When Jack Ma sang a classic Beyond song at the Yunqi Conference, the fans' enthusiastic chants of "Daddy, I love you" were astonishing. Twenty years of China's internet have fostered a deep-seated sense of identity and fanaticism.

The resulting self-perception is like Leo's self-congratulation in "The Wolf of Wall Street": Act like a ready-made, rich, and handsome guy, and you'll become one; act like you have unmatched confidence, and people will naturally have faith in you; act like you have unparalleled experience, and people will listen to your advice; act like someone who has already achieved great success, and you'll eventually become as successful as me.

Why does the Chinese internet always outperform American teachers?

Yahoo, which Mei couldn't save, has declined, but the companies it invested in in China have succeeded; eBay killed Eachnet China, Amazon and LeEco are rumored to be dating, while Alibaba and JD.com have both succeeded; Ctrip acquired Expedia's Chinese outpost, eLong; Uber, after burning through $1 billion, handed its China operations to Didi; then there's Baidu, which forced Google to Hong Kong; Weibo and WeChat, which are standing up to Facebook and Twitter; Youku and iQiyi, which are shutting out YouTube; and 360 Free Antivirus, which is causing trouble for Symantec and McAfee...

In short, regardless of the reasons or the means used, Chinese internet companies have already suffered numerous defeats at the hands of American companies. This is a fact!

But the reasons for victory aren't necessarily cause for excitement!

You could argue that the Chinese market is large and unique enough to leverage the internet industry's value transfer advantages, but the real factor is simply that Chinese companies are bolder and more willing to defy economic laws.

Starting with Alipay, Chinese companies have flocked to the payment market, with many obtaining payment and even credit reporting licenses. Do Chinese netizens need so many payment tools?

Initially, payment was merely a barrier to entry for e-commerce platforms. Take Alipay, for example. Its transaction costs with banks were fixed, but to rapidly stimulate demand, fees were adjusted based on competition. As Taobao and Tmall established themselves, fees on the business side stabilized at 6‰. Fees on the consumer side gradually tightened, until recently, when free withdrawals were ended.

Today, Ant Financial, relying on user inertia, has the ability to pass on costs, while the accumulated funds tied to its account system remain, paving the way for subsequent derivative financial scenarios, even potentially using banks as a scapegoat.

In contrast, American companies involved in payment services are merely tools, rarely impacting the interests of partners and competitors.

For example, Apple Pay doesn't have an account system, doesn't deposit funds, and doesn't clear funds. It focuses solely on convenient integration, avoids burning money, and avoids showcasing sentiment. This composure is considered foolish by Chinese internet payment companies.

PayPal, spun off from eBay, primarily survives on high fees, with no interest in accumulating capital or challenging banks. Lakala's American predecessor, Square, merely provides procedural and functional conveniences. For example, while banks settle monthly, Lakala settles daily, lacking ambitions like community O2O.

Chinese companies are obsessed with transaction volume, imaginative potential, or over-the-top (OTT)-style over-the-top traffic diversion, while American companies generally focus on non-disruptive functional innovations with lower social costs.

As for Didi, many are shocked by its generous subsidies. Firstly, they believe Uber lacks such audacity in the United States, and secondly, they question whether this is a sustainable business model.

Didi's competition with Lyft in the United States was at its peak, with Uber periodically adjusting prices. For example, at the beginning of the year, it cut prices by 10%-45% in 100 North American cities to curb Lyft's new round of financing. However, Uber rarely provides cash subsidies to drivers, merely reducing its commission. However, some small cities, such as Altamonte Springs, Florida, are willing to provide $500,000 in subsidies out of concern that the departure of Uber's capacity will harm the local economy.

In the even more volatile Chinese market, after Uber, adapting to local customs and burning through $1 billion, TK ultimately returned this hyper-competitive market to Didi and took a controlling stake in the company.

In fact, anyone with a discerning eye can see that Uber, with its global market presence and overseas profits, has more capital to burn than Didi. Subsidies themselves offer little technical sophistication, and losing money to buy traffic doesn't even qualify as performance. It's at most a business decision.

