Internet + Strategy in China

Marlon Mai April 22, 2016 2 mins read

Since “Internet+” appeared in the government report by Chinese Premier KeQiang Li, it became the hottest topic in 2015. Not only because it was promoted by Keqiang Li, but it was a good sign China’s development direction, and a sign of China’s government's increasing emphasis on the Internet industry.

The action plan of "Internet+" explained by government work report said to develop and integrate mobile Internet, cloud computing, big data and the Internet of Things with modern manufacturing, to encourage the healthy development of e-commerce, Internet banking, and industrial networks and to help Internet companies increase their international presence.

Study those typical “internet+” companies in China, like BAT(Baidu, Alibaba, Tencent), JD, Dianping, Xiaomi etc. They actually already changed traditional industries in a fundamental way and created new value to theagriculture, manufacturing and service sectors, by integrating Internet to these industries together with the encouragement and support by the Chinese government.

Thousands of startup companies were created with the Internet+business model. A new hotel room reservation service called “MiKe Information Technology” was found based on the Internet+ thinking in Chengdu and Shanghai last year. MiKe could lower their cost and improve accuracy of room bookingsfor their customers. In the first year they were facing tough challenges from both traditional travel agents and new OTA like CTrip & Qunar. This Internet+ business is now widely accepted by consumers as long as it proves to be more efficient and cost saving. 

However the manufacturing industry, it is still the foundation of China’s economy. “Internet+” is more a long term strategy to improve effiency and convenience. China is still driving these changes and depending less on the manufacturing sector. 

In general, China has been transforming from a follower into a major player in the world's Internet industry during the past decade(s). In the next decade it will be the time for China’s Internet sector to broaden its reach globally. With this “Internet+” strategy China will pursue its development opportunities with a global vision.

Marlon Mai's picture
Managing Director | Finance & Accounting, IT, Sales & Marketing Recruitment
mmai@morganmckinley.com

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