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Cybersecurity market growing in China

By Gao Yuan (China Daily) Updated: 2015-12-15 07:57

Rising concerns over Internet security for Chinese companies is creating a growing market for data safety providers.

Qi Xiangdong, president of Chinese anti-virus software supplier Qihoo 360 Technology, believes the best times for cybersecurity companies are about to come.

"As the Internet is widely used in various sectors, an increasing number of companies are moving sensitive data online. Demand for Web security products and services is poised to surge in the coming years because company executives are starting to see information as a core asset," Qi said.

Samuel Sinn, cybersecurity service partner at PwC China, agrees.

He said new information technologies such as cloud computing and the interconnection of devices, known as the Internet of Things, have high-risk vulnerabilities if users are not equipped with the right tools to protect online data.

A PwC report showed a Chinese company had to respond to more than 1,200 information security incidents on average this year, five times higher than last year. Customer data, internal records and intellectual property were the most targeted information.

Chinese companies have already spent large sums preventing data theft. Information security budgets for Chinese companies neared $8 million this year, significantly higher than the global average of $5.1 million, according to PwC.

ABI Research, another industry consultancy, estimated that the cybersecurity market in the country is on track to hit $10 billion by 2017, double the size of 2012. The growing mobile Internet, online shopping and deeper integration of cloud computing in traditional industries such as energy, finance and retail will be the major drivers.

Michela Menting, a senior analyst at ABI, said: "As the market for Internet and mobile security products matures, especially at the consumer end, the demand for quality solutions and the focus on the end-user experience will become more important."

Customer information is frequently targeted by hackers around the globe.

In September, a long list of popular applications running on Apple's iOS mobile system were reported to have been infected with vulnerabilities that allow outsiders to spy on the devices and for passwords to be stolen.

This month, millions of customer accounts, including a large number of children's profiles at Hong Kong-based toy maker VTech were hacked.

"Data safety could become a life-or-death question today as we connect everything via the Web," Sinn said.

Because the majority of anti-virus software in China is free of charge, the country's Internet giants are placing their bets on smaller security firms that provide enterprise-level security services. The biggest buyers of security products in China are the government and State-owned companies in banking, energy and manufacturing.

ABI Research said that because security companies have to be vetted before entering the government procurement sector, local providers-who are more familiar with the regulations than their international competitors-have an edge in winning bids.

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