Chinese tech executives mull the independence of start-ups in wake of Mobike acquisition

China’s internet companies are rapidly expanding beyond their traditional confines, triggering debate over whether the country’s tech industry will go in the direction of Japanese keiretsu or Korean chaebol

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Following the acquisition of bike sharing platform Mobike by internet conglomerate Meituan Dianping, boardrooms across China are debating whether tech start-ups can remain independent. Photo: Simon Song

Sarah Daiin BeijingandZen Sooin Hong Kong

Published: 5:36pm, 5 Apr 2018Updated: 9:09am, 6 Apr 2018

Can Chinese tech start-ups stay independent in an industry dominated by a handful of giants? That is the question being asked in boardrooms across the country following the acquisition of bike sharing platform Mobike by internet conglomerate Meituan Dianping this week.

Baidu, Alibaba and Tencent – collectively known as BAT – have grown so large, with combined revenues of 550 billion yuan (US$87.3 billion), that they dominate nearly every aspect of the Chinese internet, from web search and social media to e-commerce and entertainment.

Among all of China’s 124 unicorns – private companies with a valuation of US$1 billion or above – 50.8 per cent are controlled or backed by BAT, according to a February report by information service provider ITJUZI.

“It’s impossible to be independent. Alibaba or Tencent would either copycat your technology or business model or they’ll invest in your competitor,” said Shaun Rein, managing director of China Market Research Group.

“They basically have a gun to your head and you have to choose which of the two companies you want to work with.”