Comparison of Internet market report between China and india

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China and India—two Asian super powers and the most populous countries in the world. For a long time, they’ve been naturally considered competitors and the battle between the “dragon and the elephant” has long been a topic of international discussion. In reality, this competition has been lopsided for quite some time, as China’s GDP is five times larger than India’s. However, in 2015 India’s growth rate surpassed China’s for the first time to become a rare bright spot in the world economy. The “China vs. India” discussion is once again heating up.

As an important component of future economic growth, China and India are both focused on developing their internet industries. Not only are the governments of both countries actively promoting innovation and entrepreneurship, but both have put forward internet development plans—“Digital India” in India and “Internet+” in China. The internet industry might be the area in which the competition between China and India is the narrowest. Because of this, both sides are excited by the competition.

What is the state of China and India’s internet development? Which country will be the global leader in the future? Can we predict India’s internet market development path from China’s internet development experience? The current report will attempt to provide a comprehensive comparison of the internet markets of China and India from the perspective of internet user bases, markets, culture and policy to analyze the current state and future development challenges of the internet in China and India.

Ⅰ. China Leads the overall internet development of India

To determine whether a particular country is a developed country in terms of the internet, you can look at the question from two different angles: 1) Does a country have an extensive internet consumer market and spending power? 2) Does a country have world-class internet companies? From these two perspectives, China is far ahead of India at the present stage.

1.China: Largest Internet Market in the world

As two hugely populous countries, the massive internet user bases of China and India undoubtedly serve as the foundations for their internet development and determines how much space for growth the internet companies in their respective countries have. But even though the countries have similar populations, China and India’s internet markets have developed at a vastly different pace. According to the State of Broadband 2016 report published by the UN Broadband Commission for Sustainable Development on September 15, China has the world’s largest internet market with 721 million users, while India has overtaken the United States to become the world's second largest Internet market, with 333 million users. In terms of mobile internet users, according to online statistics portal Statista, China’s mobile internet penetration rate is 44.91% as of 2016. If you estimate China’s population at 1.4 billion people, that means that China has 629 million mobile internet users. India on the other hand has a mobile internet penetration rate of 24.33%, or 316 million people (total population 1.3 billion). When you compare the two countries, India possesses roughly half the mobile internet users as China.

As a result of this huge and rapidly developing market, China’s internet companies were able to rise quickly and become major players.

2.Chinese Internet Companies leads to Top of Global Rankings

According to Statista’s data, as of May 2016, China had seven of the top 19 internet companies in the world by market value, compared to 11 in the U.S, one in Japan and zero in India. According to Cheetah Mobile’s Big Data analysis platform libra, at the end of 2015, China possessed eight of the top 14 mobile internet companies in terms of active users, as compared to four in the U.S., one in South Korea and one in Russia (if you include Cheetah Mobile then China has nine of the top 15 companies). From these two perspectives, China has already become a great internet power.

The rise of Chinese companies has not only been dependent on the domestic market. Since the beginning of 2015, Chinese mobile internet companies have been expanding globally. Countless companies, from Alibaba, Tencent and Baidu to Cheetah Mobile, YY Inc. and Meitu, as well as numerous small-scale internet companies and app developers, have been heavily focused on expanding overseas.

Aliexpress, the overseas version of Alibaba’s flagship e-commerce platform Taobao, has already made major inroads into overseas markets, including Russia where it is the number one e-commerce service.

Cheetah Mobile was one of the first Chinese internet companies to expand overseas, with more than 3.1 billion app downloads globally and 623 million MAUs, among which 80% are in developed markets in Europe and America. Cheetah Mobile’s overseas live streaming app has infiltrated mainstream American youth culture, while surpassing popular American live steaming app Periscope in the process.

India’s burgeoning internet companies possess a golden opportunity for overseas expansion due to the status of English as India’s de facto national language and the huge Indian diaspora, but despite these natural advantages only a handful of Indian companies have achieved overseas success, including online and mobile restaurant directory Zomato and mobile advertising company InMobi. At the current stage, India’s internet companies are mostly still in the local development stage.

3.Chinese Smartphones Sold All Over the world

Chinese smartphone manufacturers are among the top companies in the world in terms of global shipments. According to Bloomberg, during the four years from 2012 to 2015, Chinese branded smartphone shipments rose much more rapidly than established overseas brands like Apple and Samsung.

According to data compiled by market research organization Gartner, Chinese brands accounted for three of the top five smartphone brands by global shipments in the second quarter of 2016, including Huawei, Oppo and Xiaomi.

These impressive results aren’t simply due to the low price of Chinese phones and China’s massive consumer base. In fact, Chinese smartphone brands have already begun shifting towards the high-end market. According to a report by China Central Television (CCTV), shipments of Huawei, OPPO and Vivo account for 40% of the total $500 and up smartphone market as they compete directly with Apple’s iPhone and Samsung’s Galaxy series. Moreover, Chinese smartphone brands have already established footholds in overseas markets. A large portion of Huawei, ZTE, TCL and Lenovo’s sales come from overseas, including approximately 40% for Huawei and 60% for ZTE. ZTE is the second ranked phone brand in Russia with a 9.4% market share, fourth in Europe and South Africa, and fifth in Australia and Mexico.


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