Rising domestic spending power is expected to boost China’s big technology companies

February 14, 2018
Industry News
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Sarah Dai
sarah.dai@scmp.com

Online shopping, gaming, video streaming as well as new retail to fuel growth

China’s big technology companies are on track for strong growth, earning results posted over the past few weeks have shown.

Banking on the country’s rising spending power, Alibaba Group Holding and NetEase have ploughed money into new retail and entertainment, while Baidu has bet big on artificial intelligence and autonomous cars.

Weibo, China’s answer to Twitter, pocketed 80 per cent more in advertising revenue from small and medium-sized companies in the fourth quarter compared with the same period a year ago.

In a month from now, Xunlei and JD.com are expected to announce their fourth quarter and annual earnings results. Tencent is also expected to deliver its full-year performance on March 21.

Here are three trends to expect from China’s big technology companies as the year unfolds.

Robust online shopping

China had 506 million mobile shoppers by the end of last year, a 14.7 per cent increase over 2016, according to a report in January by the government-run China Internet Network Information Centre. That means more than one in three Chinese consumers made purchases through mobile shopping apps.

Coincidentally, Alibaba, which owns the South China Morning Post, posted a 57 per cent year-on-year increase in its core e-commerce revenue, which rose to 73.24 billion yuan (US$11.26 billion) in the December quarter, while NetEase reported that its e-commerce revenue had surged by 1.75 times to 4.65 billion yuan. Continue Reading

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