Editor's Note:

In 2014, the information technology (IT) sector in China has seen more innovation and expansion than ever. The Global Times has chosen some of the key words and trends that have been thrown up in the industry's development this year. This is also the second of six issues dedicated to major aspects of the Chinese economy in 2014.

Clients of Alibaba Group clap their hands after ringing the opening bell on the New York Stock Exchange on September 19, the day when the Chinese e-commerce giant made its market debut. Photo: CFP

The IT sector has become one of the most lucrative industries in China in 2014, with more of its executives joining the ranks of the country's richest people.

Five of the top 10 richest men on the Hurun Rich List 2014 were from the IT sector, compared with only two in 2013. 

Jack Ma Yun, founder of Alibaba Group Holding Ltd, China's largest e-commerce company in terms of sales, was ranked No.1 on the list, with a fortune of 150 billion yuan ($24.15 billion). Alibaba recorded the world's largest-ever IPO in September, raising $25 billion in its flotation on the New York Stock Exchange.

According to the Bloomberg Billionaires Index on December 11, Ma's personal fortune is $28.6 billion, $300 million more than his nearest rival, Hong Kong tycoon Li Ka-shing.

In addition to new listings by IT companies, some other trends such as online payment have dominated news in the sector this year.

Foreign flotation

Getting listed overseas has become a recurring trend among domestic Internet and IT firms. Shares in Alibaba rose by more than 40 percent on their market debut on September 19.

Alibaba was not the only Chinese Internet firm to make headlines with its IPO this year. At least 10 others also unveiled IPO plans or got listed, including JD.com Inc, which made its debut on NASDAQ on May 22.

The most recent overseas listing by a domestic Internet company was location-based social networking platform Momo Inc, which floated on NASDAQ on December 11.

Companies from the Chinese mainland that have floated on the New York Stock Exchange contributed $25.8 billion, or 35 percent, of total funds raised by the bourse so far this year, according to a report by Ernst & Young on Wednesday.

Red envelopes

Chinese traditional red envelopes went digital ahead of this year's Spring Festival holidays, with various Internet firms launching online apps enabling smartphone users to send cash gifts to each other.

Alibaba launched a service on January 24 via the firm's online payment arm, Alipay, which allowed people to give virtual red envelopes to other Alipay users.

Tencent Holdings, China's largest Internet company in terms of revenue, also launched a new red envelope function on January 26 for the 600 million users of its WeChat online messaging service.

On January 31, the first day of the weeklong Spring Festival holidays, 5 million WeChat users signed up for the red envelope promotion, which required them to connect their bank cards to the WeChat app.

Analysts said the move by Tencent could give the company a lift in its competition with Alibaba in the online payment service arena, as relatively few people had been using the payment tool offered by WeChat before the promotion.

Since the launch of red envelopes by Tencent and Alibaba at the beginning of this year, more Internet companies have joined the trend, such as Didi Dache, a taxi-hailing app, which started a red envelope campaign to attract users. Customers can use the red envelope as a kind of coupon to pay taxi drivers via the Didi Dache app.

Online to off-line

Online shopping and payment have become common choices for consumers, and online payment platforms have started to expand into the off-line shopping arena.

Alipay began a promotion encouraging consumers to pay via its online payment tool when they were shopping in physical stores on December 12, or "double 12," a new online shopping event for Chinese consumers. Consumers paying through Alipay were offered discounts of up to 50 yuan in around 20,000 physical stores and restaurants nationwide.

According to media reports, Alipay provided subsidies worth around 100 million yuan to consumers on the "double 12" day to encourage users to pay off-line via Alipay. Online to off-line (o2o) payment is expected to be the next important arena for Internet companies to capitalize on.

Nokia

Nokia has been one of the key names in the IT sector in 2014, partly because the company's problems have raised so much discussion about development trends in the mobile phone sector. Analysts have suggested that closer cooperation with the Internet sector should be an important way for mobile phone firms to survive amid the intense competition.

A Nokia staff member was quoted by the Beijing News newspaper in July as saying that over 90 percent of about 5,000 employees of Nokia's research center and factories for handset hardware would be laid off. No further details have been released since then.

An industry insider, who declined to be named, told the Global Times Sunday that Nokia had suffered a "dramatic sales decline," which was partly because the company "had not paid enough attention to smartphones when other companies such as Apple first stepped into this area."

"Nokia also performed badly in online sales," he noted.

Meanwhile, mobile companies such as Xiaomi Technology Co, which has seen fast development in 2014, have all performed well in online sales and online promotions.

Leading PC maker Lenovo Group also said it planned to step into the Internet sector. It announced on October 15 that it would launch a new Internet company, which will focus on mobile devices and services and will start operation on April 1, 2015.

Set-top boxes

In 2014, set-top box makers faced a series of tough challenges.

The State Administration of Press, Publication, Radio, Film and Television, the country's media supervisor, launched a campaign in June to enforce regulations for Internet TV sets and set-top boxes, which led to almost all major video websites suspending their TV services.

Youku Tudou Inc, a leading video website in China, shut down its TV service on September 23. Another online video provider, iQIYI, also said in a notice on September 26 that it was stopping its TV service in accordance with the regulations. 

Video websites and TV manufacturers have been looking for solutions to the tightened regulations, with some of them strengthening alliances with cable TV operators.

Others have tried to adjust their business structure amid intense competition in the online video sector.

LeTV Information Technology Co, an online video content provider and Internet TV manufacturer, announced on December 9 that it will develop an electric car featuring Internet technologies.

Global Times