After acquiring Uber China, Didi never incorporated those "born proud" young people into its own organization, clearly aware of this.

For a long time, Chinese internet companies have cultivated only two types of founders: Liu Bang and Xiang Yu.

When Qin Shihuang went on tour, his entourage was magnificent.

Liu Bang's reaction was: "A true man should be like this!"

Xiang Yu, on the other hand, was disdainful and dismissive: "He can replace me!"

The former's eagerness to prey, the latter's disdain for authority, can be said to be the spiritual forefathers of entrepreneurs.

So, the more passion Chinese internet companies expend, the more they will recoup in profits. They're simply pursuing economies of scale after declining marginal costs, the arrogance of dominance after achieving global dominance. It's only a matter of time before they become even more greedy than the very competitors they vow to disrupt.

Why are Chinese companies so obsessed with smartphones?

Q: Because they have a delayed, high-volume profit model based on Moore's Law?

A: Of course not. The fact that Apple and Samsung's profits surpass the entire industry has long disproven this.

Q: Because low-priced or free hardware can be offset by value-added services?

A: So far, no domestic mobile phone manufacturer has fully achieved this.

Q: Because they have the opportunity to emulate Steve Jobs and perform a nostalgic stand-up comedy at a press conference?

A: Some people have actually done this. There was a performance in Shanghai the other day.

The real reason is simply that smartphones are mobile portals that allow companies to control competitors and users, making it easy to smuggle private information and take advantage of their own demands. Therefore, once mobile phones are put on the market, they immediately develop directory services, content, payment systems, and social networking features, integrating users' daily needs, including food, clothing, housing, transportation, emotions, and moods. These redundant innovations, for which there are already alternatives, are certainly not entirely for convenience.

Most people simply haven't experienced the power of becoming a "daughter-in-law."

Frankly, isn't the Chinese internet full of selfish portals?

Downloading an app and getting a whole bundle of features is already the new normal. Antivirus software often "accidentally" kills other apps. Taobao and Tmall require passwords for WeChat forwarding. Alibaba abandoned the convenient WeChat and insisted on developing Laiwang (although it ultimately became a bug).

How much closed-off functionality is disguised as openness, and how much selfishness is hidden behind sentimentality!

Why is O2O flourishing in China?

Nowadays, the pain points of the lazy economy are often discovered and, through internet-based transformation, transformed into impressive business models. For example, countless home services have emerged. Many entrepreneurs have discovered these seemingly un-internet-like consumption scenarios.

They are incompatible with the internet for the following reasons:

1. They are labor-intensive, rather than the knowledge-intensive nature of the internet;

2. They ignore cost-effectiveness and are crude, focusing solely on scale and subsidies;

3. The business model is demanding, yet they still want to show off their technological sophistication and technical content;

4. The traditional service industry's motto of morning exercises, pre-meal self-motivation, and evening reflection is prevalent.

However, O2O solves a core problem of China's business model: rapid scale. This is particularly beneficial for startups valued by GMV, which is why they continue to thrive.

Does China really need so many home services? Beyond certain essential consumption scenarios, how many of these are simply fake demands fueled by subsidies? Platforms, users, and investors are well aware of this.

If you peel back the glamorous facade, everyone will feel familiar. Takeout is nothing more than a larger version of Lihua Fast Food, built on the internet, and Didi is just an oversized taxi company.

Furthermore, the reputation these companies have built through small favors is actually quite fragile. In the elementary school textbook "Cao Gui's Debate," Duke Zhuang of Lu boasts about his favors to the people, but Cao Gui bluntly states, "If small favors are not extended to all, the people will not follow." Machiavelli also teaches us, "People are naturally jealous of small grievances and apprehensive of great enmity."

This is evident in the brand alienation Didi experienced in the short span of four months, from the release of the Ministry of Transport's new policies in June to their implementation across the country in October.

In the long run, business models that have grown inflated by low prices or free services are slowly exhausting their vitality, and their impatience to monetize is inevitable.

