Beijing, March 07, 2017 ——China’s large mobile Internet companies will derive over 30% of their total revenue from overseas markets and the country’s online retail transactions will top RMB10 trillion (around US$1.5 trillion) by 2019, according to IDC’s latest report China Internet Industry 2017 Predictions.

The report presents an in-depth analysis of the growth conditions, policy direction, technologies and market trends, and development directions for key fields of China’s Internet industry over 2017-2020.

“Entering 2017, China’s Internet industry formally bids farewell to the fast growth of recent years, making an overall transition from an incremental market to a saturated market. However, emerging technologies such as artificial intelligence, Internet of Things and AR/VR have yet to reach the stage of large-scale commercialization and thus hold huge growth potential,” said Xue Yu , Senior Analyst at IDC China . “Facing the new circumstances, Internet and IT companies should pay attention to the R&D and application of emerging technologies and look to seize new opportunities for competition in this new era.”

Below are the top 10 IDC predictions for China’s Internet industry:

Prediction 1: “Internet+” will push forward the development of digital transformation (DX) economy.

By 2020, 40% of Internet enterprises in China will be working together with players in traditional industries to push forward their digital transformation.

Prediction 2: Government regulation and control will strengthen.

By 2018, over 60% of Internet business applications in China will be under the supervision of competent authorities.

Prediction 3: Cloud 2.0 will speed up IT ecosystem reforms in the Internet industry.

By 2020, Internet enterprises in China will allocate 75% of their IT infrastructure and software expenditures to cloud products and services.

Prediction 4: The grand AI curtain will be lifted.

By 2018, 67% of Internet products or services in China will employ some form of AI functionality. Enterprise applications will be the key to growth.

Prediction 5: Immersive interfaces will enrich Internet user experience.

By 2021, more than 150 million people in China will regularly use AR/VR platforms to access Internet applications, content and data.

Prediction 6: Chinese mobile Internet companies will expand their business to overseas markets.

By 2019, large-sized mobile Internet companies in China will receive over 30% of their revenues from overseas markets. India, Brazil, Southeast Asia and other emerging markets will likely be their main sources of revenue.

Prediction 7: The crowd-funding model will speed up innovation for Internet enterprises.

By 2019, 10% of new products from Internet companies in China will be developed through crowdfunding. This should raise the product promotion success rate by at least 40%.

Prediction 8: New Retail era of E-commerce will arrive.

By 2019, online retail transaction volume in China will top RMB10 trillion. Standardization, interaction, integration and globalization will become main development directions for online retail market.

Prediction 9: Offline operations will become vital to the success of on demand local services.

By the end of 2017, the Internet on-demand local services market in China will tend to be stabilized. All top online platforms will be collaborating extensively with offline merchants to enhance their operational abilities and customer experience.

Prediction 10: Video content self-produced by platforms will become the mainstream.

By 2018, more than 60% of the online video content in China will be made by the platforms themselves. Three to five video platforms are expected to be turning a profit by taking this move.