Social Networking in China: Foreign Capital Needed to Advance the Industry
An emerging industry kickstarted by the successful launches of Renren (formerly Xiaonei) and Kaixin, social networks in China have seen significant expansion over the past five years. Revenue for the industry has been increasing at an annualized rate of 77.2% over the period. However, the majority of Chinese social networks are small and insufficiently funded. In the next few years, more foreign enterprises will enter the Chinese market by acquiring these local networks.
San Francisco, CA (PRWEB) August 26, 2012
As an emerging industry kickstarted by the successful launches of Renren (formerly Xiaonei) and Kaixin, social networking in China has seen significant expansion over the past five years. Revenue for the industry has been increasing at an annualized rate of 77.2% over the period, and is estimated to reach $1.6 billion in 2012, says ACMR-IBISWorld.
As competition intensifies, social networks are putting more emphasis on diversified businesses like online shopping and video services, instead of mostly relying on advertising. Market share concentration has decreased over the past five years, as more enterprises entered the Social Networking industry. Due to a relatively low initial investment requirement, there are many small- and medium-sized social networks in China; however, the majority are insufficiently funded. In the next few years, more foreign enterprises will enter the Chinese market by acquiring these local networks. And following in the footsteps of domestic and foreign counterparts like Renren, Jiayuan and Facebook, leading companies like Kaixin will work on initial public offerings.
With the growing popularity of social networks, especially with the introduction of real-name registration, the Chinese government is expected to tighten regulations on social networking services, including internet security protection and the issuance of operation licenses. As a result, ACMR-IBISWorld anticipates that the industry concentration level will increase slightly in the next five years.
For more information, visit IBISWorld´s Social Networking Industry in China report page.
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IBISWorld industry Report Key Topics
The Social Networking industry in China is rooted in two aspects: social intercourse and the internet. Enterprises within the industry create online communities with a group of people who share similar interests. Registered users are provided with various methods of communicating with each other.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Key Statistics Industry Data
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