Marbridge Daily

China's Jan-April Core Internet Industry Revenues Exceed RMB 324 Bln

MIIT, 5/28/19

China's core internet industry, defined as the aggregate of those enterprises holding a telecommunications value-added service license and recording 2018 full-year service revenues of at least RMB 5 mln, generated RMB 324.6 bln in service revenue during the 4-month period from January to April, 2019, according to a new report issued by China's Ministry of Industry and Information Technology (MIIT). The figure represents a 20.2% YoY increase, and the rate of increase represents a 2.9 percentage point jump over the 17.3% YoY rise in Jan-Mar 2019, and a 4.7 ppt decrease over the YoY rate of change in Jan-Apr 2018.

Growth Rate of China's Core Internet Industry Service Revenues

Core Internet Industry R&D Investment

From Jan-Apr 2019, investment in R&D by China's core internet industry reached RMB 13.4 bln, up 21.4% YoY. The growth rate represents a 1 ppt drop compared to the growth rate recorded in Jan-Mar 2019.

Industry Growth Drivers

Internet companies continued to innovate in applications such as online music and video content, travel, life services and public service platforms, driving the steady expansion of Internet industry revenues.

From Jan-Apr 2019, revenue from information services, including online music and video, online games, news information, and online reading, reached RMB 224 bln, up 21.8% YoY, 4.6 ppts higher than the growth rate in Q1 2019, accounting for 69% of China's core internet service revenue.

Internet Platform Service Growth Rate Slows

From Jan-Apr 2019, operating revenue from the provision of production service platforms, life service platforms, technology innovation platforms, and public service platforms reached RMB 67.9 bln, up 17.1% YoY, representing a 7.8 ppt decrease compared to the growth rate in Q1 2019.

Internet Data Services Maintain Rapid Growth

Driven by ongoing implementation of China's "Internet+" development policy, and continuous improvement in the level of information technology adopted in various industries, Internet data centers, cloud services, and cloud storage, which are key application infrastructures, have maintained rapid growth. From Jan-Apr 2019, internet companies generated related Internet data service revenues of RMB 3.35 bln, up 33.9% YoY; as of the end of April, the number of deployed servers reached 1.517 mln units, an increase of 26% YoY.

Central & Western China Outpace National Average Growth Rate

From Jan-Apr 2019, revenue from Internet service enterprises in eastern China was RMB 254.4 bln, up 20.3% YoY, accounting for 92.6% of national internet revenue (excluding cross-regional enterprises). Internet service enterprise revenue from central China was RMB 6.5 bln, up 19.8% YoY, that from western China was RMB 11.78 bln, up 25.3% YoY, and that from northeast China was RMB 1.48 bln, up 12.1% YoY.

Geographic Concentration

From Jan-Apr 2019, China's core internet service revenues were concentrated in five provinces, with Guangdong (revenue up 13.3% YoY), Shanghai (35.7%), Beijing (15.9%), Zhejiang (23.5%) and Jiangsu (25.9%) generating a combined total of RMB 246 bln in internet service revenues, or (excluding cross-regional enterprises) 89.7% of the nation's total.

Keywords: national statistics market size Internet revenue MIIT