China Boasts 731 Million Internet Users at End of 2016

(Beijing) — The number of Chinese internet users grew by 6.2% last year as smartphones consolidated their place as the primary access point for both web surfing and electronic payments in the world’s largest online market.

China had 731 million Internet users at the end of December, up 43 million from a year earlier, according to annual figures released by the China Internet Network Information Center (CNNIC) on Sunday. Last year’s growth was roughly the same as the 6% increase from the year before, as smartphones made the internet more accessible to millions.

The new total means China now has an internet penetration rate of 53.2%, still well behind Western countries like the U.S., which has nearly 90%, and more-wired Asian countries like Japan and South Korea, which boast 91% and 86% penetration respectively.

“China’s internet industry has reached a level of standardization and value creation in its development,” CNNIC wrote in a summary of the report. “At the same time, the mobile internet has promoted models that incorporate consumer sharing, smart technologies and a diverse range of other areas.”

The mobile internet has been a major driver of China’s growth, making the medium accessible to millions of people who lack fixed-wire services in China’s smaller towns and countryside. More than 1.3 billion Chinese have cellular mobile service now, moving the country near the 100% penetration rate.

Some 695 million people, or 95.1% of Chinese internet users, now access the web from their smartphones, up from 90% a year earlier. Mobile payments are also driving the online migration, with 67.5% of internet users now using electronic wallets to pay for goods and services. Half of all Chinese internet users now pay for goods at brick-and-mortar stores with their mobile wallets, the CNNIC said.

The agency also noted the growing use of internet payments to give to charity, with 238 million yuan ($34.6 million) donated from electronic wallets during the year. It said China now has 91 listed internet companies with a total market value of 5.4 trillion yuan, with industry leaders Alibaba Group Holding Ltd. and Tencent Holdings Ltd. combined accounting for more than half of that.

Contact reporter Yang Ge (geyang@caixin.com)