TECH GIANTS AND TOP INTERNET BUSINESSES IN CHINA
China’s top Internet giants are 1) Alibaba, retail giant and owners online marketplace Taobao, which has seen off competition from Amazon and Google to compete,valued at US$235 billion; 2) Tencent, owner QQ web portal, WeChat app and many popular games, valued at US$230 billion; 3) Baidu, China’s biggest somewhat Google-like search engine, valued at US$58.5 billion; 4) Didi Chuxing, the dominant taxi-hailing and food delivery app, backed by Apple, Alibaba and Tencent, valued at US$35 billion; and 5) Sina, owner Weibo, China’s Twitter-like “microblog”service, valued at US$9 billion. [Source: The Telegraph, 2018]
The Chinese Internet industry has long been dominated by the BAT trio, with Tencent as the market leader but a new generation of digital powerhouses is now challenging them. The BATs — Baidu, Alibaba, and Tencent — are China's three technology titans. As the country’s most popular search engine, Baidu held the largest share of PC search engine users in 2019. Meanwhile, the Alibaba Group offers a variety of e-commerce services with the domestic retail segment being its largest revenue generator. Similarly, Tencent Holdings, of the WeChat and QQ apps fame, earned most of its revenue through its value-added services. [Source: Lai Lin Thomala, Statista, April 29, 2022]
While being the underdogs of the Chinese IT scene, domestic companies such as ByteDance, Meituan and Didi Chuxing have received global recognition for their software services. As of September 2020, ByteDance, the creator of TikTok and its Chinese sister app Douyin , accounted for 15.4 percent of China’s mobile app usage time which was second only to Tencent. Meituan, which is famous for its food delivery app, alone earned 114 billion billion yuan worth of revenue in 2020. On the other hand, Didi Chuxing has provided an alternative to Uber having catered to the majority of China’s ride sharing demands.
Leading internet companies in China as of 2021, based on market valuation(in billion yuan)
Tencent Holdings: US$ 580 billion
Alibaba Group: US$369 billion
ByteDance: US$334.6 billion
Meituan Dianping: US$210 billion
Ant Financial: US$149 billion
JD.com: US$134 billion
Pinduoduo: US$98 billion
NetEase: US$75 billion
Baidu: US$52 billion
Kuaishou: US$49 billion
Didi: US$38 billion
Internet Business in China
China’s younger generation was born and has grown up in the digital age and sometimes described with the expression ‘digital natives’. Michael Keane wrote in Creative Transformations Asia: In March 2015, the President Xi Jinping-led government announced a new policy agenda called Internet+. In the previous two years the leaders of China’s online companies, particularly Alibaba (Jack Ma/ Ma Yun), Baidu (Robin Li/ Li Yanhong) and Tencent (Pony Ma/ Ma Huateng) had been shopping the idea of ‘Internet Thinking’ as a way of transforming China’s economy from an emphasis on physical production and manufacturing to advanced services. The goal of Internet+ therefore is to ‘reboot’ the economy. The plan is even touted as the ‘uberisation of the Chinese economy.’ The technological frontier includes next generation information networks, core electronics, high-end software and new information services. Particularly in coastal cities such as Beijing and Shanghai the emerging technologies of mobile internet, cloud computing and big data are driving the ‘upgrade’ of cultural and creative industries. [Source: Michael Keane, Creative Transformations Asia, May 2016]
“Digital technologies are transforming the relationship between culture, creativity and innovation. Thanks to the entry of the cash-rich IT-based ‘digital champions’ into the market new forms of production, distribution and consumption have evolved for screen-based content. The new digital champions, including Baidu, Alibaba and Tencent, as well as Huawei and Xiaomi, are expected to shoulder the innovation agenda and help mass innovation to come to fruition. The term disruptive innovation is worn as a badge of honour, or perhaps as a calling card to Silicon Valley. The problem is that having close links to government is a double-edged sword in regard to internationalisation. Yet there is no doubt that these companies are providing training grounds. Much of the start-up scene is comprised of former ‘workers’ from Alibaba and Baidu, who have learned to code and are now willing to take up the offers by local government and realise their Chinese Dream. In Hangzhou the government is even dispensing ‘innovation vouchers’ to successful applicants
“In Hangzhou, Alibaba’s rise is itself a Chinese Dream. Founder Jack Ma is never far from the news, making deals, dispensing business wisdom, offering homespun advice to the younger generation. Perhaps his advice should be to keep copying international ideas and then add local innovations. Alibaba have established Taobao Movies (an online app for ticketing and social networking) and Yulebao (a film crowdfunding model), along with its online retail site, TMall. Alibaba has established Alibaba Pictures Group and has made its first Hollywood movie investment, partnering with Paramount Pictures to make and promote the studio’s next instalment of the Mission Impossible franchise in China. The title of Alibaba’s own book, now adopted as a university media text, tells it all — Internet Plus: from Information Technology to Digital Technology.
