A brief history of China’s biggest tech booms and busts

China’s tech industry has been growing for so long that the ongoing crisis involving Ofo and other bike-share startups is far from the first boom and bust for an entire sector. Here are some of the biggest flare-ups and flame-outs over the years:

2009 to 2013: Daily deals

While Groupon-esque daily deals are still a thing on China’s internet, the scene is dominated by a small handful of apps, with literally thousands – yes, thousands – of earlier rivals having died out.

The craze began in China around 2009, a year after Groupon was born, as local entrepreneurs latched onto restaurant and shopping deals as a way to tackle Alibaba’s dominance in online shopping.

Photo credit: ygai / 123RF

At the height of daily deals mania toward the end of 2011, China had 5,000 competing sites.

One such site was a total rip-off of Groupon called Groupon.cn that quickly grew to 4,000 employees – mainly hastily hired salespeople spread across the country to lure stores into listing deals on its website. By late 2011, Groupon.cn had fired all but 700 of its staffers. By late 2012, the startup was dead.

A study that year found 2,082 deals sites had shut down in the space of nine months.

By early 2013, 90 percent of China’s daily deals were bought on just 10 sites, leaving everyone else to fight over the scraps.

In many ways, China’s daily deals space is a blueprint for how Chinese entrepreneurs like to rush into a new opportunity that has low barriers, throwing relatively cheap resources (such as labor) to inflate the business as quickly as humanly possible. Then the unsustainable rush peters down to just a few surviving services.

2012 to 2016: Smartphones

In 2014, China had around 500 smartphone makers – but that dropped to 100 two years later.

Dead and gone: smartphone maker Gionee / Photo credit: Gionee

And that eventually would fall further as China’s top four homegrown smartphone brands – Huawei, Vivo, Oppo, and Xiaomi – squeezed smaller brands into an ever tinier margin over the past few years.

The slowdown happened at home as well as in important overseas markets such as India.

2014 to 2018: Peer-to-peer lending

2016 to ?: Bike-sharing