China
Internet
Report 2019

China vs U.S. Internet

Although China’s internet penetration rate is only 60%, its sheer scale means almost three times the number of internet users as the United States. In mobile payments, the gap is even wider: more people pay with their phones in China than the entire population of the U.S.

China vs U.S.
Top Players for Key Verticals

Top Chinese
Internet Players

Source: Crunchbase, CBinsights, company filings, avcj, Caixin, Reuters, hurun. As of Jun 10, 2019

Top Chinese Startup Exits (IPO)
(Jan 2018 - Jun 2019)

Source: 21caijing, company filings. As of Jun 10, 2019

Most Active
VC Firms in China

Number of investments in China in 2018

Source: itjuzi

BAT vs TMD

The Chinese tech giants known as BAT (Baidu, Alibaba, Tencent) have built ecosystems while challengers TMD (Toutiao, Meituan-Dianping, Didi) are strengthening their core businesses.

Source: company filings, itjuzi

We identified four overarching themes last year. Here’s why they’re still relevant today.

RECAP OF LAST YEAR'S TRENDS

Source: IT Juzi, CNNIC, China National Bureau of Statistics, QuestMobile, 01caijing.com

1. China’s ‘Copycat’ Tech Industry
Is Now Being Copied

Global technology companies are now replicating successful concepts from their Chinese counterparts, from the super app to social+ ecommerce to short video.

China has pioneered the super app, a one-stop shop for services from shopping to ride hailing to money transfers to flight bookings.

Social + Ecommerce

China’s online shopping giants and startups have pioneered concepts such as group buying and live streaming.

Short video

TikTok, the short video app from Chinese company ByteDance, has taken the world by storm, being the most downloaded app on the iOS App Store for five consecutive quarters. While players like Vine pioneered this format back in 2012, Chinese companies have been the first to turn the short video concept into a success.

2. China is Racing
Ahead With 5G

China regards next-generation 5G networks – which offer faster data rates, reduced latency, energy savings, cost reductions, higher system capacity and massive device connectivity – as a chance to get out in front for the first time.

WHAT IS 5G?
The fifth generation of mobile technology means more than just faster data speeds and greater network capacity. It also provides a foundation for connecting an unlimited number of machines to one another for day-to-day communication. A 5G network will support: a million connected devices per square kilometre; transmitting a package of data with a delay of just 1 millisecond and peak data download speeds of up to 20 gigabits per second.

CHINA’S 5G ROLLOUT

China’s three telecoms operators are piloting 5G in more than a dozen cities with a total population of 167 million

CHINA LEADS THE WORLD IN 5G PATENTS

The Race to 5G

China is best positioned to win the global race to roll out 5G mobile infrastructure, according to several research firms. Almost 60% of China’s estimated technology spending of US$256 billion in 2019 will be allocated to telecommunications, according on Forrester Research findings.

3. China is Using
AI on a Massive Scale

China is rolling out AI in many areas, including access control, customized recommendations, surveillance and smart city solutions.

To know more: read How 9/11 and China’s plan for blanket surveillance created a wave that CCTV camera makers Hikvision and Dahua rode to huge success

4. Social Credit Is
Becoming a Reality in China

China is creating a system, first announced in 2014, to rank all of its citizens based on their “social credit” by 2020. The system relies on a series of rewards and punishments meant to encourage people and businesses to abide by rules and to promote integrity and trustworthiness in society at large. In reality, there is no central scoring system but a patchwork of different schemes and apps with differing criteria across provinces, cities and villages. Expect to hear more about social credit in the coming year as the deadline approaches and different local governments scramble to show that they are meeting their targets.

Millions of individuals and businesses have been labeled as untrustworthy on a growing blacklist compiled by China’s courts, restricting them from a number of activities, including accessing financial markets or travelling by air and high-speed rail.

Download the full 100+ page report
for a deep dive into 11 sectors

(Ecommerce, Content & Media, Social & Messaging, Sharing Economy, 5G, AI, Autonomous Car, Smartphones, Smart Devices, Gaming, Blockchain + Fintech)