Technology Centers in China
A number of chip makers and high-tech firms have up shop in the Shanghai and Beijing areas. Zhongguancun, in the Haidian districts in northwest Beijing, is sometimes called the Silicon Valley of China. It is the home of many Internet and computer firms as well as 40 universities and 138 scientific institutions and many of China’s 810,000 research scientists and engineers. Microsoft has a major research facility and Tik Tok began here.
Michael Keane wrote in Creative Transformations Asia: In Beijing’s Zhongguancun hi-tech area, Inno Alley, on the site of the former Haidian Book Town, offers a start-up environment frequented by Angel investors and Venture Capitalists. Indeed the amount of venture capital pouring into China’s internet and startup sector is quite staggering. Inno Alley opened in 2014, about the same time as Hangzhou’s aptly named Dream Town, a training facility near the West Lake for would be digital entrepreneurs, linked to the equally ambitious Cloud Town project, the latter offering successful projects a chance to collaborate with Alibaba. [Source: Michael Keane, Creative Transformations Asia, May 2016]
Shenzhen is also a major technology center. It has evolved beyond its manufacturing roots to become a hub for service industries — especially technology and design. Also often described as "China's Silicon Valley," the city is home to huge tech companies like Tencent (which itself built two skyscrapers there) and a network of thousands of smaller firms.
Hangzhou is about two hours from Shanghai. Yue Wang of Forbes wrote:“Hangzhou is shaping up to be a symbol of China’s transition from a low-cost manufacturer to a more technology-powered growth. The Chinese e-commerce giant Alibaba was founded in a small lakeside apartment in Hangzhou in 1999. The group is still headquartered there, with several sprawling facilities hosting tens of thousands of employees. Alipay, the payment app operated by Alibaba affiliate Ant Financial, now allows residents to pay restaurant, shopping, utilities and transportation bills with a single swipe of their smartphones. [Source: Yue Wang, Forbes, September 2, 2016]
“Hangzhou is also home to smaller tech startups. Chinese social shopping company Mogujie and baby product site Beibei are also headquartered in the city. In January, Mogujie merged with its Tencent-backed rival Meilishuo in a deal valuing the new company at US$3 billion. Hikvision, the world’s largest supplier of video surveillance equipment, is also based in Hangzhou.
“Many of these companies have a connection to Alibaba. Mogujie and Beibei’s founders worked at the e-commerce group before striking out on their own. Healthcare startup Ding Xiangyuan once hired Alibaba veteran Feng Dahui as its chief technology officer. Alibaba founder Jack Ma is also expected to promote his trade initiative Electronic World Trade Platform, or e-WTP, that connects small businesses worldwide through a global e-commerce platform, during the meeting.”
Chinese Internet Business in Booming Early and Mid 2010s
China's Internet and technology sector industry, much like China itself, went a great transformation in the early and mid 2010s. Entrepreneurs talked about an innovation "golden age" fueled by a mobile-device-obsessed culture, upward economic mobility and an influx of capital from investors locally and abroad. "China is going through an extraordinarily innovative period," Eric X. Li, a venture capitalist and political scientist in Shanghai, told the Los Angeles Times in 2014. [Source: Andrea Chang, Los Angeles Times, December 25, 2014]
Andrea Chang wrote in the Los Angeles Times: “The stunning success of Chinese e-commerce behemoth Alibaba, which went public on Wall Street in September 2014 and has become a $263-billion juggernaut with far-flung interests in areas such as entertainment, mapping and banking. "It proved one thing, which is you can grow a company pretty much from ground zero to a very high level. It gave young graduates a good example," said Lingyun Gu, an investment advisor at Beijing-based IDG Capital Partners.
“China for years has been laying the groundwork to become an innovative tech power player, not just an electronics manufacturing machine. The government subsidizes and promotes numerous high-tech clusters around the country, and university-affiliated and independent incubators have stepped in to nurture young entrepreneurial talent. In the second quarter of 2014, investments in China's fast-growing telecommunications, media and technology companies totaled $5.35 billion across 214 deals, the cash coming from inside and outside China. That was seven times more than the $752 million the industry received in the year-earlier quarter, according to a recent MoneyTree report from PricewaterhouseCoopers. "China's private equity and venture capital investment in the telecommunications, media and technology industry is now in full swing," the report said.
“There are several reasons for the boom. First, it takes a lot less capital to start a tech company than in the past, thanks to the widespread availability and affordability of cloud computing and other business services that have brought costs down. That's true around the world, but especially helps countries like China, where millions of would-be entrepreneurs now have a chance to get a foothold. c "You don't need as much money as you did 30 years ago, and we believe the pace of establishing new start-ups is getting shorter and shorter," said Gu, who estimated that many fledgling companies take just three months before they're ready to approach venture capitalists for funding.
