China's Internet Technology Industry Loses Attraction

Working for a Chinese internet company is no longer attractive. It's better to be an entrepreneur related to digital technology. Life is calmer.

AP/MARK SCHIEFELBEIN

Alibaba office in Beijing, China in August 2021

Information technology companies in China have lost their appeal and growth momentum. One of the reasons for this is due to the government's tough actions at the end of 2020. As a result, tens of thousands of workers have resigned.

The crackdown at that time was triggered by the government's concerns about technology companies. It is feared that some companies could abuse their power and weaken healthy competition in the market. Reported by The South China Morning Post on Sunday (5/5/2024), the government is also trying to prevent irregular business expansion in the technology industry.

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Previously, in a January 9 2023 report, Nikkei Asia wrote of Beijing's pressure on Alibaba. The company founded by Jack Ma was given a large fine. Meanwhile, the giant food delivery service provider, Meituan, was forced to reduce the fees it charged to food sellers.

The series of harsh actions is considered to kill innovation, creativity, and entrepreneurial spirit. The combination of these factors made China a technological powerhouse in the pre-pandemic era.

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Harsh actions also destroy companies, profits, and jobs. In the past, these three factors were the attractions for the best Chinese technology sector workers.

Various strict regulations and economic obstacles caused technology company stocks to be released by investors. Their market value in the Hong Kong and United States stock markets has been cut by up to 70 percent.

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Indeed, in a report on May 2, 2024, Xinhua news agency wrote something different. According to China's official media, based on data from the Ministry of Industry and Information Technology, China's internet industry business grew steadily in early 2024.

In January-March 2024, internet and related companies in China earned 384 billion yuan. Its revenue increased by 8.4% compared to the same period in 2023. Companies providing travel application and car rental services recorded a 13.3% increase in revenue. Meanwhile, information service providers noted a 5.9% increase.

Indeed, there has been a decrease in research budget. Only 19.8 billion yuan was recorded, which is 0.6 percent lower compared to the same period in 2023.

Workers quit

Various government pressures have forced some Baidu, Alibaba Group Holding, and Tencent Holdings workers to quit and become entrepreneurs. The number of remaining employees in the three companies will be around 364,477 people in 2023. The number is down by around 25,000 people compared to 2022.

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Company budget cuts are the cause of many workers leaving Baidu and various similar companies. This assessment was expressed, among others, by Zoe Du, who once worked at ByteDance, the parent of TikTok and Douyin.

During his time at ByteDance, the Chengdu-Sichuan resident once fainted in the middle of work. This was because he worked 11 hours a day for several weeks. In 2020, he resigned and started his own business. He was not alone, as up to 70 percent of his colleagues also left.

AP PHOTO/J. SCOTT APPLEWHITE

Demonstration of TikTok supporters in Washington DC, United States in March 2024

Remuneration in companies like ByteDance is still relatively higher compared to companies in other sectors. However, due to the decline in market value of technology companies, management has made various reductions.

Employees' rights to purchase shares below market price are reduced. Employees can also be fired at any time.

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Leaving ByteDance, Du founded Ziranliu. The company assists online influencers in increasing interactions with users across various social media applications. Ziranliu also helps turn those interactions into revenue for the influencers.

With eight employees, Ziranliu achieved a turnover of 10 million yuan in 2023. Currently, Ziranliu has 150 clients. Du's experience while working at ByteDance is one of the assets for operating Ziranliu.

ByteDance offices in Beijing, China in August 2020

As an entrepreneur, Du has more freedom to manage his time. Before, he only had one day off per week. Now, he can take two days off per week. During his time off, he can go anywhere.

Wang Sijing, who used to work at Baidu, is now a digital entrepreneur. After working for five years in someone else's company, she left in 2017. She quit her job when China's internet industry was booming.

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Wang established a product management training program. Compared to programming, the role of a product manager is relatively easier. As a result, Wang's business attracted a surge of interest and he recorded a revenue of 20 million yuan in his first year of operation.

Pandemic adaptation

Indeed, like many other businesses in China, Wang's company was also impacted by the Covid-19 pandemic. All training classes were closed. In addition, there was a decrease in business activities due to restrictions on outdoor activities.

Wang changed course and provided online training on careers, entrepreneurship, and of course, product management. He utilized social media to disseminate various training materials.

Digital marketing exercise by students of Mede Education Technology's e-commerce school in Guangzhou, China, in April 2024.

There are many people like Wang on Chinese social media. They offer various consultations based on their individual experiences.

As an entrepreneur, Du has more freedom to manage his time. Before, he only had one day off per week. Now, he can take two days off per week. During his time off, he can go anywhere.

Indeed, sometimes he still works for long hours. The difference now is that he does it because he likes it. "In the past, I felt guilty for quitting my job and not receiving a salary anymore. However, upon further reflection, I realized that taking a break is also important after years of working tirelessly," he said.