China Cyber-economy Development Report
3 min readChina Cyber-economy Development Report
In 2005，China’s E-commerce market scale reached 680 billion RMB.The cyber-economy mentioned in this report means network service companies’economic activities fully depending on the Internet platform.Since 2006，led by Web 2.0，cyber-economy opportunities will emerge in an endless stream and those opportunities supply a new development space for investors and pioneers.
According to the research of Research in China（RIC）on hundreds of network companies in 2005，cyber-economy has become a successful（large income scale）business pattern.It mainly concentrates in nine fields:online advertisement，online tourism，online recruitment，online shopping，search engine，automobile websites，real estate websites，online payment，online music and online video.
According to RIC，China’s cyber-economy scale exceeded 20 billion RMB in 2005.
This report summarizes the current situation and competition pattern of China’s cyber-economy in general and studies the successful business patterns of major network companies.In addition，the report analyses the market opportunities of cyber-economy and companies worth investing in.
Comprehensive portals and industrial websites have an integration function of“gathering the population”.However，with the popularization of the Internet in the daily life，more focused websites targeting professional groups are needed to meet the individual’s demand for diversity and personality.
Web 2.0 is the new Web model，represented by webs such as Flickr，Craigslist，Linkedin，Tribes，Ryze，Friendster，and by social concepts such as Blogs，TAG，SNS，RSS，Wiki.It was realized by the new theories of Six Degrees of Separation，xml ajax and new techs.Many emerging webs are become fashionable and some of them have attracted large amounts of investments.This report analyses business patterns and development prospects of those emerging webs.
The Results of the Development
With its fast development，online/mobile payment has become the preferred payment means for a great number of online consumers.Even so，it doesn’t hamper the rising of new online shopping transaction pattern.In July，2006，China Union Payand dangdang.com cooperated to open the new e-commerce payment service“online shopping；offline swipe card payment”that is based on smart swipe card telephone.
Noticeably，the payment via this transaction system is affiliated with no commission charge.Then August，2006，China Union Pay opened 20 thousand swipe card telephonein Beijing，Shanghai and Shenzhen cities，serving more than 400 thousand users.As is said by Liang Jian-the general manager of China Union Pay’s holding companShanghai Card Information Service Co.，Ltd.，100 thousand swipe card telephones will have been opened in Beijing，Shanghai，Guangzhou and Shenzhen cities by the end of 2006，spreading the services over to three million online users.Yet，this new payment pattern stirred the dissatisfaction of commercial banks and third-party operators because of their declining revenues.
The market access qualifications being studied by the People’s Bank of China and China Banking Regulatory Commission and the involvement of China Union Pay in themarket of online payment will inevitably result in the reshuffle of China’s onlinpayment market.To survive in the market of online payment，the third-party payment institutions have to make greater effort to win in the fierce competition.
