Source: Ministry of Industry and Information Technology (MIIT)
In the first half of 2020, China’s internet and related services industry showed a gradually improving trend: business revenue and R&D spending recovered to double-digit growth, profits stayed positive, and internet firms in different fields showed divergent development.
Overall performance
Internet business revenue grew fast. In the first half, China’s internet and related service enterprises above designated size completed business revenue of 590.7 billion yuan, up 14.1 percent year on year, 12.6 points faster than the first quarter though 3.8 points slower than a year earlier.
Industry profits kept positive growth. Operating profits reached 52.16 billion yuan, up 2.8 percent year on year, reversing the first quarter’s steep fall but 19.9 points slower than a year earlier and 11.3 points below revenue growth.
R&D spending continued recovering. R&D expenses reached 31.34 billion yuan, up 10.7 percent year on year, 10.7 points faster than the first quarter though 18.7 points slower than a year earlier.
Performance by business and region
Information services revenue grew fast, with audio-video services outstanding. Information services revenue, covering online music and video, games, news and reading, reached 357.7 billion yuan, up 16.3 percent, 5.2 points faster than the first quarter, 60.6 percent of internet business revenue.
Platform services accelerated, led by online education and e-commerce platforms. Platform service firms, mainly production services, life services, technology innovation and public services platforms, earned 172.8 billion yuan, up 13.6 percent, reversing the first quarter’s decline and recovering 8.7 points from January to May, 29.3 percent of internet revenue.
Access services fell while data services grew fast. Internet access and related services earned 21.27 billion yuan, down 5.8 percent; internet data services, including cloud and big data services, earned 8.76 billion yuan, up 14.3 percent, 5.4 points faster than the first quarter.
The Centre’s growth stood out while the Northeast kept falling. The East completed 503.8 billion yuan, up 15.7 percent, 91.5 percent of national internet revenue excluding cross-region enterprises. The Centre completed 22.67 billion yuan, up 26 percent, 11.9 points above the national average. The West completed 22.02 billion yuan, up 12 percent, 2.1 points below the average. The Northeast completed 1.95 billion yuan, down 4.8 percent.
Major provinces grew fast, some outstandingly. The top five by cumulative revenue, Beijing (up 27.7 percent), Guangdong (up 0.7 percent), Shanghai (up 21.7 percent), Zhejiang (up 24.8 percent) and Jiangsu (up 35.5 percent), completed 482 billion yuan, 81.6 percent of the national total excluding cross-region enterprises, with four provinces above the national average. Twenty-one provinces achieved positive growth; Ningxia, Hubei, Chongqing and Tianjin grew over 50 percent, while Inner Mongolia, Xinjiang, Gansu, Heilongjiang and Liaoning still fell steeply.
The number of mobile apps
App numbers recovered steadily. By the end of June 2020, 3.59 million apps were monitored in the domestic market, 10,000 fewer than at the end of May, down 0.3 percent month on month.Domestic third-party app stores carried 2.12 million apps and Apple’s App Store (China) 1.47 million. In May, 100,000 new apps were listed and 110,000 delisted.
Games kept the lead in app numbers. By the end of June, the top four app categories held 58.6 percent of the total, with ten other categories including social communication and education holding 41.4 percent. Games led with 925,000 apps, 25.8 percent of all apps, up 26,000 month on month. Daily tools, e-commerce and life services followed with 508,000, 365,000 and 305,000 apps, 14.1, 10.2 and 8.5 percent respectively.
Music and video apps kept the top download total. By the end of June, third-party stores’ total distribution reached 1.3363 trillion downloads. Music and video ranked first at 181 billion downloads, up 6.6 percent month on month; games ranked second at 172.2 billion, up 7.3 percent. Daily tools, social communication, system tools and life services ranked third to sixth at 155.5, 154.3, 121.9 and 120.4 billion. Among the rest, news reading (108.8 billion), e-commerce (86.9 billion), finance (77.6 billion), photography (51.5 billion) and education (51.4 billion) each exceeded 50 billion downloads.
Notes: first, to reflect the mobile app market more precisely, monitoring switched from a cumulative strategy to an on-shelf strategy, counting only apps currently listed; second, per market app store classification, apps are divided into 14 categories: games, daily tools, e-commerce, life services, social communication, education, themes and wallpapers, news reading, sports and health, system tools, music and video, finance, photography and others.
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