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Online spending increases in China
Last Updated(Beijing Time):2007-01-11 14:39
Chinese Internet users spent 276.76 billion yuan on Internet services in 2006, almost 50 percent more than the previous year, as their number rose to 136 million by the end of 2006, the Internet Society of China said yesterday.

The society said in its Internet Guide 2007, jointly prepared with consulting firm DDCI, that Chinese Internet users spent about 170 yuan a month on services like Internet connection, online shopping and online games last year, almost 8 percent higher than the amount in 2005.

Total consumption increased as the number of Internet users rose from 111 million at the end of 2005 to 136 million in 2006.

The report was the first released by the society on the Internet sector, which covers 50 categories and surveyed over 80,000 individuals and 900 companies.

The China Internet Network Information Center, which has so far released 18 sets of statistics on Chinese Internet users on a six-monthly basis, is yet to release its own figures.

"The result of this report shows the growth has been very strong, but this industry is still in a very rudimentary stage," said Huang Chengqing, secretary-general of the Beijing-based organization.

The report also said 20.8 million Chinese were frequent bloggers, while 101 million routinely read blogs.

Beijing-based Sina defended its title as China's No1 Internet portal, but its peer on the NASDAQ, NetEase, took over Sohu to become the second most popular portal in the world's second-largest Internet market after the United States.

"In China, integrated service providers like portals have a natural reason to exist, because the size of the market is small and Chinese users' knowledge of the Internet is highly concentrated," said Hu Yanping, one of the authors of the report.

Online advertising, the main revenue source for Internet portals, saw a sustained high growth of over 50 percent to 5 billion yuan in 2006, up from 3.3 billion the previous year.

In the highly competitive search engine market, the growth was also brisk from 1.05 billion yuan in 2005 to 1.57 billion yuan in 2006.

The report showed 80 percent of Chinese users search on Baidu, while 36 percent have used Google for searches and 26 percent use Yahoo! China.

Domestic firm Baidu had only 40 percent of the market share in terms of revenue, while Google claimed 18 percent the smallest gap of recent reports on the search engine market. Recent reports said Baidu's share was twice that of Google's in China.

Source:China Daily 
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