Top 8 collapsed Chinese startups in 2013

Although government policies and investment environment are gradually becoming more conducive to venture capitalists and private equity players, starting an Internet-based business is not an easy task in China.

According to ITjuzi, a China-based startups data base, many new Chinese companies failed to take off in 2013 due to competitiveness, lack of innovation and prudent use of foreign capital.

The most short-lived startup

Niuwo, an Internet firm that was targeted at streamlining China's furniture market, had to close shop four months after its launch in June 2013. It carries the tag of shortest-lived startup in a year-ender Internet startup and investment report released by ITjuzi.

Niuwo had once announced that it had achieved 300 million yuan (roughly $48 million) funding after going online.

Group buying: survival of the fittest

24Quan, which used to be one of the largest group buying websites and top 10 most-visited sites of the industry, officially went offline in January 2013 due to shareholders' contradictions and external performance pressures.

Meanwhile Meituan, a leading player in the market, recorded daily sales of 100 million yuan (roughly $16m) in December 2013. Along with Dianping, a competitor, the two sites have stood out among thousands of group buying sites in China.

Gaming: sunrise industry with highly risks

Happy Farm, launched in 2008, was one of the earliest social games in China. Nobody expected that Five Minutes, the game development company behind it, would be forced to shut down in just five years. When Happy Farm got traction, China's Internet giant Tencent bought the rights to the customized version for its QQ IM users, and other Chinese social platforms, such as Kaixin001, also copied the game.

The Tencent one turned out to be a success in terms of both popularity and revenue. In August 2013, following a request by Five Minutes, the original Happy Farm was removed from Renren, a Chinese social networking service provider.

Clone: challenges of acclimatizing to the Chinese market

Airizu, a short-term private rental websites launched in April 2011, was an outstanding company in the early stages of its development. It is also known as Germany's Internet incubator Rocket Internet's Chinese Airbnb clone.

According to Technode.com, the Chinese partner of British technology site TechCrunch, HomeAway, an American online vacation home rental provider, and China's local online travel service eLong offered to acquire Airizu but were turned down since the German owner Samwer brothers were not happy with the offered price.

As of February, 2014, no Airbnb clone have survived while existing businesses in short-term apartment rentals, such as Mayi and Xiaozhu, have taken a different approach compared to Airbnb, according to Technode.com.

Online-to-offline (OTO)

To quote German philosopher Georg Wilhelm Friedrich Hegel, 'All that is real is rational. All that is rational is real'. The development of OTO for Internet companies began to appear in the early years of Web popularization and began to expand on the back of mobile Internet boom.

Jiekuwang was launched in 2011 to help traditional offline businesses carry out marketing and loyalty programs online. The company announced 100 million yuan in 2012 and 200 million yuan funding in 2013. However, the site has since gone offline due to cash problems, layoffs and fall in business volume.

Niche market: innovating to meet the needs of market

Sock Manager is a subscription-based sock retailer. Founded in 2010, the company always wanted to be creative to attract customers. For instance, female customers could ask their better half to pay for their purchases. Another creative method was an annual subscription that allowed subscribers unlimited supply of socks. The service was shut down in May 2013.

Transformation always comes with pain

Ximi started off in 2008 as an online snacks retailer. It was doing well before the company began building brick-and-mortar stores, warehouses and logistics. The company decided to close down the snacks business in late 2011 and transformed it into lunch delivery in 2012. However, the site was shut down again in 2013.

The past glory and present shame

Yibai Shopping was founded way back in 2007, offering spending installment plans for credit cards. It received $10 million from Gobi Partners in Series A funding shortly after its launch and its annual sales volume reached more than 100 million yuan in the following years.

However, series of scandals, including problems in payments to suppliers and defaults in products, forced Yibai Shopping to close down the site in June 2013.