The number of China’s mobile Internet users is expected to be more than 520 million by the end of the year (from last year’s 429 million) and will exceed the number of desktop Web users next year, according to a report by Beijing-based research firm Zero2IPO Group.
In 2011, the revenue from China’s mobile Internet industry was 101.7 billion yuan ($16 billion), up 37 percent year-on-year, the report said. The increase was largely due to bigger investments in added-value mobile services by telecom carriers. In addition, the enthusiasm of third-party providers helped to develop attractive applications, which increased people’s willingness to pay for the services.
Mobile gaming is still one of the hottest sectors in the mobile Web industry. The number of mobile gaming players in China will be 178 million this year, with a market volume of more than 18 billion yuan.
$378 mn investment in the first half of the year
The rapid development of the mobile Web market in China has also attracted many venture capital and private equity investors. In the economic downturn, mobile internet becomes the hottest investment spot in China. With the development of mobile internet into large scale, large numbers of investors see great opportunities in the further development of this industry.
Data from Zero2IPO Database reveals that in the first half of the year, about 30 investments were made in China’s mobile Internet industry, with a disclosed investment amount of $378 million (a year-on-year increase of 18 percent), which means $22.25 million for each on average.
Due to the decreasing of participation costs for both personal users and enterprises and the open of application entrances and operation systems, mobile internet industry has entered into a high-speed development period.
“But it’s still not the harvest time for mobile internet at the moment”, said Ni Zhengdong, Chairman of Zero2IPO Group on the second China Mobile Internet Investment and Financing Forum on Sept 4.
“Although the total investment volume of VC and PE in the first half of the year has declined about 60 percent year-on-year, yet the investment in the mobile- Internet industry has risen and the momentum is expected to continue,” said Gavin Ni, founder and chief executive officer of Zero2IPO Group. “There will be at least five companies in mobile-Internet industry to be listed in the next three to five years in China, he added, and the market revenue of mobile Internet will rise to about 130 billion yuan ($20.5 billion) from last year’s 102 billion yuan”.
Zhou Kui, partner of Sequoia Capital China, said “despite global economic uncertainty, he is optimistic about investment in the mobile-Internet industry. We attach great importance to the development of the mobile- Internet industry, since it is of great potential” .
Xu Shengyuan, managing director of Intel Capital China, the investment arm of US-based chip giant Intel Corp, said “every sector related to mobile Internet could attract Intel Capital’s attention. The mobile-Internet industry provides much convenience to consumers and constitutes a huge vertical market. There will definitely be some new large-scale companies coming out of this industry.”
“At the end of the great revolution in IT industry, mobile internet will see a much greater and much longer increase”, said Chen Yizhou, CEO of Renren Inc. “The mobile-Internet market has great potential, representing the biggest trend in the information technology industry in the next 10 years,” Chen said.
Mobile e-commerce, wireless value-added services and mobile gaming services have attracted the most investment this year. Mobile e-commerce will become one of the major investment areas in the industry, said the report. VC and PE companies made five investments in mobile e-commerce industry in the first half of this year.
Source: Zero2IPO Group, chinadaily.com.cn (04 & 05/09/2012), morningwhistle.com (05/09/2012)