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IDC announces 2015 predictions for China’s Internet industry

Nurdianah Md Nur | Feb. 25, 2015
The predictions include the growth of O2O commerce, the rise of pan-entertainment industry with IP license as the core, and the increasing use of QR code.

Research firm IDC has released a report detailing its predictions on the key trends for China's Internet industry in 2015.

One of the four notable trends is that China's Internet will infiltrate the third and fourth tier cities. IDC foresees about 400 million Chinese rural non-Internet users to be the next wave of Internet users, with young educated people in those areas driving the adoption of smartphones and mobile Internet.

The next expected key trend involves the growth of online to offline (O2O) commerce. According to IDC, O2O will push traditional e-commerce suppliers in certain industries to extend their business from physical goods to personalised services.

Firstly, food and beverage, housekeeping, maternal and child care and education industries will be the main development directions for O2O. Secondly, traditional industries -- especially the computer, communication, consumer electronic, and the clothing apparel companies --will attract offline crowds to online stores with QR codes, and will further realise the traceability of consumer's whole service process relying on such platforms as WeChat.  Thirdly, O2O will continue to be the focus of BAT (Baidu, Alibaba, Tencent) competition. These competitors will be looking at ways to use the underlying information services, such as maps, to promote its O2O market value. However, with more industries coming into O2O competition, vertical O2O platform will face a wide range of failures after dumping in great amount of investment dollars.

IDC also predicts that pan-entertainment industry with IP license as the core will also be put into further practice this year.  As the growth of the mobile gaming market slows and that of PC gaming market stabilising, firms that traditionally rely on gaming for revenue will further explore their business growth model with economy of scale. Obtaining IP content resources via capital operations and cross-industry co-operation will thus become one of the core growth strategies. This is expected to deepen the industry cooperation of literature, film, TV, gaming and animation.

Finally, IDC expects the increasing use of QR code payment to push more non-mainstream users to use the Internet. With a new round of "cash back" promotion campaign based on mobile payment to be launched around the Spring Festival in 2015, Chinese retailers are expected to extensively use QR codes to compete.

QR code payment based on WeChat ecosystem will become the main model of networking for offline enterprises, said IDC. Meanwhile, Alipay will also further promote QR code payments, especially in the life service market, such as supermarket, convenience store and vegetable market. Mobile payment access will give priority to QR code, and seize non-mainstream Internet users like the elderly and housewives. IDC thus predicts that the turnover of mobile transactions will exceed that of PC transactions on Alibaba's "Singles' Day" in 2015, with the proportion raising to about 60 percent.


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