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Poor infrastructure made it difficult to transition live streaming in China to mobile devices. However, at the rate the industry is currently expanding, Credit Suisse Group analysts forecasts it would reach $5 billion by the end of 2017.
The analysts have identified two Chinese livestreaming companies that would outperform the market. These are YY Inc. and Momo Inc, reported Bloomberg.
There are two factors that positively affect the revival of the streaming industry in China among users. These are the development of back-end infrastructure and a surge in demand from young users who do not have other alternatives and money for other forms of entertainment.
What facilitated the shift to mobile from laptop are the large number of internet celebrities “de-bottlenecks” supply, higher penetration rate of smartphones and primary market funding to make it easier to migrate from one device to another gadget.
For 2016, so far there has been a 175 percent hike year-on-year on revenue of livestreaming companies, allowing the total revenue of these tech firms to reach $4 billion, according to Credit Suisse. The boost in revenues is because of a higher level of affluence on the part of the live streamer compared to average internet users, longer time spent online and mature payment habits.
The report described the current market as divided among 150 platforms that would benefit from consolidation and characterized by low ceiling. It sees less than 10 firms dominating the industry and likely wiping out the smaller players.
Credit Suisse recommended the two because of YY’s loyal user base and mature ecosystem and Momo’s existing product which works with live streaming expansion. By 2018, the two would likely account for more than one-third of the industry’s projected market size of $5.4 billion.
The cost of livestreaming in China is between $100 and $150 per stream, according to Techcrunch.
