Although it is largely protected from foreign players such as Facebook, Google, and Twitter, the Chinese market for internet services is still fiercely competitive, and local players must work hard to stay ahead of the pack. In fact, China’s internet players are dealing with the same issues as their Silicon Valley counterparts, such as how to convert their successful service and revenue models from PC-based internet access to the mobile internet. Indeed, as China’s mobile broadband market grows, internet players have already begun to switch their business strategies to become increasingly mobile focused.
Mobile internet growth is fueled by the smartphone boom
A recent report by the China Internet Network Information Center indicated that the number of mobile internet users in China (388 million) exceeded the number of fixed internet users (380 million) for the first time in June 2012. The report also indicated that over 70% of internet users access content over their mobile devices. While the latter figure does not refer to mobile use exclusively, it does indicate the momentum behind mobile internet in China.
Much of this momentum is the result of the significant growth in smartphone use. In the report Smartphones in Emerging Markets: Shifting Landscape, Ovum singled out China as the biggest growth opportunity in terms of smartphone adoption and development not just in emerging markets, but globally.
We forecast that China will see over 250 million smartphone shipments in 2017, accounting for 17% of global volume. Both iOS and Android devices are selling in large numbers throughout China, and the improved quality of content through browsers and apps optimized for mobile is allowing consumers to enjoy superior experiences over mobile devices.