Huge in­vest­ments spark change in peo­ple’s lives, company for­tunes

After a year of hand­some re­turns, In­ter­net com­pa­nies get ready for the road ahead

China Daily (Canada) - - FRONT PAGE - By MENG JING in Beijing mengjing@chi­

The first time Jack Ma, founder of China’s e-com­merce gi­ant Alibaba Group Hold­ing Ltd, used the In­ter­net was in 1995 in the United States. His search for “beer” and “China” turned up no re­sults. It was then that Ma de­cided to set up an on­line plat­form, one that could make it easy for peo­ple to do business any­where.

Cut to the present, and there has been a sea change in the vir­tual world. Shop­pers can buy almost ev­ery­thing in Ma’s on­line e-com­merce em­pire, which since its ini­tial pub­lic of­fer­ing in Septem­ber 2014 has vaulted into the same league as Google Inc and Face­book Inc.

But chang­ing the way peo­ple shop is not the only thing that the In­ter­net has changed China. In many ways 2014, which was also the 20th an­niver­sary of China get­ting con­nected to the In­ter­net, was an ex­cel­lent year of re­turns for China’s In­ter­net sec­tor, no mat­ter how big or small the company was.

Big In­ter­net firms, such as Alibaba, Baidu Inc and Ten­cent Hold­ings Ltd, have made fur­ther changes in peo­ple’s daily lives with huge in­vest­ments in tra­di­tional sec­tors like fi­nance, video and even taxi hail­ing.

En­trepreneurs have also found the In­ter­net to be a great av­enue for set­ting up their own busi­nesses. A sig­nif­i­cant num­ber of the post-1990s gen­er­a­tion have be­come self­em­ployed after the In­ter­net made it easy for them to do business. From sell­ing rice noo­dles through on­line pro­mo­tions to so­cial net­work­ing ap­pli­ca­tions that cater to es­o­teric tastes, peo­ple with in­no­va­tive business ideas have been able to re­al­ize their dreams with the help of the In­ter­net.

And it has proved re­ward­ing too. In 2014, top-three rich­est men in China were all from the In­ter­net in­dus­try, with Jack Ma the leader, fol­lowed by Robin Li of Baidu and Pony Ma of Ten­cent, ac­cord­ing to the Forbes Bil­lion­aire List 2014.

Ini­tial pub­lic of­fer­ings were another way for In­ter­net com­pa­nies to raise wealth in 2014. Statis­tics show that In­ter­net com­pa­nies ac­counted for 11 out of the 82 Chi­nese com­pa­nies that went pub­lic in over­seas mar­kets dur­ing the first 11 months of 2014, but the money they raised ac­counted for 64.7 per­cent of the to­tal funds raised by Chi­nese firms.

What is worth not­ing is that some In­ter­net startups, which are yet to be listed, have man­aged to raise funds from ven­ture cap­i­tal­ists, and in some cases, with even more amounts than those raised by com­pa­nies through IPOs.

The boom­ing In­ter­net sec­tor has also played an im­por­tant role in China’s econ­omy with do­mes­tic In­ter­net com­pa­nies and ser­vices be­ing part of the top gov­ern­ment of­fi­cials’ over­seas mar­ket­ing list in 2014.

A study by McKin­sey Global In­sti­tute said the business and eco­nomics re­search arm of global con­sult­ing firm McKin­sey & Co, the In­ter­net sec­tor could add 0.3 to 1 per­cent­age point to China’s GDP growth rate from 2013 to 2025.

This could fuel 7 to 22 per­cent of the in­cre­men­tal GDP growth through 2025, trans­lat­ing into 4 tril­lion yuan ($650 bil­lion) to 14 tril­lion yuan in the an­nual GDP by that point.

Hou Xiao­tian, chief an­a­lyst with T. H. Cap­i­tal LLC, an in­de­pen­dent re­search and in­vest­ment ad­vi­sory firm, said that the In­ter­net can not only be­come the new en­gine that drives China’s eco­nomic growth, but also change the model of eco­nomic growth by mak­ing it more in­no­va­tion-led, rather than la­bor-driven.

“More Chi­nese In­ter­net com­pa­nies are ex­pected to make moves in the over­seas mar­ket next year, much like what Alibaba did in 2014. Most of the Chi­nese In­ter­net com­pa­nies are still China-fo­cused, and to re­al­ize strong growth they need to ex­pand into other mar­kets and seize the grow­ing op­por­tu­ni­ties in mo­bile In­ter­net,” said Hou.


On­line shop­ping. The In­ter­net brought big changes to peo­ple’s every­day life in 2014 in China with apps be­ing de­vel­oped for almost ev­ery need.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.