Internet is like no other business

Online world is in nearly all respects as competitive as any market can be, requiring deep dedication to customer preferences

Yahoo is an independent company no more. It serves as a mirror for all other first-generation internet companies. And there are quite a few in China.

If, as some people say, the Chinese internet's recent performance serves as an example for the world, it also contains a lesson as to how companies of the pre-Google era may or may not survive.

Not many Chinese internet services from around 2000 exist. Of the few that are still operating, fewer are industry leaders or able to expand their business reputation. But those that still lead have really paid a heavy price in their almost tireless learning and relearning processes.

Many attempts have failed, naturally. Ill-advised takeovers and mergers are not a Yahoo patent. But some companies managing to survive is not because they were operating in a government-protected space. Except for news content, the Chinese internet world is actually as competitive as any market can be.

China is not an antithesis to the universal law that the most successful companies grow from the most challenging market competition.

It's protected sites that most frequently shortchange their users and attract consumer complaints.

What has provided a lifeline to Alibaba is the user-generated rating system for the thousands of online small merchants that Alibaba would otherwise have no way to police.

What has sustained Tencent's reputation is the mobile WeChat platform, on which many small businesses flourish, instead of its original email and desktop message services.

What has helped the so-far profitless JD.com compete is the heavy investment in its logistics system, with which it can guarantee more rapid delivery than other companies.

Old, Yahoo-like portals, such as Sina and Netease, have tried to branch out into other mass services, successful or not, from the elitish blog (a form of online publishing) and Twitter-like Weibo services, to video or gaming channels. In the meantime, companies have kept reshuffling their marketing concepts.

None of the changes has been a government initiative, even less an outcome of a policy or some guidance from high above.

At best, the local government may have provided the tech startups with small incentives, such as preferential terms for business registration and office rental subsidies.

Technology doesn't become an industry by itself. Internet company founders and leaders, many of them returned from long-term graduate studies abroad, have to learn about local society before they apply their newly acquired skills and knowledge to their home country.

Having a vision about the future is important. But more importantly, the key is to chase not just technological sophistication but to prioritize the mass experience of convenience and satisfaction, mostly involving the people who are working hard to cross the threshold of a new middle class.

They may include migrant workers, college students and newly graduated young professionals, and most importantly, women consumers.

True successes in the Chinese internet industry have all combined technologies imported from the West and the understanding, or an effort to rediscover, the entrepreneur's own society.

The underlining logic offers a lesson to China's internet industry as well as the technology industries of other developing countries: The internet is a future-oriented industry. It's pointless to expect it to be like any traditional service.

In a society of transition, internet must lead a society's transition instead of being led. That's why officials can seldom help it in specific ways, and the entrepreneurs' management acumen must include some skill at keeping a distance from government while avoiding offending it.

On the part of the Chinese government, there is also a learning process - of how to manage the industry in general, and what to expect out of it.

On the downside, the much hyped peer-to-peer, or P2P, business in the past few years has been a disaster in which many investors lost their shirts. Losses could amount to billions of yuan, and most companies have turned out not to be operating in good faith, if not entirely illegally.

On the upside, a lesson still to be learned by the government is how much the booming internet, especially mobile payment services, can help the economy.

For example, when an international bank values WeChat, a mobile platform for almost everything, at more than $80 billion, with 700 million monthly users, the amount of small payments - up to 50,000 yuan ($7,500; 6,740 euros) per day - it processes in a year can be a huge figure.

How much can so much money moving about easily contribute to the overall economy? No one can tell. That's because the official statistics haven't included the internet industry until very recently.

The author is an editor-at-large of China Daily. Contact the writer at edzhang@chinadaily.com.cn