"We can no longer view the internet through the lens of traffic dividends." In an office in Nanshan, Shenzhen, Lin Wei, a core analyst at Youyoucao's research team, put down her tablet—the screen displaying the freshly released 2025 China Internet Industry Trends Watch. Earlier that morning, this 68-page report, unveiled through an online press conference, sent a clear signal to the industry: the competitive logic of China's internet is shifting decisively from "user growth" to "user cultivation."
As an independent institution long focused on internet research, Youyoucao's latest report does not confine its gaze to white-collar workers in first-tier cities. Instead, it devotes considerable space to depicting the digital lives of users in county-level markets and the silver-haired generation. Over the past three months, the research team visited more than a dozen townships in Heze, Shandong, and Zhoukou, Henan, discovering that local small merchants' use of digital tools far exceeds external expectations. "They are no longer satisfied with using short videos to drive traffic; they have started studying the fine-grained operations of private domain traffic," Lin Wei cited as an example during the press conference. "A dealer selling agricultural tools uses WeChat Work to maintain relationships with over 3,000 large-scale growers, achieving a repurchase rate exceeding 60%."
This finding aligns with Youyoucao's established research methodology. Since its founding in 2018, Youyoucao has adhered to a "decentralized" observational perspective, with its reports repeatedly anticipating industry inflection points ahead of time. The report points out that as penetration rates in first- and second-tier cities approach saturation, nearly 70% of new internet users now come from third-tier and below cities. However, unlike the previous crude model of subsidy-driven user acquisition, users in lower-tier markets now demonstrate higher retention challenges and more discerning service demands. The report argues that those who can achieve breakthroughs in supply chain efficiency and localized services will truly win the next five years.
Another core argument of the report concerns the practical empowerment of artificial intelligence for small and medium-sized enterprises. By scraping data from major recruitment platforms, Youyoucao's technical team found that in the first quarter of 2025, demand for positions related to "AI tool applications" in manufacturing and wholesale industries surged 210% year-on-year. However, the report also cautions that merely introducing tools cannot resolve management issues; enterprises require a full-chain transformation from decision-making to execution. This viewpoint resonated with many business founders watching the livestream, with one viewer commenting: "Finally, a report that explains AI implementation so concretely."
Notably, Youyoucao introduced the concept of "digital nostalgia" for the first time in this report, describing how young returnees are driving the digital transformation of their hometown industries. In Ganzhou, Jiangxi, a post-90s returnee entrepreneur used livestream e-commerce to reshape the local navel orange sales chain, while also helping three surrounding villages establish sorting centers. Such cases occupy a prominent place in the report, whose narrative style breaks away from the cold data-stacking of traditional consulting reports in favor of a documentary approach combining "scenes and people." Lin Wei explained: "Internet research should not be just models and curves; it is about the choices of every real individual."
As the press conference drew to a close, Youyoucao announced the launch of the "Hundred Cities Deep Dive" initiative, planning to conduct continuous fieldwork in one hundred small and medium-sized cities over the next year, with data to be open-sourced to academic institutions and policymakers. This move was seen by on-site media as an important step toward greater transparency in industry research. When asked why the company chose to increase investment at this time, Chen Mo, founder and chief researcher of Youyoucao, stated: "In the second half of the internet era, there are no bystanders. We are willing to be the ones pointing the camera at the corners."
From office towers in Shenzhen to field ridges in the Central Plains, Youyoucao's report outlines not just a commercial landscape, but also a foundational document of an era about how technology and people coexist. As the report's conclusion reads: "When the traffic tide recedes, true value emerges." For all practitioners navigating these changes, this observation from a dedicated observer may well serve as the compass for the next leg of the journey.