China's Internet Firms Spin a Web of Opportunities

Chinese Internet firms are mixing online gaming, shopping and social media into their business models as competition ramps up, to cater to a massive -- and diverse -- user base.

Published

7 months ago

Categories

Technology, Finance

Topics

Social Media/Social Networking

Places

China

Companies

Wal-Mart Stores, Inc., Tencent Holdings Limited

Transcript

Whether its taking on an arch enemy in a video game, sharing the latest news on China's top social media site Weibo, or shopping online for favourite gadgets. China's massive market of internet users wants to do a wide variety of things - and China's leading Internet sites are diversifying their business models to match. The number of China Internet users has surpassed the 500 million mark. And according to government data, there are now more than 300 million microbloggers as smartphone usage explodes. Yu Gang is chairman of Chinese e-retailer Yihaodian, now majority owned by US retailer Walmart. (SOUNDBITE) (Mandarin) CHAIRMAN OF YIHAODIAN, YU GANG, SAYING: "You can see that in the past, everything was on individual platforms. Search portals, gaming, e-commerce, social websites were all independent of each other. But today, there are more and more of these integrated internet platforms." Internet service firm Tencent is a prime example of product mix. It's got gaming, e-commerce and mobile, all currently boosted by strong ad sales. The company's share price is up more than 70 percent this year. 24 of 35 analysts rate the company a buy or strong buy. But a few argue China's Internet sector is more mature than people realise. Nomura's Jin Yoon has a reduce rating on Tencent (SOUNDBITE) (English) HEAD OF INTERNET RESEARCH, ASIA EX-JAPAN FOR NOMURA HOLDINGS, JIN YOON, SAYING: "There's only 24 hours a day right - so if I'm doing three hours of online video, chances are that's competing with potential mindshare coming from gaming or social networking and whatever it may be. So competition for revenues, not only for revenues but also for people's attention in mindshare is going to be very key in the sector going forward." Still it's hard to ignore online fervor in the world's most populous nation. A recent shopping festival held on e-retailer Taobao grossed 3.1 billion dollars in one day. The firm said 10 million users visited the website in the first minute the sale started.