Chinese Internet Boon Lead By Baidu, Tencent
The Chinese Internet Boom is pushing investors to invest in online companies such as Baidu.com Inc. (NASDAQ:BIDU), Sina Corp. (NASDAQ:SINA) and Tencent Holdings Ltd. which are set to offer the best returns in the Chinese Internet market which is set to see an increase in online spending in the coming years.
By next year, the online e-commerce transaction in China is set to double from its current values of $65 billion to $139 billion or 904 billion yuan. In 2010 the online e-commerce transaction total in China stood at 463 billion yuan. In the annual poll for Asian equity strategy of Investor magazine, the chinese brokerage topped the list.
According to the CLSA head of Internet research and Asia telecommunications, ecommerce in China is shooting straight up and the companies stepping into the online advertising market are on track to grab a major pie out of China’s e-commerce boom.
The major internet search engine of China, Baidu and the largest internet company, Tencent are boosting the money they spend on technology required to gain a bigger share of the China’s 477 million internet users, whereas investors are not stepping back in investing in these companies in hopes of doubling their profits. China represents the world’s largest online population and United States comes second.
Baidu is the largest search engine in China, with almost a monopoly in online search. With the exit of Google due to indifferences with the Chinese government over stringent internet laws, Baidu has complete control over the internet. However, Baidu has yet to profit as much as Google (NASDAQ:GOOG) profits from online search advertising.
Sina is set to become the top advertising platform. It is the third most visited website in China and will compete against Tencent. Tencent although a newcomer, is a strong competitor in the online advertising business. The share of Sina have increase by 54 percent in New York trading since its launch, followed by 32 percent for the shares of Baidu and 26 percent for the shares of Tencent.
The online internet traffic in China is also set to increase to 542 million, a 19 percent rise and will reach to 637 million by 2012. More than 55 percent of the citizens of China will have internet access by 2013 from the 40 percent which it currently stands at. Currently there are more number of internet users in China than the combines internet users of United States and Japan.
