Entrepreneurs are finding the road to internet riches in China increasingly tough. It was never easy but now a thicket of regulatory issues, stiff competition and a frontier mentality that leads to frequent underhand practices has made it a lot harder.
The country’s web 2.0 phase has become much more complex, cluttered with companies trying to find their niche in everything from social networking, to gaming and video sharing —- many armed with a large amount of capital and support from venture capital firms.
Founders of several start-ups at one of China’s top internet shows in Beijing said it is now harder to enter the market given the intense competition and a pattern of bigger firms copying lucrative ideas.
Edward Liu, chief executive of Beijing Fastweb, a start-up that provides fast data transfer over the internet said most of the biggest online categories, such as search, retail and auctions, are already dominated by the biggest names, while niche areas are also crowded with players looking for the next big thing.
Vincent Xu, president of PPS, a video streaming website, said, "In 3G and mobile Internet there is a chance for success. The other sectors in the traditional Worldwide Web, they have dominant players already and it’s hard to break their dominance. My personal opinion is that there isn’t much space in the industry anymore."
Leon Lee, vice president of Chinese mobile internet firm KongZhong, said, "It’s always the case in China, that’s the way of doing business, if you start something popular it may get copied. But you live with it."
Reuters reported that Zhao Wenxiang, co-founder of tiny mobile internet start-up Hesine with around 10 employeess said, "There are plenty of chances to make money in the tech industry, but the risks of getting bought up is always there." This is a risk?