Forbes China released its rankings of China's most promising small and medium-sized enterprises (SMEs) Tuesday, with a particular rise seen in the number of online service providers on the list.
According to Forbes, 20 online service providers - covering fields including smartphone game developers and online forum operators - are considered to have great potential in 2014. The magazine only named 12 such companies in its 2013 rankings, which were released last January.
Hong Kong-listed Boyya Interactive International Ltd, an online card and board game developer focusing on mobile games, was selected as the most promising listed company.
Shanghai Kingnet Technology Co, a social network game operator that is also engaged in mobile game developing, was named the most promising unlisted company.
Companies in industries ranging from pharmaceuticals to tourism agencies were also included in Forbes' rankings.
Liu Dalong, director of the mobile Internet research center at Beijing-based iResearch Consulting Group, told the Global Times Tuesday that mobile game design is a hot area, and one that should interest entrepreneurs.
"There's abundant demand in the mobile game market, which has been growing very quickly in recent years," Liu said.
"Many Internet service giants have not invested heavily in developing mobile games, and that gives SMEs an opportunity to grow without being pressured by the big players," he noted.
Forbes took into account a range of factors, including companies' sales and profit growth.
A number of mobile Internet companies have had strong results over the past three years. For example, Boyya, which is based in Shenzhen, South China's Guangdong Province, made an annual net profit of 159 million yuan ($26.3 million) in 2012, up by 30.9 percent from 2011, according to the firm's prospectus issued on October 31, 2013.
The company also said its net earnings have grown by more than 30 percent for three consecutive years since 2009. It has not released its annual report for 2013 yet.
Wang Danqing, a partner at Beijing-based ACME consultancy, told the Global Times Tuesday that mobile Internet companies are often considered to be promising because it is easier for them to innovate than for firms in traditional industries.
"Considering the fast development of China's Internet market, such companies can quickly carry out technological reforms and be innovative with their business models," Wang said.
In December 2013, the Ministry of Industry and Information Technology issued 4G licenses to China's three State-owned telecommunications companies, which will further boost development of the mobile Internet market, Liu said.
Meanwhile, 14 of the most promising companies are listed overseas, compared with only six last year, and 70 percent of these companies are headquartered in Beijing, Shanghai and Guangdong Province, Forbes said.
Compared with their US and European counterparts, however, China's entrepreneurs are not innovative enough, Wang said.
"It is extremely difficult for Chinese SMEs, especially those in the online services market, to go global, because they always offer copycat products of US companies and succeed thanks to China's huge market," Wang said. "Chinese companies are not used to being innovative, which is the biggest obstacle to their future development."
Also, China's SMEs suffer from a lack of financing sources, such as angel investors and venture capital funding, Wang noted.
Weak intellectual protection is another problem. "Many SMEs fail because their ideas are copied by large players in the same industry. That forces them to exit the market, because they do not have a large customer base like big companies," said Wang.