Mobile growth causing buzz

Updated: 2012-10-05 11:53

By Chen Jia in Palo Alto, California (China Daily)

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China's booming electronics sector is tapping into the world's hunger for mobile Internet services with technological shifts that are roiling the market.

"All the banks and various institutions in the United States have seen the trend of transforming from the Internet age to the mobile-Internet age," said Lucy Peng, chief people officer of e-commerce giant Alibaba Group and CEO of its Alipay online-payment unit. "They are all thinking about how to catch up the trend and use mobile Internet in their business."

The annual China 2.0 conference on Sept 28, organized by Stanford University's Graduate School of Business, brought together tech leaders from China and the US to discuss forces driving the growth of China's Internet industry and global implications for communications, commerce and content.

Peng preceded her attendance at China 2.0 by going on a weeklong market-research trip. She and assistants visited several US retailers and downloaded mobile-payment apps to see if they would work.

"You can imagine how big the market would be if Chinese mobile users got used to paying for their shopping through their phones instead of cash or a bank cards in the future," she said.

According to Kleiner Perkins Caufield & Byers, a Silicon Valley venture-capital firm, global mobile traffic accounted for 10 percent of all Internet traffic as of May, up from just 1 percent in 2009. China ranks third in the world in the number of subscribers to third-generation, or 3G, mobile technology.

Propelled by emerging markets, the speed of growth in the Chinese sector is first worldwide, with a 12 percent annual increase, Kleiner Perkins Caufield & Byers found.

Mobile-ad sales in China more than doubled to 2.4 billion yuan ($379 million) last year, according to iResearch.

With 1 billion mobile subscribers, more than half a billion users overall and a high rate of smartphone adoption, the Chinese Internet has become a major catalyst for investment and innovation, several VC investors said at China 2.0.

Robin Li, co-founder of China's biggest search engine,, spoke on Winning the Future in the Mobile Internet.

Though Baidu hasn't determined how best to make money from mobile services, the company doesn't have a wait-and-see approach, Li said.

According to him, 25 percent of research and development in Baidu has been spent on mobile, even though smartphones make up less than 10 percent of the company's total sales.

"Exactly when it will become a material source, I don't know," he said. "I'm in no hurry to figure that out because we know there is lots of room for improvement (in mobile advertising). "

Baidu recently introduced a browser for devices that run Google Inc's Android operating system, as part of an effort to become smartphone users' "front door" to the mobile Web.

Tech industry people at the event said online entrepreneurs are in the driver's seat in China, aided by increasingly deep reserves of venture and private-equity capital.

"What I found powerful is entrepreneurial drive," former US ambassador to China Jon Huntsman said at China 2.0. "The ability of the younger generation to understand the marketplace, to capture opportunities for the intellectual network - this is the power of China tomorrow," he added.