In fact, the four free models Chris Anderson once envisioned are all collapsing:

1. Direct cross-subsidy, where one free service drives another paid service. This model of free games and paid items is also rapidly becoming unsustainable.

2. Three-way market, where advertisers pay and consumers are free. This is exemplified by the now-declining internet advertising model.

3. Free-with-paid, where some users are free while others pay. This is more common among content platforms, but they are also transitioning to limited freemium, using a trial free model to attract paying members.

4. Pure freemium, where enthusiastic individuals operate on a semi-charitable basis. The fate of Shooter.com and the Subtitles Group speaks volumes. As Shooter.com's announcement stated, "The era of needing us is over," and the Subtitles Group is still facing legal action.

China's 20-year internet boom has peaked. With the end of the era of users taking advantage of free products and the increasing concentration of platforms, internet sentiment will inevitably enter the era of monetization.

Many people are happy to see China's internet surpass the US. More accurately, China has more consumer-driven internet application scenarios than the US, leading to a rapid increase in the proportion of China's internet economy.

The US doesn't have as many thriving O2O (online-to-offline) businesses because labor costs are too high. Uber doesn't offer the same cash subsidies as in the US, and offline QR code payment isn't as widespread in the US because credit card culture is so advanced that Chinese people can't even imagine it.

Amazon is thankful if its delivery arrives within a week, while Chinese e-commerce companies strive for next-day and same-day delivery, with JD.com even offering speedy delivery within three hours. Compared to the "clumsy" Americans, Chinese users and internet companies are incredibly fast.

The cutting-edge technologies that Google focuses on, aside from being brought out in awe or used to tease Baidu, are rarely put to use unless they benefit capital operations. Chinese internet companies are more interested in new gadgets that interact with people and can instantly tap into consumer scenarios.

Thus, the direct consequence is the ever-increasing proportion of China's internet economy.

According to the McKinsey Global Institute, China's internet economy accounted for only 3.3% of GDP in 2010, reaching 4.4% in 2013, approaching the US's 6%.

However, according to the "G20 Internet Development Research Report," jointly published by Tsinghua University, the Shanghai Academy of Social Sciences, the National University of Singapore, and other institutions, China's internet economy accounted for 6.9% of GDP in 2015, surpassing the G20 average of 5.5%.

The domestic prosperity of Chinese internet companies also obscures a deeper truth.

It's encouraging that Alibaba has achieved a 26.6% share of global e-commerce transaction volume, but beyond top companies like Amazon, the remaining 45.2% is largely held by American companies, 90% of which operate in a B2B model, rather than the C2C model inherited from eBay by Taobao. While Alibaba stands out as an individual, the US holds a clear advantage across countries. Alternatively, the US e-commerce landscape is more dynamic and healthy than China's.

Furthermore, the market capitalization gap between Chinese and US companies is widening, not narrowing, from 2 times in 2014 to 3.4 times in 2016.

Looking solely at internet penetration, China's current 52.2% penetration rate still ranks in the lower middle tier among G20 countries. However, the potential for growth lies primarily in fourth- and fifth-tier cities and rural areas, while the dividends of first- and second-tier cities have largely been exhausted.

Some, therefore, make excuses, arguing that the internet will not create monopolies and that there are still many opportunities, just as when Sina and Sohu were so powerful, no one imagined the emergence of BAT. But the reality is that disruptive innovation has become extremely rare in recent years. Most of us have seen only meteoric rises at the application level, such as Face Meng and Zuji. The occasional highly valued giant, like Didi, is actually under the protection of BAT.

There's really no force that can prevent the reaping of dividends after the nostalgia fades.

China's internet wealth outlook lies on two paths:

One can either follow the same old tactics as WeChat, Alipay, and Didi, and resolutely profit from the effort when economies of scale no longer require slogans like free or subsidized services. Alternatively, one can follow the path of live streaming and Fenda, encouraging and even inciting participants to desperately monetize their viral traffic. Everyone, fearing the end of the "free lunch" moment, lives up to the famous adage of King Louis XV of France: "After my death, I care not what the floods do."

In short, when the pigs are no longer producing wool, everything remains the same: it's all just a routine.