Four Critical Challenges Facing China’s Consumer Internet and the Industry Internet Solution

In a keynote at the 2021 China Internet Conference, Huang Qifan, chairman of the Tsinghua Industry Transformation Advisory Committee and part‑time professor at Tsinghua University, outlined the remarkable growth of China’s consumer internet over the past two decades, noting the emergence of global giants such as Alibaba, Tencent, Baidu, and JD.com, and the rise to one billion net users.

Despite this success, he identified at least four serious issues:

1. Zero‑sum competition. Early‑stage firms burn massive capital to achieve scale and monopoly, then charge exorbitant platform or service fees that can exceed the costs of traditional brick‑and‑mortar retailers, leading to inefficient resource allocation and the proliferation of counterfeit goods.

2. Exploiting human weaknesses. Companies design products that lure users through sensational titles or borderline content, disregarding long‑term consumer interests and sometimes violating the law; such practices will struggle to survive in a fair, trustworthy market.

3. Unbounded data collection. Many platforms demand excessive personal data and permissions, often far beyond what is needed for the service, even resorting to illicit methods like microphone access to monitor user habits, which will become untenable as regulations tighten.

4. “Kill‑the‑familiar” pricing. Using big‑data analytics, firms segment users and charge higher prices to those deemed more profitable, undermining market fairness and transparency.

These problems stem from a lack of a clear, multi‑win profit model in the consumer internet. Unlike the consumer internet, the industry internet must tailor solutions to each sector, focusing on cost reduction, efficiency gains, and optimized resource allocation across the entire supply chain—examples include fintech lowering financing costs and intelligent logistics reducing shipping expenses.

Looking ahead, as the internet industry matures and legal frameworks strengthen, the current unsustainable profit tactics—burn‑money scale, manipulative product design, reckless data harvesting, and price discrimination—will no longer be viable over the next decade.