China's
internet population hits 649 million, 86 pct on phones
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[February 03, 2015] By
Paul Carsten
BEIJING (Reuters) - China had 649 million
internet users by the end of 2014, with 557 million of those using
handsets to go online, said a government report on Tuesday, as the
world's biggest smartphone market continues its shift to mobile.
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While growth is slowing, China's total internet population still
rose by 31 million in 2014, said the report by the China Internet
Network Information Center.
Growth in mobile internet users was faster, at 57 million.
Riding this wave are some of China's, and the world's, biggest
technology companies. These include e-commerce groups Alibaba and
JD.com Inc, social networking and video games firm Tencent Holdings
Ltd, search giant Baidu Inc and smartphone maker Xiaomi Inc.
For these companies a huge part of China's potential remains
untapped, much of it in smaller cities and rural areas. The
country's internet penetration rate is 47.9 percent and rural users
only account for just over a quarter of China's total, said the
CNNIC. By comparison, in the United States 74.4 percent of
households reported internet use in 2013, according to the United
States Census Bureau.
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In good news for Alibaba and JD.com people shopping online increased
by 20 percent in the year to the end of 2014. Users of online
payment services, operated by Alibaba and Tencent, increased by 17
percent. Instant messaging, which is dominated by Tencent's WeChat
and QQ, saw users increase by 10 percent.
However, microblog use, a market dominated in China by Weibo Corp,
was down 11 percent. Last year, CNNIC reported a 9 percent decline
in users, triggering a sell-off in shares of the then-unlisted
company's parent, Sina Corp.
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But smartphone sales are flagging. Shipments in China were 389
million phones in 2014, down from 423 million the previous year,
according to China's Ministry of Industry and Information
Technology.
Foreign internet companies have also been denied an opportunity to
compete in China. Some of the world's biggest online services, like
those run by Google Inc, Facebook Inc and Twitter Inc have been
severely disrupted or simply blocked.
Nevertheless, domestic tech firms have weathered regulatory scrutiny
and the onus of self-censorship to account for more than $600
billion in total share market values.
(Editing by Greg Mahlich)
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