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Internet-based Consumption Rises More Than 50% in 1st Half

Consumption through the Internet on the Chinese mainland grew rapidly in the first half of this year, due largely to lower connection cost, improved services and an expanding netizen population, Hu Yanping, head of the Data Center of China Internet (DCCI), said on Wednesday.

Internet games, Internet shopping and Internet community services (including chat room, blogging and BBS/forum) were the major driving forces of the business, according to DCCI, an independent, third-party Internet business monitoring and research institution.

It said Chinese netizens spent 256.07 billion yuan (US$37.6 billion) on Internet services between January and June, a growth of 58.2 percent over the same period a year earlier. The consumption volume would rise to 587.4 billion yuan for the whole year, DCCI predicted.

Over the past six months, every netizen spent 212 yuan on Internet services per month on average, up 13.9 percent.

The netizen's per-capita monthly income averaged 1,839 yuan, up11.4 percent. The growth rate was quicker than the monthly rise of the consumer price index, the major inflation measurement.

Through June, China had 221 million netizens, up 21.4 percent on all of 2007. The netizen population, which had already surpassed that of the United States to become the world's largest, would increase to 263 million by the end of this year, DCCI forecasted.

DCCI found in the first half of the year, every Internet user’s visits to every website was down 2.7 visits monthly, yet his or her visit to each site lasted 13.6 minutes longer every month.

The fewer visits pointed to lower netizen loyalty, which implied it was more difficult for advertising on websites.

However, Lu Bowang, Zhengwang Consulting president, said it was inevitable for the Internet to become more attractive than traditional media; there was a large room for Internet adverts to develop in China.

Currently, the business volume of Internet adverts was only 10 billion yuan, or 1/40 the annual total of China's advertising industry at large. The share was 1/10 of the United States.

(Xinhua News Agency July 17, 2008)

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