“There are China-specific factors as well. Many of America's stalwart tech companies, including Facebook, Twitter and Google, are heavily censored by the government in China, leaving room for homegrown services to step in. Entrepreneurs also point to an Internet culture centered around the smartphone. Many middle-class families in China never owned a personal computer or television, jumping directly to mobile devices as they became more affluent.
“There's also a new entrepreneurial spirit found among Chinese youth that didn't exist just a generation ago, Gu said. As China has grown into a strong economic force, young people are more educated, have fewer financial burdens and have been freed from the pressure of immediately joining the workforce in the hope of landing a stable and lucrative job, he said. "Their minds are very open," Gu said. "If you put everything together, it makes them one of the best groups to be the new entrepreneur." Tom Mariner posted: “My Chinese colleagues are smart, ambitious, getting to be innovative. My simplistic reason is they believe in technology and in their country — like the mid-twentieth century United States. They honor their technical adventurers, not those who entertain or make rules as...
“Jennifer Xu left China to attend Harvard Business School but moved back after getting her MBA in 2011. Last year she founded Green Apple, a Shanghai-based mobile healthcare start-up that connects doctors and patients for appointment scheduling and pharmacy orders. The app, which quickly received its Series A funding from angel investors, launched in March and currently has thousands of doctors on its platform. "It's the best time for entrepreneurs," she said. "The mobile health sector is super active now and the venture capitalists are chasing after deals."
“U.S. venture capitalists doing deals in China describe a booming space not unlike what is found in Silicon Valley, although the energy and pace are even more intense. Techies are experimenting in an array of sectors including online media, mobile, alternative energy and gaming.
Alibaba (officially Alibaba Group Holding Limited) is a Chinese multinational technology company specializing in e-commerce, retail, technology. Internet and financial services. Founded in 1999 by its leader Jack Ma and 17 others and based in Hangzhou, two hours south of Shanghai,, it is China’s largest e-commerce company, business-to-business site (B2C), Internet retailer and online auctioneer. In addition to B2C Alibaba also provides consumer-to-consumer (C2C) and business-to-consumer (B2C) sales services via it web portals. The company also runs lucrative electronic payment services, shopping search engines and cloud computing services and owns and operates a diverse portfolio of companies around the world in numerous business sectors. [Source: Wikipedia]
Alibaba is worth more than Facebook and processes more goods than eBay and Amazon combined. Alibaba is traded on the New York Stock Exchange, the Stock Exchange of Hong Kong and the Frankfurt Stock Exchange and licensed in the Cayman Islands Its initial public offering (IPO) on the New York Stock Exchange in September 2014,raised US$25 billion, giving the company a market value of US$231 billion. It was the largest IPO ever at the time. Alibaba has been named one of the top 10 most valuable corporations and was listed as the 31st-largest public company in the world on the Forbes Global 2000 2020 list. In January 2018, Alibaba became the second Asian company to break the US$500 billion valuation mark, after its competitor Tencent. As of 2020, Alibaba has the sixth-highest global brand valuation. [Source: Wikipedia]
As of 2020 the Alibaba Group was the world’s the biggest ecommerce retailer and Jack Ma was one of the world’s richest people. At that time Alibaba controlled over 50 percent of China’s ecommerce market and the Alibaba Group owned multiple ecommerce sites. In 2020,
Tencent is a Chinese multinational technology and entertainment conglomerate and social networking and gaming giant. Headquartered in Shenzhen, it one of the highest grossing multimedia companies in the world based on revenue. It is also the largest company in the video game industry in the world based on its investments. It operates the instant messengers Tencent QQ and WeChat, and QQ.com and also owns Tencent Music. Its stock value in July 2008 was $15 billion, making it one of most valuable Internet companies in the world at that time. In comparison Amazon.com was worth $30 billion. In 2021, Tnecent’s revenues were US$86.84 billion, its operating income was US$42.11 billion, its net income was US$35.32 billion and its total assets were US$249.98 billion. [Source: Wikipedia]
Founded in 1998, its subsidiaries market various Internet-related services and products globally, including in entertainment, artificial intelligence, and other technology. The company is headquartered in the twin-skyscraper Tencent Seafront Towers (also known as Tencent Binhai Mansion) in the Nanshan District of Shenzhen. The company’s services include social networks, web portals, music, e-commerce, mobile games, internet services, payment systems, smartphones, and multiplayer online games.
Baidu is a tech company specializing in search and web services and artificial intelligence. Based in Beijing and listed on Nasdaq, it is one of the largest AI and internet companies in the world.
Baidu was founded in 2000 by Robin Li and Eric Xu with an early investment from Google and quickly established itself as China’s largest search engine. By the time Google sold its stake in Baidu and set up its own Chinese-language search engine in 2006, Baidu was already expanding its site in the hopes of building a community that would stick around longer on the site. According to Forbes: Through acquisitions, Baidu has bolstered its wireless business, and it is working full speed on the next generation of search through voice and image recognition.
