internet

The internet market is still growing at a very fast pace in China and it’s already the time for mergers and acquisitions here! We have learnt, few days ago, that the leading Chinese search engine Baidu was planning to acquire the second search engine Sogou earlier this year but failed to finalize the deal.

Sogou, a Not So Small Competitor

Sogou, the search engine owned by the web portal Sohu, is still a small player in the search engine field in China compare to the giant Baidu but it has been reported by Infodesk that Sogou would be considered the second player just in front of Google. In a very fragmented search engine market, where more than eight local and international platforms are competing, it comes with no surprise that some players want to gain time by choosing to grow externally and remove potential threats by acquiring some competitors.

Internet in China: A Now Mature Market

Earlier in March this year, the two video sharing platforms Youku and Toudu had announced their merge into one bigger company called Youku Toudu Inc. Currently Youku’s market share is about 25% while Toudu is about 14%, the deal is about US$ 1 Billion and will create the first video sharing platform in China with around 40% of the market share.

With all the acquisitions going on during the past months, it is very likely that the internet market in China is going to concentrate within the next months.

As expected, China Internet population surpassed 500 million in 2011.

According to the latest report published by CNNIC (China Internet Network Information Center), the country had a population of 513 million Internet users as of December 2011.

The total population of Chinese netizens increased by 56 million in 2011 (+11% year over year). Indeed, China Internet population surpassed 450 million in 2010.

Internet penetration hit 38% of the total population in 2011 (+4% year over year), a Chinese netizen being a 6+ year old resident in mainland China and having a home phone number or a mobile phone and used the Internet in the last 6 months.

Among those 513 million users, 356 million access the Internet with mobile devices (+18% year over year), that is about 37% of total population.

Regarding eCommerce, statistics show that over 194 million people now shop online. The growth is almost 21% compared to 2010.

If you can read Chinese, you can visit CNNIC website and find the entire report. 

More detailed statistics about situation of Internet in China in 2011 in a coming post. Stay tuned!

According to Chinese government, China’s online population jumped to 450 million in the end of November, representing an increase of 20.3% compared to the same period last year. 

The figure marks an increase of 30 million since July when the number of Chinese netizens was estimated to 420 million.

China has the largest online population, with an Internet penetration rate of 33.9%, slightly above the world average of 30%.

The Chinese Internet has also become a lucrative marketplace with a lot of opportunities in ecommerce.

The value of online payments is expected to reach one trillion yuan (approximately 152 billion dollars) in 2010, according to Beijing-based research company Analysys International.

In a a white paper entitled 'The Internet in China' and released yesterday, China's government defends Internet censorship and states it will continue to block access to sensitive information on the Internet.

Internet censorship, 'necessary to protect citizens'

China has been blocking many websites such as Facebook, Twitter and YouTube, considered as providers of inappropriate content.

The document confirms that censorship of this kind of websites will continue although 'the Chinese government encourages and supports the development of the network news media, providing a wealth of news and information, and shall protect the citizen's freedom of speech on the internet, to protect the public's right to know, participate, express and to supervise'.

'Laws and regulations clearly prohibit the spread of information that contains content subverting state power, undermining national unity [or] infringing upon national honor and interests,' read the white paper.

The Information Office of the State Council which published the document explains that it is the work of government and service providers to protect citizens from this material in order to 'prevent all kinds of illegal dissemination of information'.

Despite the 'Great Firewall', Chinese web users 'fully enjoy freedom of speech on the internet', according to China's government.

Internet in China has to respect Chinese laws...

China's government wants to make clear that Internet has to comply with Chinese online regulations: 'Within Chinese territory the internet is under the jurisdiction of Chinese sovereignty. The internet sovereignty of China should be respected and protected,' read a paragraph in the document.

Internet control is considered as necessary for state protection. Moreover, China warns other governments to respect its authority in this area.

'Laws and regulations [are necessary] to safeguard information security, internet, basic legal basis for all citizens. In the People's Republic of China, foreign citizens, legal persons and other organisations must comply,' concluded the white paper.

In addition, the document notes 'Chinese law prohibits any form of network hacking,' an allusion to the Google hacks for which the government has denied any responsibility. Google accused Chinese hackers of playing around with its encodings and the Gmail accounts of human rights activists.

After the US company failed to negotiate with Chinese government, Google turned off its main Chinese search engine in March 2010 and decided to redirect the traffic to its Hong Kong server.

You can also read our articles about the true reasons why Google is leaving China and how Baidu takes full advantage of Google's pull out.