China's netizen population which is the world's largest reached 648 million at the end of last year, 16 million more than in June, according to an industry expert.
The online economy accounts for seven per cent of the country's GDP, up from 3.3 per cent the previous year, said Jin Jian, deputy director of the China Internet Network Information Center.
More than 70 per cent of Internet users are worried by Internet security problems such as leaking of private information, Jin was quoted as saying by the Beijing Daily.
Vast majority of the people access online through smart phones and consumers are eager to spend online, the report said.
The expansion of the online population has resulted in the emergence of social media which pose a direct challenge to the monopoly of the official media in the country, it said.
Internet retail sales totalled 331 billion yuan in the first ten months in 2014, up a stunning 55.6 per cent over 2013.
The microblog media like Sina Weibo, akin to Twitter in China, is used by over 300 million Chinese, prompting the government to bring about detailed rules to regulate the content.
