change had negatively impacted the mobile Internet economy. With the revamp coming to an end, and coupled with rapid growth in the mobile industry, we can expect the Chinese mobile Internet economy to enjoy robust growth in the near future.

At the market segments level, online games made up 19.8% of the overall Internet economy, which has shrunk since 2009 Q1. In contrast, e-commerce demonstrated strong growth in the last quarter as its market share hit a whopping 35.5%. Strong growth was experienced as more traditional enterprises went online to expand their sales channel. On the other hand, China’s online advertising pie remained stagnant. Nonetheless, the big winner remains to be Baidu, which owned 71.6 % of the total online search engines revenue at US$1.2 billion.