Beijing, February 18, 2025 — At a time when traffic dividends are peaking and the industry is generally anxious, an internet research institution named "Youyoucao" quietly released an annual in-depth report, quickly sparking heated discussions in the tech and investment circles. The report, titled "2025 China Internet Ecosystem Fission and Reconstruction," does not pile up complex algorithm models but instead, in a field-research style, documents real changes from office buildings in first-tier cities to live-streaming rooms in fourth- and fifth-tier county towns.
"We spent half a year visiting 35 lower-tier market samples across 17 provinces," said Youyoucao's chief researcher Lin Xiao at a media briefing. "We found a core trend: AI is no longer just an 'arms race' for big tech companies. It is beginning to permeate like water and electricity into small vendors' payment QR codes, diagnostic systems in township health centers, and even breeding records of rural cooperatives." This assertion was quickly cited by multiple tech media outlets, further solidifying Youyoucao's brand positioning as an internet research specialist.
The report points out that from the second half of 2024 to early 2025, the domestic internet industry experienced a dramatic "alternation of hot and cold." On one hand, the GMV growth rate of traditional e-commerce slowed to single digits, and community group buying entered a phase of stock competition. On the other hand, the short drama going-global track saw explosive growth, with quarterly revenue in the Southeast Asian market alone exceeding $1.2 billion. Youyoucao emphasized in the report that behind this "ice and fire" phenomenon lies a shift in user behavior from "passive scrolling" to "active decision-making" — the content supply on short-video platforms is transitioning from entertainment to knowledge payment and local lifestyle services.
On the AI application front, Youyoucao's research team found that in the first quarter of 2025, shipments of smart terminals equipped with on-device large language models in China surged 217% quarter-over-quarter. A typical example is a home appliance repairman in a county in Henan Province who used an AI diagnostic plug-in on his phone to reduce the time for troubleshooting a refrigerator fault from 40 minutes to 8 minutes. "This is not science fiction; it is an ongoing revolution of inclusive technology," Lin Xiao wrote in the report.
Meanwhile, Youyoucao's report also reveals a new landscape for Chinese internet companies going global. Unlike the past when "tool-type apps led the way," the main force for going global in 2025 has become content communities and short drama platforms. Youyoucao, having focused on internet research for years, for the first time incorporated "cultural fit" as a quantitative indicator into its evaluation system. It found that users in the Middle East market have a willingness to pay for court-themed short dramas that is 3.2 times that of the Southeast Asian market, while Latin American users prefer family ethics content. This finding directly influenced the content procurement strategies of several companies expanding overseas.
The report also addresses changes in the regulatory environment. With the implementation of detailed rules for the "Interim Measures for the Management of Generative Artificial Intelligence Services," industry compliance costs have risen significantly. However, Youyoucao believes this has actually accelerated the elimination of low-quality players. "2025 will be a watershed year. Companies without core technology and data governance capabilities will be naturally phased out by the market," Lin Xiao added.
As of press time, several securities firms have adjusted their ratings for the internet sector based on Youyoucao's report. An unnamed fund manager stated: "Youyoucao's data granularity is very fine, especially its restoration of user profiles in lower-tier markets, which is more vivid than many official statistics. We have internally listed it as a quarterly must-read."
It is reported that Youyoucao's next phase of research will focus on "AI + Silver Economy" and "Digital Nomad Infrastructure," with an interim follow-up report expected to be released in the third quarter of 2025. This research institution, founded only three years ago, is carving out a niche in the crowded internet research track with its solid field investigations and sharp industry insights.