China stops publishing data metrics of vast domestic apps market amid declining internet service revenue, faltering economy

The Ministry of Industry and Information Technology has ceased to report China’s app data metrics since July this year
There were 2.32 million apps operating in mainland China at the end of June, down 8 per cent from 2.52 million at the end of 2021

Apps

Ben Jiangin Beijing

Published: 8:00pm, 3 Nov 2022

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The Chinese government has stopped reporting data metrics of domestic apps for the last three months without explanation, which makes it difficult for outside analysts to assess the health of this industry in the world’s largest internet and smartphone market.

The Ministry of Industry and Information Technology (MIIT), one of the government agencies responsible for regulating apps, started omitting this market segment’s data metrics from its monthly reports from July, according to the latest information on its website. This marks the first time the MIIT ceased to publish China’s apps metrics since the agency initially included the data in its August 2017 report.

It is not known whether the MIIT will later decide to release China’s app data metrics for the whole of 2022. The ministry on Tuesday released the country’s apps data metrics for 2021.

The MIIT did not immediately reply to a request for comment on Thursday.

The facade of the Ministry of Industry and Information Technology’s headquarters on Chang’an Avenue, near Tiananmen Square, in Beijing. Photo: Shutterstock

Omission of the app data metrics has come at a time when China’s internet industry, especially the mainland’s major app operators, struggle with a significant decrease in consumer spending and a faltering domestic economy amid continued strict Covid-19 controls, following a series of regulatory crackdowns.

There were 2.32 million apps being operated in mainland China at the end of June, down 8 per cent from 2.52 million at the end of 2021, according to published data from the MIIT. The latest number made up about half of the 4.49 million apps in operation at the end of 2018.

The number of apps that operated in China last year decreased by 930,000, which is equivalent to about 2,500 apps disappearing each day, according to the MIIT.

In its breakdown, the ministry found that the number of apps in each of the major categories – including e-commerce, video gaming, daily tools, news, education, lifestyle, and social media and communications – saw a significant decline.

China had 1.05 billion internet users at the end of June 2022, according to the latest data from the China Internet Network Information Centre. Photo: Shutterstock

While China has the world’s largest online population, with 1.05 billion internet users at the end of June, service revenue in this sector has decreased this year, according to MIIT data. In the first nine months of 2022, total internet service revenue in China reached 1.1 trillion yuan (US$151 billion), down 0.9 per cent from a year earlier. That was in sharp contrast to the 25.4 per cent increase in total internet service revenue for the same period in 2020.

The combined profits of Chinese scaled internet service firms, which the MIIT defines as those with annual turnover of more than 20 million yuan, fell 8.3 per cent year on year in the January to September period to 96.6 billion yuan.

Among the hardest-hit internet service segments were travel, ride-hailing, financial services and property rental, according to the MIIT.

The Ministry of Industry and Information Technology since last year has directed operators of various popular apps to rectify violations of data regulations under a series of crackdowns. Illustration: Shutterstock

The ministry, along with internet watchdog the Cyberspace Administration of China (CAC), has been at the forefront of Beijing’s crackdowns against excessive data collection, publishing misleading information and other offences by many popular apps.

On Thursday, the CAC named and shamed 135 apps for violating China data regulations.

In February, the MIIT published an updated draft on regulations that impose stricter requirements for the management and transfer of data, which gives it a clear say in reviewing cross-border data transfers.

Beijing last year passed the Data Security Law and the Personal Information Protection Law, which restrict cross-border data flows and enforce localisation. Enforcement of these laws has prompted a number of foreign apps, including LinkedIn and Nike’s Run Club, to throw in the towel in the domestic market.

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