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Top 10 Predictions for Internet Industry Growth in China

The largest mobile Internet companies in China will derive over 30 percent of their total revenue from overseas markets. Moreover, Chinese in-country online retail transactions will reach around $1.5 trillion by 2019, according to the latest market study by International Data Corporation (IDC).

"Entering 2017, China's Internet industry formally bids farewell to the fast growth of recent years, making an overall transition from an incremental market to a saturated market," said Xue Yu , senior analyst at IDC.

However, emerging technologies such as artificial intelligence, Internet of Things and AR/VR have yet to reach the stage of large-scale commercialization and thus hold huge growth potential.

According to the IDC assessment, vendors and service providers should pay attention to the R&D and application of emerging technologies, and look to seize new opportunities for competition in this new era.

Top 10 IDC predictions for Internet in China:

Prediction 1: Internet+ will push forward the development of digital transformation (DX) economy.

By 2020, 40 percent of Internet enterprises in China will be working together with players in traditional industries to push forward their digital transformation.

Prediction 2: Government regulation and control will strengthen.

By 2018, over 60 percent of Internet business applications in China will be under the supervision of competent authorities.

Prediction 3: Cloud 2.0 will speed up IT ecosystem reforms in the Internet industry.

By 2020, Internet enterprises in China will allocate 75 percent of their IT infrastructure and software expenditures to cloud products and services.

Prediction 4: The grand AI curtain will be lifted.

By 2018, 67 percent of Internet products or services in China will employ some form of AI functionality. Enterprise applications will be the key to growth.

Prediction 5: Immersive interfaces will enrich Internet user experience.

By 2021, more than 150 million people in China will regularly use AR/VR platforms to access Internet applications, content and data.

Prediction 6: Chinese mobile Internet companies will expand their business to overseas markets.

By 2019, large-sized mobile Internet companies in China will receive over 30 percent of their revenues from overseas markets. India, Brazil, Southeast Asia and other emerging markets will likely be their main sources of revenue.

Prediction 7: The crowd-funding model will speed up innovation for Internet enterprises.

By 2019, 10 percent of new products from Internet companies in China will be developed through crowdfunding. This should raise the product promotion success rate by at least 40 percent.

Prediction 8: New Retail era of E-commerce will arrive.

By 2019, online retail transaction volume in China will top RMB10 trillion. Standardization, interaction, integration and globalization will become main development directions for online retail market.

Prediction 9: Offline operations will become vital to the success of on demand local services.

By the end of 2017, the Internet on-demand local services market in China will tend to be stabilized. All top online platforms will be collaborating extensively with offline merchants to enhance their operational abilities and customer experience.

Prediction 10: Video content self-produced by platforms will become the mainstream.

By 2018, more than 60 percent of the online video content in China will be made by the platforms themselves. Three to five video platforms are expected to be turning a profit by taking this move.

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