Social Networking in China: Foreign Capital Needed to Advance the Industry

Share Article

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.

IBISWorld Market Research

IBISWorld Market Research

As competition intensifies, networks are offering online shopping and video services, instead of mostly relying on advertising.

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.

Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189

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.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Location
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Gavin Smith
Visit website