Startup 101: Surviving and growing in China’s internet arena

Over the past few months, the saying “the second half of the internet” has been frequently on my mind. Many entrepreneurs use this term to describe the development of the internet in China. Many people and entrepreneurs are waiting for new platforms and new forms of the internet because they feel it is really hard to acquire new users.

We now like to say that the period of demographic dividend has disappeared as the number of mobile phone users is increasing at a slower rate. With less new mobile phone users joining the market, we can no longer attract new users easily as we did before such as sending free gifts to encourage them to join social media platforms. This allowed us to acquire large numbers of users easily before. But now we realize that this has changed.

The opportunities for the second half of the internet 

The decreasing rate of new mobile phone users paint another picture. No new mobile phone users means there is no extra time to consume. We are already in this battle of time when companies create games in which they are no longer competing with others from the same industry, but they are competing with all app service providers. Though mobile phone users have little time in a day, the number of apps and other services have risen fiercely. Thus, users do not have much time to try new apps and services once they have chosen one to use. Just as I have made up my mind to use Evernote as my note application to write down ideas, I will no longer try any other new apps because I have purchased the premium membership. Changing to another app will be a loss for me, and I always lack time to try a new one.

evernote app
Photo from Pixabay

We are all steep into the battle with time. All apps and services want us to use their app and they will try to provide different incentives to make us stick with their apps. They want our time, but we lack time.

Meanwhile, we want some services to save time for us such as recommending which books we should read now, or which places we should eat at without waiting in line. We only have 24 hours a day, but we want to experience more and do more things during our limited time.

The survival of large and small companies 

What about the differences in survival and growth between large companies like BAT (Baidu, Alibaba and Tencent)  and small startups? How can they retain their users and gain new subscribers?

Though BAT companies have already accumulated large number of users in China and can control the entrance of new mobile phone users connected to the internet, they still face severe challenges as it is much easier for them to lose users than acquire new users. Once some users find new services that better suit them, they are more likely to go to another company. BAT companies have large user bases, and this will determine the services they will provide to satisfy the majority of their users.

There will always be some users that do not like the default services provided by these companies, and they will always try to find some other companies that provide customized services. These customized services are usually provided by some small companies that are aware that they cannot compete with BAT companies to provide general services as they do not have the initial user base.

For small companies, the conditions they encounter is becoming more and more serious. The first issue is that most small companies lack the capital to enlarge their scope of influence, and they also lack people with real ability to develop the company. Hence, small companies always try to offer customized services to satisfy users in this way to widen their influence and attract new members.

Acquiring new users through gift exchange no longer works, and users would rather pay for certain service add-ons later. In the past few years, BAT companies have accumulated billions of users by forming high barriers of entry so that incoming competition cannot easily repeat their success strategies. It is always hard for new startups to create something new as they face various problems and challenges.

Great service and attitude 

There is one thing that both large and small companies will devote time and attention to – that is to better satisfy their users with great service and attitude. The most important thing to retain users is to make them pleased with their services. Then, their users will recommend the companies’ services on their social media circles. This seems to be a better way to attract exposure.

We should now try and survive in a market that is experiencing slower growth, and with users tired of experiencing new services. Providing value added services is definitely a strategy companies large and small should adopt if they want to retain users.

(Top photo from

Kaikai Shi

Kaikai Shi writes for us. He holds a bachelor's degree in Biotechnology at Zhejiang University. His interests are in new technology and reading. Kai believes that new technology will change the world we live in, and is trying to engage himself in this process.

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