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.

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