China Internet Industry to Surpass Japan in 10 Years: Morgan Stanley
Posted on: Monday, 19 September 2005, 18:00 CDT
Sep. 19--BEIJING -- The value of China's Internet industry will surpass that of Japan in five to 10 years because the Chinese market is more dynamic while the Japanese market is dominated by one company, a global analyst with the investment bank giant Morgan Stanley said Monday.
The $15.1 billion equity value of China's commercialized Internet, which includes 13 portals, online game services and auction houses, lags the approximately $40 billion equity value of the same market in Japan, said Mary Meeker, global Internet analyst with Morgan Stanley.
But she said the balance would change because China's growing online population -- about 94 million people use the Net and the number keeps growing -- is second biggest in the world and biggest for users under age 30.
The under-30 population shows signs of experimental "innovation," Meeker said.
"The practicality is that China is simply a bigger market in terms of consumers," she said at a press conference in Beijing.
"The innovation coming out of this market to innovate new things that have never been thought of is unthinkable." Yahoo! Japan also controls much of Japan's Internet industry, she said. It offers e-mail, news, auctions, broadband and other services, a package of the scale America Online once tried to do in the United States.
But China is seeing no dominant player in its Internet market so far, Meeker said. One in 10 venture capital-funded companies succeeds, with many failing for lack of long-term planning or customer service, she said.
Today the top players include Internet portals SINA.com and the Tom Group, and the online gaming company Shanda Corp.
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Source: Kyodo News International, Tokyo
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