According to a report by DCCI, Data Center of China Internet, internet-related spending in Mainland China rose by 50% in the first half of 2008. This figure includes spending on online shopping, connection charges, internet games and online community services, including social networking sites, blogging sites, chat rooms and bulletin board sites. Online shopping made up the greatest proportion of the growth, 47.3%.

The DCCI report states that internet-users in China spent $37 billion on online shopping in the first half of 2008. The growth in expenditure is attributed mainly to the rise in the number of Chinese with access to the internet, which is thought to be due to lower connection charges. The internet population in China has risen rapidly, currently standing at 221 million, surpassing the US; it is expected to reach 263 million by the end of the year, representing a 25% rise.

DCCI, which monitors internet business independently, also said that individual user spending on internet-related services was up by approximately 14%, yet per capita monthly income had risen by only 11.4% over the same period. These figures appear to indicate that the growth in Mainland Chinese internet-related spending is rising faster than the average monthly rise in the consumer price index, which measures the rate of inflation.

China’s soft gaming industry is booming – and it is predicted to grow even further... According to a report by CNNIC, China Internet Network Information Center, there are at present over 120 million online gamers in China and revenues from the soft gaming industry reached around $1.3 billion by the end of 2007. The figures, and the fact that China represents the largest, and fastest growing, online population, combine to make it an extremely attractive prospect for foreign investors. A number of foreign gaming companies have already staked a claim and bought into the market - despite changes to regulations, which stipulate that foreign companies must operate in partnership with local companies. However, there seems to be a loophole in the new regulations, as companies operating from outside China do not have such a limitation; they are merely required to hold an ICP, Internet Content Provider license and to register a company locally.

One European company that is doing extremely well in the soft gaming scene in China is the Dutch company, Spill Group. Spill Group was one of the very first foreign game companies to enter the Chinese market and opened an office in Shanghai in 2006. The group currently owns Game.com.cn and Xiaoyouxi.com, both of which it acquired over the last two years. Both portals’ user bases are growing at a rate of 15% to 20% per month and they already each have around 1 million users online at any given time. Marc van der Chijs, Spill Group’s CEO for Asia, has been reported saying that, for now, the company has no plans for further acquisitions in China, but that they intend to concentrate on developing new mobile games, working in cooperation with some local companies. Meanwhile, the company is focusing on a range of non-gambling, online games, which can be played alone, or against other players.

Entertainment and recreation are the most popular uses of the internet with China’s 221 million internet users and, as more and more women spend time on online games’ sites, the sites are becoming very interesting to advertisers. In fact, most of Spill Group’s revenue comes from advertising.