abcus-中国互联网报告2018（英文）-2018.7-97页-5mb

China Internet Report 2018 Summary

Core Content Overview

The China Internet Report 2018 provides an in-depth analysis of the Chinese internet ecosystem, highlighting the scale, growth, and influence of major players, key themes, and the role of government regulation.

Main Themes

1. Chinese Internet Giants Are Doing Everything

   • Baidu, Alibaba, and Tencent (BAT) are deeply embedded in the internet ecosystem, both building and investing in a wide range of industries.
   • Key sectors include Ecommerce, Content & Media, Messaging & Social, Sharing Economy, AI, Smart Devices, Autonomous Cars, Blockchain, Fintech, Education, Gaming, and Esports.

2. Chinese Internet Empowers Rural Population

   • Rural internet penetration reached 35% in 2017 with 209 million users.
   • The internet has driven growth in e-commerce, education, and media in rural areas.
   • E-commerce in rural China saw significant expansion, with over 2,100 Taobao villages contributing to $19 billion in annual sales and 1.3 million new jobs.
   • Education through live-streaming has reached 55 million rural students.
   • Short video apps have attracted 175 million rural users.

3. Chinese Internet Companies Embrace 'Social+'

   • Social commerce is on the rise, with platforms like Pinduoduo and Xiaohongshu integrating social features into their business models.
   • Pinduoduo, with 156 million monthly active users (MAUs), uses group buying and social sharing to drive engagement.
   • Xiaohongshu combines social networking with e-commerce, similar to Instagram and Pinterest.
   • Social features are also adopted by online video and news platforms, such as iQiyi Paopao and Tencent News.

4. Government Is The Visible Hand

   • Government regulation plays a crucial role in shaping the internet landscape, especially in fintech and content moderation.
   • Cryptocurrency exchanges and initial coin offerings were banned in 2017.
   • In 2018, online quiz apps and platforms like Zhihu and Toutiao were restricted for failing to remove illicit content.
   • The government also imposed tighter controls on P2P lending, reducing the number of companies from 6,000 to 2,000 in three years.

Key Sectors and Players

Top Chinese Startup Cities (by valuation)

• Beijing: $305B valuation, 61 unicorns
• Hangzhou: $240B valuation, 17 unicorns
• Shanghai: $115B valuation, 34 unicorns
• Shenzhen: $61B valuation, 11 unicorns
• Ningde: $20B valuation, 1 unicorn
• Grand Total: $773B valuation, 142 unicorns

Top Chinese Internet Players

Most Active Venture Capital Firms

• IDG Capital Partners: Invested in Baidu, Xiaomi, SouFun, Ctrip, 360, Meitu, iQiyi, etc.
• Matrix Partners: Invested in Zhaogang.com, Babytree, Ofo, Didi, etc.
• Sequoia Capital: Invested in JD, 360, VIPID, Toutiao, etc.
• Shunwei Capital: Invested in 51talk, iQiyi, Xiaomi, etc.
• Qiming Venture Partners: Invested in Mi, Face++, UBTECH, etc.

Most Active Ecommerce Investors

• IDG Capital Partners: Invested in Xiaomi, FarFetch, Yuantiku, etc.
• ZhenFund: Invested in Zhaogang.com, Xiaohongshu, ClubFactory, etc.
• Matrix Partners: Invested in The Beast, Reflower, MSParis, etc.
• Tiantu Capital: Invested in mwee.cn, Pagoda.com, Xiaohongshu, etc.
• Sequoia Capital: Invested in DJI, JD, Meituan-Dianping, etc.

Notable Acquisitions (2017–2018)

• Ele.me acquired by Alibaba
• Mobike acquired by Meituan-Dianping
• Cheyipai acquired by Souche
• Dangdang acquired by HNA Group
• Waimai acquired by Ele.me
• Tantan acquired by Momo
• Tian Tian Express acquired by Suning
• Lagou.com acquired by 51job
• FaceU acquired by Toutiao

Ecommerce Trends

• Pinduoduo has become the third most popular e-commerce platform in China with 156 million MAUs.
• Xiaohongshu operates as a social commerce platform with 30 million MAUs in 2018.
• Alibaba and JD are working to integrate local convenience stores into their ecosystem through initiatives like 'Ling Shou Tong' and 'Zhang Gui Bao'.
• Meituan-Dianping is the most funded Chinese e-commerce startup, with $8.3 billion in total funding.

Short Video and Online Video

• Short video users in China grew to nearly 600 million by March 2018.
• Kuaishou and Douyin (TikTok) are the leading short video apps, with Kuaishou capturing over 50% of the market.
• Douyin saw a significant increase in users, becoming the most downloaded iOS app in Q1 2018.
• The online video market is dominated by three giants: Tencent Video, iQiyi, and Youku.

Quick Facts

• Alibaba was launched in 1999 and has 63 million paying subscribers as of Feb 2018.
• Baidu launched iQiyi in 2010, listed in 2018 with a $2.3B raise, and has 60 million paying subscribers.
• Youku was launched in 2006 and acquired by Alibaba in 2015 for $3.7B. It merged with Tudou but remains a separate brand.
• Tencent News has the largest user base, while Toutiao has the longest user engagement time.

Conclusion

The Chinese internet ecosystem is vast, with significant growth in e-commerce, social commerce, and digital media. The government plays a pivotal role in regulating and shaping the industry, particularly in fintech and content. BAT continues to dominate the landscape, with extensive investments and acquisitions across multiple sectors. The rise of social commerce and short video platforms highlights a shift towards more interactive and community-driven internet usage.