Internet Development in China
July, 2014
01
General situation
02
Individual network application
China has had 632 million internet
users, with more than 40% penetration rate.
632 million Internet users, 46.9% Internet penetration rate.
By the middle of June 2014, China has had 632 million Internet users, and the number of
new internet users during the previous half year is 14.42 million.
The Internet penetration rate has reached 46.9% in China, increasing 1.1% compared to
that of last year.
Transformation of non-Internet-users is
becoming more difficult obviously.
People with low levels of education and high ages
tend to have higher intention of Internet surfing.
Intention of non-Internet-user
population to surf the Internet is low
527 million mobile Internet users
The Size of China's Mobile Internet
Users has reached 527 million.
From device-pulling to demand-driven
 The replacement of functional mobile devices with
smartphones was basically completed, and smartphones'
pulling effects on the growth of Internet penetration were
weakened.
手机网民发展进入新阶段：
 For a period of time in the future, the growth of mobile
Internet users in China will mainly rely on innovative
mobile applications which cater to the potential network
demands of non-mobile Internet users.
Mobile phone exceeds PC for the first time,
enhancing No.1 Internet terminal device role.
By June 2012
80%
73.4%
By June 2014
Internet access devices of
70.7% Internet users
69.3%
72.2%
100%
80%
60%
46.8%
45.1%
60%
40%
40%
20%
Internet access devices of
Internet users 81.0%83.4% 81.70%
80.9%
69.7%69.6%
44.1%
43.7%
20%
0%
0%
desktop
computer notebook
computer mobile
台式电脑
笔记本电脑
手机phone
2011.12
2012.6
desktop
computer 笔记本电脑
notebook computer手机
mobile phone
PC
台式电脑
PC电脑
2013.12
2014.6
01
General situation
02
Individual network application
Mobile business applications boosting,
entertainment applications fast increasing
Acquisition of
information
Search
Search
Online news
Online news
77.00%
74.16%
Instant
Communication
Semiannual Growth Rate of
Users Size
Usage Rate of Mobile Phone
Applications
87.13%
Blog/per
Socioal
E-mail
BBS
6.6%
6.6%
-4.0%
35.77%
-13.2%
25.4%
16.6%
28.13%
24.5%
13.07%
Online music
67.28%
Online
Online vedio
Entertainment
Online game
55.74%
47.78%
Online literature
11.2%
42.14%
21.8%
19.1%
16.9%
9.8%
Online shopping
38.89%
42.0%
Online payment
38.91%
63.4%
Business
Transactions
E-banking
Group purchase
Travel booking
34.75%
19.39%
14.3%
56.4%
25.5%
65.4%
Mobile search is still growing
rapidly.
Among mobile communication
applications, social networking sites
scale appear prominent shrink.
.
With the continuous improvement
of the network environment, high
flow activities of users on the PC end
shift to applications on mobile
terminal at increasing speed.
Mobile music, video, games,
growth rates appear faster growth
Overall mobile phone business
applications grow fast.
Mobile payment breaks through
mobile business applications, driving
the whole mobile business market to
thrive.
Instant messaging is still ranked first in the
network applications.
万人
86.2%
89.3%
53215
56423
0
Instant messaging use rate
increases steadily
100%
Instant messaging users scale up to 564 million, with
semiannual growth rate of 6.0%, and use the rate of
89.3%, which is the highest.
Instant messaging users firmly occupy the throne of
the No.1 usage, and increases steadily.
0%
2013.12
2014.6
scale of users of instant messaging
Mobile instant messaging Usage lowland drives growth
Mobile instant messaging users is 459 million, with
semiannual growth rate of 6.6%, and use rate of
万人
50000
71.8%
87.1%.
22809
Mobile instant messaging usage has been lower
83.1% 83.0% 83.9% 85.7% 86.1% 87.1%
29549
32231
35215
39735
43079
100%
45921
50%
than the PC instant messaging usage, along with
constantly updating of low-end mobile phones by
smart
phones,
and
the
obstacles
of
instant
communication development have been disappearing.
0
0%
2011.6 2011.12 2012.6 2012.12 2013.6 2013.12 2014.6
scale of users of mobile phone instant messaging
use rate of mobile phone instant messaging
Both users scale and usage of traditional social
networking site continue to decline
Development of traditional social
networking sites is not optimistic
scale of social networking sites…
50000
47.6%
48.8%
40000
30000
24424
27505
60%
45.0%
27769
40.7%
25722
50%
40%
30%
20000
20%
10000
10%
0
0%
2011.12
2012.12
2013.12
2014.6
 Development of traditional social networking
sites is not optimistic, but the vertical segments of
social networking sites gain a rapid development,
among which, professional networking sites develop
rapidly, expectably becoming the next capital
competition field.
 As a basic element of Internet applications,
social communicaion, has been integrated with other
applications, which has become normality..
Traditional ‘social networking sites’: Refers to narrow
definition of the social networking site, similar to Facebook,
based on the user's social relations so as to provide a
communication and exchange platform. These sites encourage
users to provide general factual information as possible.
