After 15 Years of development,  Chinese internet is now the biggest market with over 420millions users and has massive potential as the internet penetration is still around 32%. The recent news of Chinese companies such as Dangdang, Youku being listed in NASDAQ and companies like Tudou together with many others (i herad that there were around 40 companies) are in the pipeline seems summarizing one thing, the Glory of Chinese web.

Here are the companies which started the glory:

  • August 1996 – Zhang Zhaoyang set up a company which now is called Sohu
  • June 1997 – Ding Lei at his age of 26, set up the company called NetEase
  • September 1998 – Ma Huateng (Pony Ma) created Tencent
  • December 1998 – Wang Zhidong created Sina
  • June 1999 – Jack Ma launched Alibaba
  • January 2000 – Li Yanhong launched Baidu

As you can see, it’s been 15 years. However, today when we look into Chinese web to see who are dominating the market, people say there are 3 big companies, Baidu, Tencent and Taobao, together with 3 ‘small’ companies: Sohu, Sina and Netease. In other words, 15 years later since Sohu launched, the market structure of Chinese web still has no sign of change.

In west, we see Facebook replaced Myspace and reinvented people’s digital social life, now it even becomes the threat for Google; we see Twitter changes the way of communication; we see Groupon has reinvented the social e-commerce; and we see Foursquare is leading the new concept of Location-based Service. These companies have changed and dominated the market within several years and even several months, even though none of them have been listed yet. But in China, the local companies such as Tudou, Youku etc can be listed, but still it’s almost impossible for them to compete with those big guys. The chance for dominating the market is almost zero. And even worse, big companies in west are willing to buy startups, but in China, startups’ business module can be easily copied by giants.

We are lacking of Innovation. If we see something hot in west, loads of local companies want to copy everything. We know this is an issue, but few people want to change it because we are not lacking of investment money and many investors they are just following the deals in western market too.

15 years, we see big companies’ glory, but for startups, what can give them the dream and support their dream? If they can not dream, will these young entrepreneures have chance to repeat the same glory in next 5 years. I doubt!

Dr. Gang Lu - Founder of TechNode. He's a Blogger, a Geek, a PhD and a Speaker, with passion in Tech, Internet and R'N'R.

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1 Comment

  1. Solutions to revamp start-up creation could be:- Dominant companies start investing/buying more of the start-ups (instead of copying it, creating a less attrative services but leveraging their existing user base). This way entrepreneurs have possibilities to exit by selling their venture and start a new one. No need to way for IPO. Alibaba has a venture branch, what about baidu and sohu?- More successful entrepreneurs should be available to help/mentor the new generation (becoming angel for instance).- Market today start-ups success to encourage good developers to become entrepreneurs themselves. Blog like mobinode + Chinamoode are great input!- Make it easy to set-up an internet/mobile company (need government support)

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