Chinese Internet Companies’ Revenue Topped 1 Trillion Yuan in 2019

Regardless of predictions that China’s tech sector would face robust instances in 2019 and past, a brand new authorities report appears to indicate that the business truly grew barely sooner final 12 months than within the 12 months earlier than.

Information contained in a report (hyperlink in Chinese language) launched by the Ministry of Business and Info Know-how (MIIT) on the final day of 2019 exhibits that China’s web companies had whole working income of 1.08 trillion yuan ($155 billion) within the first 11 months of 2019. That’s 22.four% greater than in the identical interval of 2018.

The expansion price elevated 2.7 proportion factors year-on-year and was up 1.four factors from the primary 10 months.

The businesses had working revenue of 103 billion yuan within the first 11 months, additionally up by 22.four%, a development price 14.9 factors larger than the earlier 12 months and up 7.three factors on the primary 10 months.

Development in analysis and improvement (R&D) spending, nevertheless, noticed a major slowdown in November, dropping 10.eight factors to 12.eight% in contrast with the determine for the primary 10 months. Spending within the first 11 months reached 43 billion yuan.

The report break up up the sector into a number of completely different service sorts, the biggest of which by far was “info companies,” which the report stated contains content material companies akin to video video games, music, video and information. Income from these companies made up 65.three% of the whole, rising by virtually 1 / 4 to 711 billion yuan.

The report stated “platform companies,” encompassing amongst different issues e-commerce and online-to-offline companies, was the second-largest section with 293 billion yuan of income. That was up simply over one-fifth from the earlier 12 months.

Corporations offering “information companies” noticed their income develop 23.three% within the interval, up 5.four factors over the primary 10 months. On the finish of November, these corporations have been working 1.67 million servers, up virtually 30% 12 months on 12 months.

The report additionally divided the nation into 4 areas — east, west, middle and northeast — although it didn’t specify which space is roofed by every area.

“East China,” which possible covers the nation’s extra developed coastal areas and metropolises, made up 91.four% of the web sector’s income within the interval, seeing development of 23.four% to 855.four billion yuan.

The “middle” and “west” of the nation noticed robust development nevertheless, with income rising by over half and over one-third, respectively.

In perspective of area, the japanese a part of China remains to be the mainstay within the sector, whereas the central and western components of China confirmed stronger development in enterprise.

“Northeast China,” which usually refers back to the rust-belt provinces of Heilongjiang, Jilin, and Liaoning, noticed simply 1.four% development in income to four billion yuan within the interval.

Contact reporter Isabelle Li (liyi@caixin.com)