China Poised for Internet Boom

The number of Internet users in China will climb from 2.1 million to more than 6.7 million during 1999, according to report published jointly by BDA (China) Limited and The Strategis Group.

The report “The Internet in China” suggests that China is already the fastest growing Internet market in Asia and will become one of the world’s leading markets within five years.

“With more than 33 million users by 2003, each new user that comes online creates new opportunities for Internet-related business, enabling companies to leverage their technology, service, or capital in one of the world’s most exciting Internet markets,” said Duncan Clark of BDA China.

According to the report, China’s ISP market is experiencing “survival of the fattest.” Those ISPs with access to the fattest pipes (typically those ISPs owned or funded by China Telecom) have emerged on top. Nevertheless, the report notes that opportunities are growing for new players, including cable TV operators, to tap revenues in the ISP market, which are expected to exceed $4 billion by 2003.

China also presents a burgeoning market opportunity for Internet equipment, software, and service, the report found. This sector will exceed $160 million in 1999. Foreign vendors currently dominate China’s Internet infrastructure, but domestic players are expanding their efforts to serve this growing market.

IDC had predicted that there will be 9.4 million Internet users in China by 2002, up from 1.4 million in 1997. China’s Xinhua news agency also had good news for the Internet industry in China when it reported that 85 percent of the nation’s Internet users were under the age of 35.