Baidu.com is China's most-used Internet search engine. Modeled after Google, it makes money by selling advertising next to search results and using a ranking system for its search in which companies pay for high listings and give Baidu.com a commission based on the number of hits they receive. Launched in 2002, Baidu.com is one of the world’s mostly widely used websites because of its dominance in China.
Dark Side of Internet Business in China
He Fei wrote in the Southern Metropolis Daily: “It is not easy to become an Internet promoter. A good promoter must have broad knowledge as well as understand netizen psychology; he must have good planning skills as well as write well; he must have good media resources. Unless you have powerful Internet appeal, your posts will be drowned out and never be picked up.” [Source: Southern Metropolis Daily, EastSouthWestNorth, April 18, 2010]
As of 2010, there were about 1,000 Internet promotion companies in mainland China, employing at least 100,000 persons.” At that time Internet promotion was a nascent business with many problems.” A private company owner who had asked an Internet promoter to market his services said frankly: There are no standards for the price and quality of Internet promotion, so that one can spend big money and fail to achieve the desired results. Certain unethical Internet promoters not only hyped brands, sold products and handled public relations crises, they will also ran massive campaigns to malign and libel their clients' competitors and even control public opinion to affect court decisions. This phenomenon was called “Internet triad society. Since Internet libel is hard to prove and posters are hard to track down, companies find it hard to seek legal redress. Some companies are called or legal reform to make the posters liable.
“When these Internet promoters work for a company, they will analyze group psychology and customize their messages to factors such as “angry young people,” “hatred of wealthy people,” “sympathy for the weak and vulnerable,” etc. When they write posts, they make sure that they make some spelling and/or grammatical errors somewhere to prove authenticity. They will also hire a “navy fleet” consisting of university students and unemployed idlers -- usually, each team consists of 100 persons and each company worker manages 10 teams; if five company workers work on a project, that means the “navy fleet” may consists of fifty teams totaling 5,000 persons. Some companies usually have the addresses of tens of thousands of forums. So a single post is liable to show up at several thousand forums.”
Cutthroat Tactics Used in Internet Business in China
John Boudreau wrote in the San Jose Mercury News, “In China's young Internet industry, competitors draw blood. Competitors steal each others' employees, if not their intellectual property. They rat out competitors for violations of regulations to the Communist government, disable each other's websites and engage in other hardball tactics rarely seen in the valley. Established Internet companies copy business plans of startups — then set out to destroy the small companies. [Source: John Boudreau San Jose Mercury News, November 4, 2010]
"The cost of labor is cheap and there is no shame in copying," said Hans Tung, a partner at Shanghai-based Qiming Venture Partners, which backs a number of Internet companies, including Kaixin001. "The valley culture doesn't work in East Asia," said Jeremy Goldkorn, an Internet analyst who for years has operated a popular blog, Danwei.org, which the government began blocking during the summer. "There are no rules." There is, though, one rule everyone seems to agree on: Secrets don't remain secret. Simply hiring employees can be perilous because "they could be spies for other companies," said Shen, CEO of PapayaMobile, an Android-based gaming platform. "They will steal your code and your interface. They don't even change the icons. This is how things go in China."
Zhou Hongyi, founder of anti-virus software company Qihoo 360, said: "The Internet in China is like a jungle." Zhou, who used to head up Yahoo's China operations before a falling out with the company, is known as much for his brilliance as his warlike tactics. In 2010, Qihoo 360 was locked in a battle with a former partner, another anti-virus company called Kingsoft. After their alliance ended earlier this year, the companies began targeting each other's software as malware. Each has filed a lawsuit against the other. "This kind of warfare is interminable," said Kaiser Kuo, spokesman for Baidu. It is not uncommon, he added, for companies to pay local reporters to write something bad about competitors.
The cutthroat nature of the industry has historic roots, said Kai-Fu Lee, the former head of Google, "People here want money more than people in the United States," he said. "Many families have been poor 100, 200 years and this is their big chance. It's that strong desire for materialism." It's survival of the hungriest — and fastest.
Spurring the frenetic fighting is the fact that it's not easy to sell services to several hundred million Internet users in a culture that expects most things to be free online, Kaixin001's Chu said. "We are like groups of armies fighting," Lashou.com's Wu said of the 50 or so deal-of-the-day sites in Beijing alone. Not long ago, he learned at midnight that a competing site launched a campaign that promised a secret prize to users. Wu, "shaking" with competitive drive, called a 3 a.m. meeting at company headquarters to devise a counterstrategy to be deployed immediately — a drawing for a free iPhone for those using Lashou, which effectively blunted the competitor's move. "If you want to do something, you have to do it fast," Wu said. "In Silicon Valley, people shut their cell phones off after 10 p.m. But that slows you down."
