China’s Internet industry needs to shift focus to progress

A recent report said that the consumption side of China’s Internet industry is highly digitalized, with new innovative applications and new business modes continuing to emerge. However, as a whole, the industry hasn’t reached a globally advanced level, reported on Jan. 30.

The report on China’s Internet industry was jointly released by Boston Consulting Group (BCG), AliResearch, and the Baidu Research and Development Center.

By March 2017, only 25 percent of Chinese factories were digital, compared with around 50 percent in the United States, according to a survey conducted by Capgemini, noting that China still lags behind other countries in core areas such as intelligent connectivity, information integration, data-driven decision-making and human-robot collaboration.

The survey indicated that despite considerable investment in industrial sensor manufacturing, China still has a long way to go before it catches up with the U.S.

However, industry insiders believe that China is expected to achieve significant progress in emerging technologies, such as automated driving. Data showed that in 2017, China ranked highly on a global scale regarding the size of start-ups, investment and number of talents.

Li Shu, a global partner of BCG, said the added value of China’s manufacturing industry accounts for only 21 percent of the total production value, while the figure in the U.S. stands at 37 percent.

A survey of 148 experts in the manufacturing industry in 6 countries indicated that the Chinese experts think business opportunities are created by providing better services and products for consumers, while German experts believe only the optimization of manufacturing can do that.

The BCG report also showed that the focus in China would shift to Internet-driven industries, which will require enterprises to switch their emphasis from boosting consumption and applications to developing the upper stream of the value chain.