Ten Trends of Internet Development in China

On February 3rd, 2015, China Internet Network Information Center (CNNIC) released the 35th Statistical Report on Internet Development in China, in which ten trends and characteristics of Internet development in China were expounded.

First, the growth rate of netizens continued to narrow, and the difficulty of transforming non-netizens continued to expand. In 2014, there were 31.17 million new netizens in China, and the growth rate was significantly narrowed. Non-netizens’ willingness to surf the Internet continues to decline. The main reason for not surfing the Internet is that they don’t know computers or networks. The lack of Internet knowledge and application skills is an important reason for the gap in Internet use between netizens and non-netizens.

Second, there are great differences between Internet regions, and the digital gap between urban and rural areas needs to be further reduced. The inter-provincial difference of Internet penetration rate decreased from 3.37 in 1997 to 0.24 in 2014, but the difference between developed and underdeveloped provinces is still obvious. Although the scale and penetration rate of netizens in rural areas are increasing, the difference of Internet penetration rate between urban and rural areas is still expanding, and the fundamental reason is the unbalanced regional economic development.

Third, tablet entertainment is preferred, and network TV opens a new mode of entertainment. The entertainment and convenience of tablet computers make it an important entertainment device for netizens. At the end of 2014, the utilization rate has reached 34.8%, and it has a higher utilization rate among people with high education and high income. Internet TV has gradually become a new family entertainment mode. As of December 2014, the utilization rate of Internet TV has reached 15.6%.

Fourth, instant messaging has a stable position and evolved into a high value-added business portal. As of December 2014, the utilization rate of mobile instant messaging was 91.2%, up 5.1 percentage points from the end of 2013. Mobile instant messaging has gradually evolved from a single communication tool to a user portal for high value-added services such as payment, games and O2O, and has provided huge potential commercial value for other services with a huge user base.

Five, the mobile phone business application broke out, and the mobile phone travel booking momentum was the fiercest. In 2014, the development of mobile commerce applications among netizens in China exploded, and the annual growth rate of users such as mobile online shopping, mobile payment and mobile banking far exceeded the growth rate of other mobile applications. Mobile phone travel booking, which has been at a low level for a long time, has an annual growth rate of 194.6% in 2014, making it the fastest growing mobile business application.

6. Internet financial management is gradually decreasing, and the scale is stable and the expansion speed is gradually slowing down. By December 2014, the number of netizens who had purchased online wealth management products reached 78.49 million, an increase of 14.65 million compared with June 2014. Due to the diversion caused by the decline in yield and the recovery of China stock market, the explosive growth of users has basically ended, and the growth rate has begun to slow down.

Seven, the popularity of enterprise Internet is high, and there is much room for improvement in practical application. In enterprises that use the Internet for office work, the access rate of fixed broadband has exceeded 95% for many years, but there is still much room for improvement in the actual application level of the Internet. The boundary between traditional enterprises and internet enterprises is becoming more and more blurred, and the internet will become an inseparable part of the daily operation of enterprises.

Eight, the first-tier cities improve the quality of O2O, and medical and housekeeping O2O needs to be released urgently. O2O enterprises take the lead in layout in first-tier cities, and quickly gather a large number of deep users by catering to users’ needs; The business layout of second-and third-tier cities is gradually expanding, and the huge consumption potential will make the market enter the stage of incremental growth. The development of medical and housekeeping O2O has just started, with strong user demand and great development potential.

Nine, mobile phone network video exceeds PC, and network video has entered a period of steady development. In 2014, the overall scale of online video users was still growing, but the usage rate declined slightly; The user scale and usage rate of mobile video still keep increasing, but the growth rate has obviously slowed down, and the network video industry has entered a period of steady development. As of December 2014, 71.9% of video users chose to watch videos on their mobile phones; The usage rate of tablet computer and TV is about 23%, which is an important device for watching online video programs.

Ten, PC online games are still the backbone, and mobile online games and TV games are the highlights. PC online games attract the most valuable in-depth users and remain the backbone of the game market. The explosive growth of mobile games reached its peak in the first half of 2014, and gradually entered the reshuffle period in the second half of the year, showing a steady and declining trend. It is expected that the share will be further expanded in 2015. In 2014, the policy of lifting the ban on game consoles made video games a new market focus. However, judging from the current development trend of the TV game market, it is not the game console, but the Internet TV or "box" that will quickly occupy the market in the next year.