Underhanded Internet Marketing Tactics in China
Duan Yan wrote in the China Daily, “Posting negative comments on the Web about products and services is fast becoming the most popular channel for Chinese consumers to vent their spleen. Yet, behind this veneer of free expression lies a murky world of cyber bullies and unscrupulous webmasters who are manipulating the media to either promote or smear a company's image for profit. “[Source: Duan Yan, China Daily, June 17, 2010]
Among the services of Internet public relations agencies are removing any negative feedback they find. “Real estate, cars, electronics: These are usually the most lucrative when it comes to deleting negative posts,” Ma Mingdong, a 25-year-old Beijing blogger and online marketer, told the China Daily. “Many people think it's complicated to delete posts but it isn't.” He said it costs just a few hundred yuan to bribe staff at a website or forum to delete posts, and if that fails, “paid posters” — netizens hired to leave fake comments and delete genuine ones - can use software to copy the official documents and identification that websites need before they agree to remove a comment.” Several chat groups on QQ, the instant messaging service, have even become mini-trading centers where PR firms regularly advertise for paid posters, otherwise known as shuijun, the “water army”. However, industry experts argue that the use of shuijun undermines consumer trust in the Web, as well as underlines the need for stricter policies to protect the rights of netizens and ensure fair competition.”
More worrying, perhaps, is the growing use of fake negative comments by websites to pressure businesses into advertising with them. Wang Yu (not his real name) worked as a Web editor for a property website in Jiangsu province after graduating from college in 2007. He said his job involved copying various articles about real estate agents from other sites and then leaving fake complaints about them under any number of pre-registered user names.
“Deleting news articles is difficult, but deleting posts from online forums is very common... only the price changes,” said Li Haigang, founder of Caogen PR, an Internet marketing company. As of 2010, there wass no law stopping this practice and was deemed legitimate if both sides reach an agreement. On top of that a recent online survey by sina.com, a Chinese news website, found that one-third of the 783 netizens polled see the media as the most efficient way to solve a dispute.
The Charming Social Network Service Self Business Starting Platform had 7,380 agents described as “data manipulators” on its list in 2014. The Times of London estimated in the mid 2010s there were as many as 1,000 such companies in China. Their primary chore was to trick Taobao algorithms into generating sales figures for new companies as the Taobao lists customer traffic and its hard for new company to get going unless they have listed customers. The manipulators did things like conduct sales negotiations with online shops and tricked software into logging the contact as a sales. They knew exactly how many minutes and second to stay on a webpage to get a “hot” ranking. To meet they requirements of these transactions they were reportedly a huge number of empty boxes being delivered across China. Taobao fought backs back with advanced software that detect “order swipers” and “fake orders.” [Source: Leo Lewis, May 2014]
China’s Trademark Squatters
In 2012, Associated Press reported: iPotato, isock, icouch, istove, i-you-name-it. An Internet search for "i'' words from A to Z will turn up just about any combination you might think up, from all over the world, only a handful of them related to Apple Inc. “Given its penchant for "iproducts," Apple's current troubles in China over the iPad trademark are not its first, and are unlikely to be its last. China's importance as a major consumer market is bringing fresh headaches for companies, and even celebrities, seeking to protect and claim brand names. That's apart from the usual problems with piracy and other infringements. [Source: Associated Press, March 7, 2012]
“Financially troubled Proview Electronics Co., a computer monitor and LED light maker, says it registered the iPad trademark in China and elsewhere more than a decade ago and wants Apple to stop selling or making the popular tablet computers under that name. Apple says Proview sold it worldwide rights to the iPad trademark in 2009, though in China the registration was never transferred.
“The number and variety of such disputes is rising as Chinese companies seek to leverage trademarks to their advantage, either for the sake of acquiring attractive brand names or for financial gain, said You Yunting, a lawyer with the Debund Law Office in Shanghai, which specializes in trademarks and patents. "This is an era of development and people are paying more attention to brand names now," said You. "China is not good at innovation. I'd say Proview would not be suing Apple if its financial situation was fine."
“Apple and Proview are battling in Chinese and U.S. courts. Apple's right to make and market the iPad under that name in China may hinge on a pending ruling from the High Court in Guangdong, in southern China. “Whatever the outcome, the dispute highlights the rising stakes of the trademark name game in the increasingly lucrative China consumer market, one that most global companies cannot afford to miss out on regardless of the risks.
“"China's been infringing on patents and copyrights and so on from the beginning. Now, it's a globally important market and this is where a lot of companies are depending on for growth," said James McGregor, a senior counselor for consulting firm APCO Worldwide and a former chairman of the American Chamber of Commerce in China.
“The issue touches practically every type of product or industry. Former NBA star Michael Jordan is suing a Chinese sportswear maker, Qiaodan Sports Company Ltd., for unauthorized use of his name and images associated with his own brand, such as his old jersey number, "23". "Qiaodan," pronounced "CHEEOW-dan," is the moniker Jordan has been known by in China since he gained widespread popularity in the mid-1980s. "I am taking this action to preserve the ownership of my name and my brand," Jordan said in a video clip on his website. "No one should lose control of their own name."
