en.Wedoany.com Reported - On May 6, 2026, China's Ministry of Industry and Information Technology (MIIT) released the "Q1 2026 Performance of the Internet and Related Services Sector." Data shows that in the first quarter, China's internet and related service enterprises above designated size (hereinafter referred to as internet enterprises) achieved internet business revenue of 502.7 billion yuan, a year-on-year increase of 10.6%. The growth rate remained stable, and the industry's performance demonstrated a positive trend of "increasing both revenue and profit."
Profit growth significantly outpaced revenue growth, becoming the biggest highlight of this quarter's data. In Q1, China's internet enterprises above designated size realized total profits of 55.84 billion yuan, a year-on-year increase of 60.5%, with the growth rate surging significantly compared to the same period last year. R&D expenditure maintained a relatively fast growth momentum. In Q1, China's internet enterprises above designated size invested a total of 27.32 billion yuan in R&D, a year-on-year increase of 16.8%, which was 6.2 percentage points higher than the revenue growth rate for the same period, reflecting the trend of internet enterprises continuously increasing their investment in technology R&D amidst the AI wave.
Regional performance showed a pattern of divergence. In Q1, internet business revenue in the eastern region increased by 11.1% year-on-year, accounting for 90.7% of the national total, continuing to hold an absolute dominant position. The western region performed impressively, with internet business revenue growing by 13.5% year-on-year, the highest growth rate among all regions. The central and northeastern regions faced downward pressure, with year-on-year declines of 10.6% and 24.6% respectively, highlighting the persistent issue of uneven regional development. At the key region and city level, internet business revenue in the Beijing-Tianjin-Hebei region grew by 14.8% year-on-year, 4.2 percentage points higher than the national average, accounting for 33.3% of the national total. Beijing, Guangdong, Shanghai, Zhejiang, and Guizhou ranked as the top 5 provinces (municipalities) in internet business revenue, serving as the core drivers of industry-wide growth. Internet business revenue in the Yangtze River Delta region increased by 5.6% year-on-year, accounting for 29.4% of the national total. A total of 16 provinces (autonomous regions, municipalities) nationwide achieved positive growth in internet business revenue.
From the perspective of industry operational characteristics, the gap between the 60.5% profit growth and 10.6% revenue growth in the internet sector reflects the improvement in operational efficiency brought about by AI technology empowerment—internet enterprises optimize content recommendation and delivery systems through AI, enhance advertising conversion efficiency, while new businesses like cloud computing and big data experience decreasing marginal costs due to economies of scale, leading to continuous improvement in gross profit margins as revenue scales up. The relatively high R&D expenditure growth rate of 16.8% indicates that leading internet enterprises are making forward-looking deployments in AI infrastructure and application layers, building technological momentum for future growth.
The performance of the internet industry in Q1 2026 positively echoes previous trends. According to earlier data released by the MIIT, from January to February 2026, internet enterprises above designated size achieved total profits of 30.8 billion yuan, a year-on-year increase of 23.1%, with profit growth already beginning to climb. Entering March, the industry's prosperity further warmed up, and the accelerated release of monthly profits drove a significant expansion in the overall profit growth rate for the first quarter. During the same period, profit growth in the software industry was only 1.0%, making the profit elasticity of the internet sector particularly prominent among various sub-sectors, demonstrating that internet enterprises possess strong profit recovery capabilities amidst economic cycle fluctuations.
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