Analysis of supply-demand relationship of information resource industry

Demand and supply factors are two driving forces that jointly push forward China’s information resource industry. In the process, they have different focuses and play different roles. They are not completely independent of one another, but are interrelated. In the initial and developing stages, supply and demand have consistent functions - both are affected by the level of regional economic development. They also have their own features. “Demand” stimulates the participation of information resource industry by adjusting the economic structure, while “supply” gives a direct push to the industry through capital input. Meanwhile, they work on each other. Supply is largely promoted by the increase of demand, and supply input can expand the market by attracting more demand through product increase. A system of mutual promotion is created. As far as China’s information resource industry is concerned, supply and demand factors have the commonalities and their respective features. While giving positive impetus, supply and demand factors are also hindering industry growth. Given existing problems and these features of the supply and demand factors, the Chinese government should develop appropriate policies to promote fast, stable, and healthy growth of its information resource industry.

Basic features

Indirect effect of the relationship

The indirect role of the supply-demand relationship means that suppliers of industrial resources (supplier) are largely not dir ectly related to the subscribers of information resources (demand). Instead, they trade with each other under a multilateral market system. This is caused in large part by the systems of non-cash payments and third-party payments in domestic consumption of information resour ces. Subscriber traffic and personal information will become valuable tokens in the process of consumption, and it is reasonable for free plans to prevail. As a result, no cash is used hr the consumption behaviors based on personal information and traffic, and the corresponding fee is paid by any third patty through advertisement or based on subscriber traffic. This is quite different from such developed regions as the United States and the EU where a large proportion of information consumption is paid by cash.

In this light, the interaction between supply and demand in China’s information resource industry is realized to a large extent through other entities or factors. Investors are willing to pitch in fonds because they see the value and opportunities revealed by information products and services marketed by advertisers at platforms, and advertisers are willing to launch advertisement because the information products and services can attract sufficient numbers of subscribers to their platforms. Under such circumstance, the relationship between supply and demand grows more complicated, highlighting the indirect effect.

Strong supply and demand driven by mass consumption

China is well recognized by its information resource industry achievements. Information resource industry enterprises represented by Alibaba, Tencent, Baidu, and Jingdong are powerfol in the global market largely due to substantial supply and demand. China has a surprisingly large subscriber group in terms of information products and services.

On the one hand, China has plenty of subscribers for information resources. There are two implications: first, a broad population is covered by network information resources. In 2015, China had the largest number of netizens in the world, more than 600 million. The subscriber base of major types of network information resources is numbered in the millions, and the usage rate of search engines is up to 80%. Second, network information resources can meet diverse public needs, and the public has strong consumption consciousness of information products and services. Search engines, for example, are the tool for subscribers to obtain information resources and to gain access to various information resources. “Baidu” has become a mantra of Chinese netizens who need information to solve problems in then work and daily life.

On the other hand, mass consumption indicates that the market value of network information resources is demonstrated by strong demand at both the supply and demand side. First, network information products can create profits for their content providers when being launched into the market as direct profitable products. Second, the platform for network information consumption has no limit in space. A massive reach makes it an important priority for marketing, injecting a strong impetus into the development of the industry.

Mutual transformation between supply and demand factors

In China’s information resource industry, supply factors can be converted into demand factors under certain conditions, and vice versa. For example, the subscribers of network information resources are not only subscribers but also content providers. The traditional model and new sharing model are combined for the consumption of network information resources. On the one hand, with personal information and subscriber traffic, operators are powered to receive advertising revenue or traffic fee from a third party. This is a key point connecting operators and a third party. On the other hand, subscribers contribute and share similar resources on their platforms. At video websites, subscribers will watch videos and upload their own videos. With richer resources, these websites can attract more traffic. At present, video websites with millions of subscribers have a large proportion in user-generated videos. At platfonns like “Baidu Knows,” one can ask questions or search questions for answers. They are both subscribers and respondents.

Subscriber demand represents the unity of content and form

First, content is the foundation of information products to meet subscriber needs. Second, form is a key element for information products to realize competitiveness and generate profits for operators. Based on subscriber demand, we should formally optimize the use of network information products so that we can promote sustainable growth of the network information industry, and in particular, the availability of a user-pay model.

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