Beijing Goes After Big Tech Companies?
In March 2021, the Chinese government appeared to take a more aggressive stance regulating China’s tech giants — Alibaba, Tencent and Baidu — when it launched an anti-monopoly investigation into Alibaba. According to the BBC: One watchdog said it had fined 12 companies — including Tencent and Baidu — over 10 deals that it said violated anti-monopoly rules. This may signal an escalation of matters across the wider tech sector. The move to rein in the tech superpowers is seen by some as an effort to prioritise stability and control over commercial success. [Source: Sam Peach — BBC Radio Documentaries Unit, March 20, 2021]
Tencent is responsible for the "super-app" WeChat among many other tech products "There are [Communist] party committees there to remind the companies... that the party ultimately has power, even over powerful individuals like Jack Ma," says Samantha Hoffman, a researcher at the Australian Strategic Policy Institute. “This control extends to secrecy, she says. “Not only is a company responsible to do what the party demands, but they also can't admit to doing that if they're asked."
“But another expert suggests Alibaba and China's other tech giants should not be viewed in the West solely through a political lens. “China is still a developing country… I think it might be unfair to judge a developing country against the same benchmarks and merits as you would a developed country," says Lillian Li, author of the popular Chinese tech newsletter Chinese Characteristics.
Working at Chinese Internet Companies
“Entry-level employees at Alibaba, Tencent and other major tech companies earn between $30,000 and $60,000, according to posts by recruiters or on job-seeking websites. The average salary for a fresh college graduate in China in 2019 was about $10,000, according to government statistics. [Source: Vivian Wang, New York Times, February 1, 2021]
Meitu’s apps that make a person look more beautiful are made by a company called Meitu. Jiayang Fan wrote in The New Yorker: Over the entrance to Meitu’s headquarters, the company’s name is written in slanted pink letters. The path toward it is flanked by human-size figures, resembling Teletubbies, coated in bright, glossy paint. An employee explained that they represented aspects of the company’s operations, such as marketing, product management, and programming. The building’s interior evoked a giant Hello Kitty store. The walls were painted Jordan-almond shades — the color scheme changes every few months — and there were stuffed animals and bobblehead dolls on the desks. Conference rooms were named for aspirational spring-break locations: Hawaii, Bora-Bora, Fiji. (The average age of the employees is twenty-seven.) Stylishly clad men and women pecked at computers that were covered in garish stickers, like high-school lockers.” [Source: Jiayang Fan, The New Yorker, December 18, 2017]
Vivian Wang wrote in the New York Times: “China’s hypercompetitive work culture, especially in the tech world, has been a frequent source of concern and criticism in recent years. While many once celebrated the growth-at-all-costs attitude as an engine for China’s development, young employees have increasingly complained of the cost to their health and personal relationships. [Wang, Op Cit.]
“Suji Yan, the founder of a cryptography company in Shanghai, said the pandemic had helped tech users realize their own reliance on a few big companies and the business practices behind them. That is building into broader pushback against tech companies — not only on behalf of highly paid, highly educated programmers but also to support lower-wage workers, too. In 2019, lots of people were arguing: ‘Hey, you guys are really the elite class. You should not ask for more,’” said the 24-year-old entrepreneur, who was closely involved with the anti-996 protests in 2019. Now, people feel that “developers’ fate is connected with the destiny of those delivery guys.”
Lyu Xiaolin, an employee at a major Chinese tech company, said that for every employee who tired of the working conditions, dozens more were willing to take that employee’s place. “The public on the one hand shouts that” overwork “is horrible, and at the same time is rushing to get into these big tech companies,” she said. “It’s like a siege: People on the outside are trying to come in, and people inside are trying to get out.”
Chinese Internet Company Jargon
Many young Chinese tech workers complain of overwhelming tide of meaningless corporate jargon, known in Chinese as heihua. According to China Narrative: “Like their counterparts in Silicon Valley, the ideological posturing of Chinese internet firms serves several purposes. It buttresses their claims of working for the greater social good and dilutes their reputation for ruthless profit-seeking. It helps them to attract employees seeking meaningful work, not just a salary. And it strengthens ties within the organizations by popularizing language that outsiders can’t understand. But the strategy has a darker side as well. It can be used to justify long hours and inefficient work practices. [Source: “The Dilemma of Corporate Jargon” by Yi Fangxing, from the Chinese nonfiction platform Renwu, translator: Matthew Walsh, editor: Isabel Wang China Narrative 52, July 5, 2021]
Yi Fangxing wrote: “It was 2 a.m., and Liu Feifei was still working overtime. She was very sleepy, but kept her eyes on her cellphone, resisting the urge to complain about the client on the other end. The phone kept lighting up with notifications through DingTalk, the Alibaba-owned business communications app that Liu’s company used. Hoping to cut through the noise, she brought up a four-person conversation with a client to whom she had just handed a planning proposal. In clear, simple Chinese, she wrote: “What, when and what time are we going to post on [a Chinese social media platform], and are we going to use [a particular] Weibo account?
