China has kicked off 2016 with a serious milestone – more than half their 1.37 billion population is now connected to the internet, according to a report released by state-backed China Internet Network Information Center (CNNIC).
As of January first 2016, 688 million Chinese people had access to the internet, accounting for 50.3% of the population. The report also revealed that over 90% of the country’s web users access the internet through their smartphone.
China has seen an explosion in mobile-enabled services in the past three years, spurred on by massive capital injections from the country’s internet giants including Alibaba, Tencent and Baidu. Mobile services have extended across retail, banking, education, travel and lifestyle in urban centers, capitalizing on the logistics problems posed by China’s overpopulated cities.
New brand-leaders have also emerged in China’s low-cost Android smartphone sector, including Xiaomi, who experienced a meteoric rise in sales before the market slowed in 2015.
According to CNNIC, mobile payments rose 64.5% in 2015, buoyed by Alibaba’s Alipay and the release of Tencent’s Wechat Pay. Travel bookings leapt 56% as market leaders Ctrip and Qunar joined forces. Mobile shopping rose 43.9% over the same figures in 2014.
While almost half of the country’s population is yet to be connected, growth levels in the smartphone sector are unlikely to reach previous heights. China’s smartphone shipments have now dropped below 10%, according to a report from market research company IDC in December 2014, caused by saturation in the Chinese market. The report notes that China is slowly shifting to a replacement market, meaning the pool of first-time buyers is shrinking.
According to CNNIC it’s China’s youth market that continue to drive growth, with those under the age of 19 accounting for 46% of total growth in 2015.