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Successful IT Services in China

Goals

To support a project correlating China's economic situation in 2010 with popular IT services, by analyzing a list of IT services/solutions that were released in China in that year. In order to do this, the name, website, sales figures, and whether or not it has been acquired should be provided. Only successful IT services with more than $10 million in sales should be considered.

Early Findings

  • The information technology sector can be broken down into four sectors: telecommunications, hardware, software and IT services.
  • In 2010, China had the most number of Internet users in the world with 457 million- double that of the US. They also had the most number of mobile phone users with 859 million users. At the time, it was worth CNY 10.7 trillion (USD 1.6 trillion), which represented a gain of 9% versus 2009.
  • IT enjoyed robust government support. It has been part of China’s Five-Year Plans since 2010, and was again called out as one of the seven major industries for focus in 2011-2015.


ZOOMING IN PER SECTOR: TELECOMMUNICATIONS

  • Mobile penetration continued to rise and was worth 70% of basic service revenue. The entire sector’s revenue was over CNY 3 trillion, which was a 20.5% increase from 2009.
  • Most of the sector is driven by big telecom equipment companies like Huawei and Alcatel.


ZOOMING IN PER SECTOR: HARDWARE

  • The market for hardware in 2010 was mature and concentrated on big companies like Lenovo, Toshiba, and NEC. However, China’s focus on acquiring technologies and building capacity means that importation of mobile phones had begun to slow. HTC held 9.8% of the market that year and was the second largest phone provider.
  • Xiaomi was launched on April 4, 2010. Their website is located here. In Q3 2019, the company had a revenue of 53.7 billion yuan which was a 5.5% increase vs. the same period last year. Their net profit also increased by 20.3%. Xiaomi is a public company that is listed on the Hong Kong stock exchange. It has not been acquired by any other company as of this writing.

ZOOMING IN PER SECTOR: SOFTWARE

  • The software sector was worth USD 203 billion in 2010, an increase of 31% from 2009. The sector also began to grow rapidly, as companies began to outsource processes. Design and development grew 73.1% in 2010.
  • The sector is also huge, fragmented and highly competitive. In 2008 alone there were 16,000 thousand registered software companies in China.
  • Government statistics put the combined revenue of the top 100 software companies at CNY 244 billion (USD 37 billion) in 2009.
  • Zhihu was launched in 2010 and is like a Chinese Quora, where questions can be asked and answered by users. The company is valued at nearly USD 3.5 billion. The website can be found here.

ZOOMING IN PER SECTOR: IT SERVICES

  • This sector is composed of almost all local players. Competitive advantage in 2010 relied on scale, geographical coverage, technical knowledge, price, and employee skills.

Proposed next steps:

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