“The client, who represented a Chinese internet firm, interrupted her: “I don’t think you’ve thought clearly about the plan. How about you work it out, and then we can talk about it.”
“The nerve of these guys! Surely the client doesn’t want her to rewrite it?
“Liu was taken aback, but soon recognized the problem. In her sleepy state, she’d foolishly spoken in layman’s terms.
“In China’s internet industry, that would never do. Hurriedly, she added:
“Let’s preheat the article first to pull up the expectation value. Then we’ll take advantage as it ferments, drawing in onlookers for marketing enablement. “Right,” the client replied. “See, that’s much clearer.”
“Liu’s not the only worker in China swimming in a growing tide of corporate jargon. Soon after Chen Qiang joined his current company, an advertising firm, a client from the country’s thriving internet industry ordered him to create a “full-scene experience.” When Chen asked what that meant, the client said he wanted him to Photoshop the company logo onto a selection of different images.
“A little confused, Chen mocked up a version and sent it over. The client said:
“It doesn’t augment reality enough. “What do you mean, ‘it doesn’t augment reality enough?’” asked Chen. “You need to make the 2D cartoon look 3D,” the client said.
“After finishing the project, Chen concluded that internet companies bu shuo renhua — they don’t speak human language.
“To help her understand the corporate jargon of Chinese internet firms, Liu wrote the most commonly used words into a document and began studying it like language learners study vocabulary lists.
1) “enablement.” Empowering something or someone with energy or ability. “AI enablement,” “brand enablement” — basically, anything on the internet can be enabled.
2) “chainpath.” A combination of , “chain,” and , “pathway.” It just means “chain,” but that sounds too lowbrow, so you have to say “chainpath.”
3) “alignment.” Refers to making sure both parties are using the same information. A synonym is , “streamlining.” Commonly used in the phrase , “Let’s get aligned.”
4) “granularity.” As in, “the granularity of this plan isn’t fine enough.” Just means “This plan needs more detail.”
Some of these terms, like “enablement” and “chainpath,” are made up. Others imbue established words with new meanings — that’s the case with “alignment” and “granularity.” Chinese internet firms also use lots of terms imported from English, like “OKR” — short for “objectives and key results” — and “KPI,” short for “key performance indicators.” Most puzzlingly for Liu was the fact that a lot of China’s internet industry jargon had only just appeared and lacked clear meaning, making it both popular and hard for outsiders to understand. For instance, the differences between “pain points,” “itchy points” and “feel-good points” left her scratching her head for a long time.
“During one meeting, her team leader said: “With this project, we mustn’t just look at the pain points, but also be clear on the user’s itchy points and then seek breakthroughs on the feel-good points. The other team members gazed at their boss with rapt expressions. Afterward, Liu quietly asked a male colleague what it meant. He said: “Itchy points make users feel a little bit good, pain points keep them feeling good, and feel-good points make them feel totally awesome. “Liu couldn’t help thinking she was in for a rough ride.
Worker Deaths Put Spotlight on Chinese Internet Company Work Culture
The deaths of two young employees of Pinduoduo, one of China’s biggest online shopping platforms, in 2021 drew attention to longstanding concerns about working conditions at large internet and tech companies in China.Vivian Wang wrote in the New York Times: “It was 1:30 a.m. just days before the new year, and a 22-year-old employee of Pinduoduo, a Chinese e-commerce company, was leaving after a long day of work. Suddenly, she clutched her stomach and collapsed. Her co-workers rushed her to a hospital, but six hours later, she died. Less than two weeks later, a young Pinduoduo worker leaped to his death during a brief visit to his parents. The next day, a third employee said he had been fired after criticizing Pinduoduo’s work culture. The day after that, a delivery driver for another technology company set himself on fire, demanding unpaid wages. “I want my blood and sweat money,” he said in a video shared widely on Chinese social media in recent weeks. [Source: Vivian Wang, New York Times, February 1, 2021]
“The string of deaths and protests has reopened a national debate around the power of China’s biggest technology companies and the expectations they impose on their employees, at a time when internet giants around the world are under fierce scrutiny. Users have called for boycotts of Pinduoduo. The authorities in Shanghai, where the company is based, announced an investigation into its working conditions. The company is no longer co-sponsoring the state broadcaster’s Lunar New Year gala, China’s most-watched television program. Pinduoduo said in statements that it would offer employees psychological counseling. It also released a screenshot of a message that it said was from the father of the female employee who died, thanking the company for its support.
