Tài liệu Nothing But Net 2009 Internet Investment Guide 11 pdf

105 Global Equity Research 05 January 2009 Imran Khan 1-212 622-6693 imran.t.khan@jpmorgan.com China Internet Market Overview Number of Internet Users Continues Strong Uptrend Chin

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Global Equity Research

05 January 2009 Imran Khan

(1-212) 622-6693

imran.t.khan@jpmorgan.com

number of bidders they would typically have exposure to, thus increasing the amount

of money raised for their cause

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(1-212) 622-6693

International Sector Outlooks

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China Internet Market Overview

Number of Internet Users Continues Strong Uptrend

China’s Internet population grew at a rapid pace in 2007, increasing 53% Y/Y to 210M, according to China Internet Network Information Center (CNNIC) In 1H08, the number of Internet users climbed a further 20% to reach 253M as per CNNIC, giving China the world’s largest Internet user base This strong growth in recent years has been driven by factors such as robust GDP growth, lower priced computers, more affordable telecom connection fees, government support to Internet usage and low-cost entertainment aspects Further, growth in the rural population exceeded that in the overall population, growing at almost 128% in 2007, as lower-income groups also continue to adopt the Internet

Despite this rapid growth, China's Internet penetration rate of ~20% of the population

is still well below that of developed markets like the US, Japan and Korea (over 70%) We expect Internet users to grow by around 20% Y/Y in 2009 to reach

~320M, or the penetration rate to reach ~24% of the population by the end of 2009

Figure 57: China Internet Users and Penetration Rate

210

375

0 100 200 300 400 500 600

0%

5%

10%

15%

20%

25%

30%

Number of China Internet Users (Left, millions) Penetration Rate as % of Total Population (Right)

Source: CNNIC (China Internet Network Information Center), J.P Morgan estimates

Broadband and Mobile Continue Rapid Growth

The number of users with broadband Internet access grew 80% Y/Y to 163M (78%

of total users) by the end of 2007, and to 214M (85% of total users) by June 2008, as per CNNIC

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Figure 58: Broadband Internet Users in China

7 10 17 31 43

53 64 77 91

122 163

214

0

50

100

150

200

250

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

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Dec-07

Jun-08 Broadband Internet Users (millions)

Source: CNNIC

Figure 59: Broadband Internet Users as % of Total Internet Users

0%

20%

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60%

80%

100%

Dec-02

Jun-03

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Jun-08 Broadband users as % of total Internet users

Source: CNNIC

Further, the number of broadband subscribers reached 66.5M by the end of 2007, up 28% Y/Y

Table 52: Trends in Broadband Subscriber Penetration

2003 2004 2005 2006 2007

Source: CNNIC, Ministry of Information Industry (MII), J.P Morgan estimates

Since China has yet to roll out 3G mobile technology, mobile Internet access is slow Despite this impediment, the number of mobile Internet users increased by 65% Y/Y

to 73.1M by Jun-08, as per CNNIC The number of mobile Internet users was 29% of all Internet users and 12% of all mobile users This compares to South Korea, where

~51% of mobile users use their phones to browse the Internet We expect mobile Internet usage to increase significantly once 3G technology becomes available to consumers

Figure 60: Methods of Accessing by Device

87.3%

0%

20%

40%

60%

80%

100%

Source: CNNIC (Jun-08)

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Home Has Become a Preferred Place to Access the Internet

Given the increase in Internet accessible computers, broadband penetration, and per capita wealth, the home has become the preferred place for most users to access the Internet, with over two-thirds of all Internet users accessing the Internet from home Access from an Internet café lost share to the home, but still grew almost 61% in

2007

Figure 61: Main Access Locations

74%

39%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

However, given the relatively lower cost to access the Internet from an Internet café, about Rmb51.6 per month ($7.46), as per CNNIC, more young people are drawn to Internet cafes While Internet access at home is more expensive for those who pay for it, about Rmb74.9 per month ($10.83), we expect Internet access from home to continue to grow at a fast rate as a wealthier population continues to buy more computers and can more readily afford home access

Figure 62: Young Secondary and High School Students More Likely to Use Internet Cafes

26.6%

45.3%

18.7%

1.4%

14.4%

1.0%

6.7%

21.1%

36.0%

16.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

and abov e

Source: CNNIC (2007)

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Figure 63: Home Internet Access Charges

Rmb

< 30, 10.8%

31-50, 23.2%

51-100, 49.5%

> 100, 16.5%

Source: CNNIC (2007) Average: 74.9 Rmb / Month

Figure 64: Internet Cafe Access Charges

Rmb

< 15, 33.3%

16-30, 24.8%

31-50, 16.1%

51-100, 13.1%

> 100, 12.7%

Source: CNNIC (2007) Average: 51.6 Rmb / Month

Users Spending More Time Online

China’s Internet users are continuing to spend more time online CNNIC’s Jun-08 survey showed users spent an average of 19 hours per week online This was up from 16.2 hours per week six months earlier We note that Internet usage has almost doubled compared to the 8.7 hours per week spent online in June 2001

Figure 65: Average Time Spent Online

Hours/week

15.9 16.5 16.9 18.6 16.2 19.0

8.5

0 5 10 15 20

Jun-01

Dec-01

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Av erage Access Time Per Week (Left, hours)

Notably, as per some surveys, Internet use has surpassed radio and print media as a method of obtaining information and is second only to TV in terms of weekly consumption

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Figure 66: Time Spent on Different Media

Hours/week

28

16

14

6

2

-5 10 15 20 25 30

Source: CMMS, CNNIC

Figure 67: Top Information Source for High-Impact Users – the Internet

89.2%

74.7%

67.3%

14.2%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Source: CNNIC (2007) Note: Defined as those aged 25-40, with junior college education or higher and an annual income of Rmb2,000

or more

Media and Instant Messaging Are Among the Most Popular Internet Uses

According to the Dec-07 CNNIC survey, online music is the most popular use of the Internet, with 86.6% of Internet users accessing online music Online video is also popular, with 76.9% usage, while online news use was 73.6%

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Table 53: Internet Usage by Category

Instant messaging (IM) use was cited by 81.4% of all respondents, second only to online music However, IM was the first stop for 39.7% of all Internet users, almost 20% more than the second most frequent first stop, online news at 20.0% Online music came in at a distant sixth place, or 3.4% It is also interesting to note that IM was more widely used in China than e-mail, as per the survey, which has likely benefited companies like Tencent, which owns the popular QQ brand

Figure 68: First Stop When Using the Internet

Instant Messaging, 39.7%

Online new s, 20.0%

Online games, 9.3%

Search, 7.4%

E-mail, 3.5%

Online Music, 3.4%

Online v ideo, 2.4%

Other, 14.3%

Tiêu đề	China Internet Market Overview
Tác giả	Imran Khan
Trường học	J.P. Morgan
Chuyên ngành	Global Equity Research
Thể loại	Báo cáo
Năm xuất bản	2009
Thành phố	New York

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Số trang	10
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