Online
shopping
By June 2014, the scale of China's traditional social
networking site users is 257 million, presenting a
reduction of 20.47 million by the end of 2013, with a
decrease of 7.4%. Use rate of Internet users who use social
networking sites is 40.7%, with 4.3% decrease by the end
of last year.
Online
Online
video
payment
Socioelements
Online
game
search
Mobile phone game driving whole game market growth
Mobile phone game drives
whole game market growth
万人
40000
54.7%
30000
43.1%
20000
10000
58.2%
60%
47.8%
40%
36811
33803
21535
50%
30%
25182
20%
10%
0
0%
2013.12
2014.6
scale of users of online game
scale of users of mobile network game
use rate of online game

The number of mobile phone game users is 368 million,
half year growth is 36.48 million, with usage increasing from
43.1% to 47.8%.

According to the overall development trend of China's
game industry, it has gradually walk away from the period when
online game dominates. Due to further deregulation of game
policies, networks improvement and gaming devices
diversification, as well as combination of games, television,
literature and other industries, the game industry will develop
further in future..
Developing directions: With the relaxation of
the policy, and somatosensory games, video
games, wearable gaming devices and other
new forms of game development and
introduction, game industry in China will
present a more diverse development
pattern.
Online shopping penetration rate over 50%, mobile end
shopping achieving explosive growth.
online shopping market has developed rapidly, with
mobile online shopping expanding the growth space.
Number of users and use rate of
online shopping
万人
40000
48.9%
52.5%
By June 2014, China's online shopping users reached 332
million people, online shopping usage increased to 48.9% from
52.5%.
60%
50%
30000
20000
38.9%
28.9%
30189
10000
14440
40%
30%
33151
20499
0
Mobile shopping users reached 205 million, with semi-annual
growth rate of 42%, reaching 4.3 times the size of the overall
online shopping user is online shopping growth rate, and mobile
phone shopping usage increased from 28.9% to 38.9%.
20%
10%
0%
2013.12
2014.6
scale of
scale of
use rate
use rate
users of online shopping
users of mobile network shopping
of online shopping
of mobile network shopping
Online shopping security
Honesty environmental
efforts strengthened
improved
The government and
"New consumption" law
enterprise to rectify the
claims no reason to
market, the fight against fake
return within 7 days
Logistics efficiency
Service level
Competition of who deliver
the farthest or fastest
services to consumers
driving forces of online shopping growth
Awareness of online
transaction increasing
Online shopping
penetration rate over 50%
Promote mobile terminal
Convenient payment function
and more margins of
preference than PC end.
Basic
development
environment
Application mode innovation
Based on big data applications launching
C2B customized pattern matching
personalized demands.
Mobile terminal drives online payment into
rapid development channels.
Number of users and use rate of
online payment
40000
万人
42.1%
46.2%
Mobile payment user scale growth rate is 5.2
60%
50%
30000
38.9%
20000
10000
28.9%
26020
14440
40%
30%
29227
20499
0%
2013.12
scale of
scale of
use rate
use rate
By June 2014, the user scale of China's online payment has
risen up to 292 million, with a semiannual growth rate of 12.3%,
and the use rate has increased from 42.1% to 46.2%. Online
payment is the fastest growing network application.
20%
10%
0
times of that of the overall market.
2014.6
users of online payment
users of mobile network payment
of online payment
of mobile network payment
Online shopping and
travel booking drives
the rapid growth of
online payment
development.
Linkage effect
Mobile phone payment users scale up to 205 million, the semi
annual growth rate of 63.4%, the use rate increased from 25.1%
to 38.9%. Mobile phone online payment is the fastest growing
mobile phone network application.
Main driving forces of online
payment growth
The rapid
development of
mobile payment
substitutes the offline
payment.
Secure environment and
secure performance of
payment tools have been
promoted to further
enhance safety.
Substitution effect Psychological effects
Due to release of leisure travel potential, online trips
booking achieves rapid growth.
Number of users and use rate of
online travel booking
30,000
30.0%
29.3%
18960
18077
35%
25%
20%
15,000
10,000
has fastest growing
30%
25,000
20,000
Scale of netizens who book trips online
+4.9%
15%
10%
5,000
5%
0
0%
2013.12
2014.6
number of users of online travel booking
utilization ratio
By the end of June 2014, the number of netizens who
have experiences of online booking of train tickets, air
tickets, hotel rooms or trips has reached 190 million,
increasing 8.83 million during a half year, with a
growth rate of 4.9%.
Comparison of classified online travel
booking applicaions rates
Main driving forces of travel booking
China encourages enterprises to use cloud computing
technology, Internet / mobile Internet, intelligent terminal and
other advanced means to enhance user experience.
Social capital / industry mergers and acquisitions to enhance
the overall service level.
A large number of offline bookings have been transferred to
online services, due to tourism products improvement, stronger
enterprise promotion efforts, and spreading APP applications.
train tickets
24.6%
23.9%
air tickets
12.1%
11.7%
hotel rooms
-0.7%
10.2%
10.7%
trips
6.3%
8.1%
0%
5%
10%
2013.12
+1.8%
15%
20%
2014.6
25%
30%
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