In only a few decades, China has gone from copying even cumbersome foreign commercial internet models to building internet economic models that foreign countries are now imitating. However, the race among domestic internet enterprises to offer huge subsidies in order to raise their market value has left foreign companies wondering how they can survive in then long term.

Domestic companies' eagerness to get a bigger slice of the new capital market cake after its possible privatization has intensified the "money-burning" race, raising doubts whether this is a normal development model. The formation of the "money-burning" circle among domestic internet enterprises is closely linked to the present development status of the online sector.

The internet-dependent generation, or those born in the 1980s and 1990s, is on the way to becoming the leading consumer group in China. But because of the relatively small population base of such people, an internet-based consumption habit is yet to be formed in the country.