Increase comes as smartphone sales jump, e-commerce expands

The number of Chinese people accessing the Internet via mobile devices increased to a record high of 420 million at the end of December, and mobile shopping - a quickly expanding mobile application - saw its users reach 55.5 million, a report said on Tuesday.

Mobile Internet users accounted for 74.5 percent of the nation's total Internet population, which stood at 564 million, amid a slower growth rate since 2010, according to a report from the China Internet Network Information Center.

"There is great potential in the mobile Internet as an increasingly large number of smartphones hit the market," said the report.

Mobile Internet is the hottest area in the IT industry as mobile phones become the most widely used devices to access the Internet. Industry players have spent large sums over the past two years to attract users.

The nation's biggest Internet companies by sales - Tencent Holdings Ltd, Alibaba Group Holding Ltd, and Baidu Inc - have entered the mobile Internet sector in a number of ways, including offering self-developed mobile operating systems and providing mobile applications.

Among the wide range of services on mobile devices, mobile shopping witnessed rapid expansion in the second half of 2012, said the report.

"Shopping on mobile devices has become an important driver of the growth of online shopping in China," it said.

The number of shoppers on mobile devices grew 136.5 percent year-on-year in the second half of 2012 to 55.5 million, compared with the nation's 242 million online shoppers in the same period.

Alibaba Group, which has a more-than-70 percent share of online retail sales in China, may have 10 to 20 percent of its business coming from mobile devices, said Qiu Lin, an Internet stock analyst at Guosen Securities in Hong Kong.

On Nov 11, when the e-commerce giant launched an online shopping promotion through its Tmall.com and Taobao.com, sales on the two websites reached 19.1 billion yuan ($3 billion), with mobile devices being responsible for around 1 billion yuan of these, said the company.

Online sales make up a tiny proportion of all retail sales - around 4.32 percent last year - but it has become the main way to shop in some categories.

Research company Roland Berger estimates that around 25 percent of books were sold online in China in 2011, making it the most popular online category.

Online shopping is also expected to account for around 20 percent of all electronic devices sold, 10 percent of sportswear, and 6 percent of mother and infant-care products.

Everyday goods, furniture and food, on the other hand, are purchased far less online.

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