“On January 3, 2021 an anonymous user on Maimai, a professional networking platform, wrote that a friend at Pinduoduo had died unexpectedly and blamed the company. The post gained traction, and Pinduoduo confirmed that an employee surnamed Zhang had died on Dec. 29 on her way home. There was no public explanation of the cause of death, but many online linked it to overwork. Users noted that Ms. Zhang had been working on a new online grocery product that Pinduoduo had promoted heavily, and that the company’s chief executive, Colin Huang, had just been named China’s second-richest person. “Outrage mushroomed further when Pinduoduo appeared to dismiss Ms. Zhang’s death. “Who hasn’t exchanged their life for money?” said a post from an official Pinduoduo social media account on January 4. The post was quickly deleted. The company claimed screenshots were fake, then backtracked and blamed a contractor.
“Then on Jan. 9, Pinduoduo announced that a second worker, identified by the surname Tan, had jumped from a building while visiting his parents, though no reason was publicly given. The next day, a former engineer at Pinduoduo who uses the screen name Wang Taixu posted a video on Weibo, claiming that he had been fired after sharing a photo of an ambulance outside his office. His caption suggested that yet another colleague had fallen. “Maybe I’m still studentlike and haven’t learned to be a professional who hides my thoughts and protects myself,” he said in the video, which has been viewed more than 64 million times. “But I think the world should not be like this.” Pinduoduo confirmed in a statement that a former employee surnamed Wang had posted the video. It said he had been dismissed not for the ambulance photo but for other “extreme statements” he had made online criticizing the company.
“Lyu Xiaolin, the tech company employee, said she had discussed the Pinduoduo deaths extensively with colleagues, who agreed that the idea of unbearable work pressure felt all too familiar. “The conclusion was this is too terrible, and we have to cherish our own lives,” she said. “We should make sure to leave work earlier in the future.” She herself had switched roles in her company, which she did not want identified for fear of retaliation, because her previous job often required her to work until 11 or 12 at night, sometimes even 3 a.m. She had sought therapy to ease the mental burden.
“After Liu Jin, the delivery driver, set himself on fire, Weibo users accused Ele.me, the food delivery company that he said had withheld his wages, and Alibaba, its parent company, of exploitation. They pointed to another Ele.me driver who had died while making deliveries in Beijing in December. Mr. Liu survived, and Ele.me later said it was “saddened” by the event and would pay his medical expenses.
Resentment Over Stressful Work Conditions at Chinese Internet Companies
“Both the government and ordinary citizens have begun turning on the companies they once held up as symbols of China’s growing superpower status. The deaths of two young employees of Pinduoduo highlighted the issue.. Jack Ma, the Alibaba. e-commerce group’s billionaire and co-founder has become a favorite villain online for promoting “996" culture — working 12 hours per day, from 9:00am to 9:00pm, for six days a week.
Vivian Wang wrote in the New York Times: ““The furor also speaks to broader concerns that decades of seemingly unlimited economic promise are ending. Many blue-collar workers are struggling. Young white-collar workers have grown increasingly vocal about long workdays, bleak job prospects and dissatisfaction with the rat race. [Source: Vivian Wang, New York Times, February 1, 2021]
“That discontent exploded prominently in 2019 when rank-and-file tech workers organized a rare online protest against “996” culture and pushed awareness of China’s labor law, which generally prohibits workdays exceeding eight hours without overtime pay. But companies insist the long hours are voluntary, and the authorities, wary of any unofficial mobilization, censored many discussions of the movement. The internet moved on... “Overwork again came under scrutiny in recent days when a court in Shandong Province revealed that a Shanghai property management firm had fired an employee for taking unauthorized leave to attend his father’s funeral.
“Conversations about “996” — or even more drastic variants — dominated social media” after the Pinduoduo deaths. A Weibo hashtag about Ms. Zhang’s death alone has been viewed more than 630 million times. Even Xinhua, the official state news agency, interviewed Mr. Wang and denounced “distorted overtime culture.” Chen Haoxiang, a recent college graduate in Zhejiang Province who works in the tech industry, said he had uninstalled Pinduoduo’s app and written blog posts promoting labor rights. He said he admired Mr. Wang because, though many privately criticized their employers’ expectations, few dared go public. (Mr. Chen said he had left a job that required 996 and now worked at a company with shorter hours.) “When unreasonable things happen, and in fact happen to those around you or you yourself, how many people are willing to stand up?” he asked. “We need laws to help people draw a bottom line.” He added that the topic of working conditions was not limited to one industry or company. “This is a topic for our entire society.”
“The pressures of the postepidemic job market had also helped generate sympathy for lower-wage workers, as even college graduates have been forced to take on gig work, said Zoe Zhao, who researches activism in China’s tech sector at the University of Pennsylvania. But that pressure could also make it even more difficult for workers to enact real change, given fears of unemployment.
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.
Last updated May 2022