Companies such as Indonesian ride-hailing company Go-jek, Japan’s LINE messaging app and even Facebook in the US are now moving towards the super-app model, originally pioneered by Tencent’s WeChat, the report found. The WeChat messaging app offers users a range of services from making mobile payments to ordering food deliveries, that can all be accessed without leaving the app.

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China is also leading the way in social e-commerce as well as short video. The short video craze was popularised by TikTok, an app by Chinese company Bytedance, that allows users to post 15-second video clips. TikTok took the world by storm and became the most downloaded app on the iOS app store for five consecutive quarters.

Another key trend for China technology this year revolves around China’s ambitions to lead in next-generation 5G technology networks. China currently holds the most number of 5G patents, and has 5G pilot projects going in over a dozen cities with a total population of 167 million, according to the report.

Artificial intelligence (AI) is also being used on a massive scale in China, with applications ranging from paying one’s subway fare or checking into a hotel using facial recognition, to making custom recommendations for online shopping or browsing news online, the report found. AI is also used widely for surveillance purposes, such as helping authorities track down fugitives on the run or enforcing traffic laws.

Last year was a bumper one for Chinese tech IPOs, with 56 technology, media and telecommunications (TMT) firms listing – half in Hong Kong and half in the US – compared to only 12 such IPOs in 2017 and 11 in 2016. Two of the biggest IPOs last year were from on-demand services provider Meituan Dianping with a market capitalisation of US$45 billion and China Tower, a telecoms tower construction firm, with a market cap of US$44 billion.

The most active venture capital firm in China last year was Sequoia with 247 deals, followed by IDG Capital with 127 deals and Matrix with 102.

One of the key themes identified in the first China Internet Report was how the Chinese internet empowers the country’s rural population. That remains true a year later, with the number of internet users in rural China up 13 million to 222 million in 2018, increasing the penetration rate from 35 per cent to 38 per cent.

Lesser developed Chinese cities still have huge untapped potential for e-commerce. There are 128 million internet users in third tier or below cities who have not yet bought anything online versus 74 million in second tier or above cities, according to the report.

Pinduoduo’s rise is being driven by users from lower-tier cities while China’s e-commerce market leaders are also targeting lower-tier cities. Online major JD.com, for example, has shifted its focus to third and lower tier cities this year

The visible hand of the Chinese government was another theme that carried over from last year. Fintech, gaming, and content-driven internet companies continued to face tight restrictions by government authorities.

The Chinese government suspended licensing for new games for 9 months last year, causing the gaming industry to experience its slowest revenue growth in over a decade.

In January 2018, the Cyberspace Administration of China scrubbed the web of more than seven million items, deleting more than 9,300 smartphone apps to screen out information deemed inappropriate or harmful.

The China Internet Report provides deep dives into 11 key sectors that make up China’s technology landscape – including e-commerce, social and messaging, the sharing economy, 5G, AI, smartphones and smart devices. Expert commentary from industry leaders such as Lee Kai-fu of Sinovation Ventures, Razer chief executive Tan Min-liang and Eric Xu, managing partner of GGV Capital, are included in the report.

“Technology has been a central piece of the US-China trade war, so understanding what is driving tech in China is essential knowledge in today’s world,” said SCMP’s technology editor Chua Kong Ho.

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“Tech companies from around the world are taking cues from new digital innovations and new tech business models in China driving the fourth industrial revolution. The China Internet Report will be essential reading because of China’s internet industry’s growing global influence,” he said.

Proof of Capital’s Yeung, who co-authored the report with the Post and Abacus, said it will “help any reader have a clearer grasp on the technology trends shaping China”.

“We are excited to share new insights with the world to better understand the vibrant dynamic internet landscape in China and its digital innovations that drive the transformation of payments, blockchain, retail, e-commerce and education,” she said.