Internet means challenges, opportunities for China industries

While many Chinese manufacturing companies see the Internet as a big challenge to their businesses, a growing number of traditional industrial manufacturers have found another tactic. They're preparing for opportunities created by the fast-developingindustry. They're cooperating with Internet service providers in a variety of ways and using the Web as a way to improve corporate management and production efficiency, not to mention selling their products online. In a typical case, Guangdong Alpha Animation and Culture Co, which has operations ranging from animated program production to toy manufacturing and comics, announced plans in February to cooperate with Tencent Holdings Ltd, the country's largest and most visited Internet service portal, to develop online gaming products. "The Internet has been gradually integrated into almost every traditional sector. It will pose great challenges, as well as bring about opportunities, to the traditional manufacturing industry," said Lei Jun, founder and chief executive officer of Chinese smartphone producer Xiaomi Corp. The nation's Internet industry has grown to a huge scale, with three Chinese companies ranking among the world's top seven Internet service providers, according to Lei. The value of China's Internet service industry increased by 42 percent last year to 647 billion yuan ($105.3 billion), and it is expected to surpass 850 billion yuan in 2015, according to the Ministry of Industry and Information Technology. "The Internet provides symmetric information to customers and brings high efficiency to business. As a result, it develops very fast," Lei, also a deputy to the National People's Congress, said during the annual legislative session. Xiaomi's model-focusing on product research and sales while outsourcing manufacturing-has proved successful, according to Lei. The mobile Internet company offers high-capacity smartphones at a price below 2,000 yuan, not much above factory cost. "We are not making ordinary phones, which are only used for calling and sending text messages," Lei said.