In a sincere form of flattery, Chinese companies look to American ones for development ideas and to emulate U.S. business plans. Downright copying does occur, but in many cases an original idea by another firm is altered to reflect unique Chinese tastes and local customs. Copying is also widespread in cyberspace, as the barriers to entry are low and the businesses are very scalable once created. In this space, companies have a habit of copying each other across the globe. (For related reading, check out Top 6 Factors That Drive Investment In China.)

IN PICTURES: 6 Great Companies With Top-Notch Healthcare Benefits

Below is a list of five large Chinese companies and the U.S. counterparts that have served as their inspiration. Given the giant and growing Chinese consumer market, these firms may be well on their way to growing bigger than their U.S. rivals.

  1. bills itself as China's leading Internet television company. The company was founded in 2005 and changed its name from to, making little mistake that the website is modeled after Google's (Nasdaq:GOOG) YouTube. As with YouTube, the primary emphasis is for users to view and share videos. YouTube was also founded in 2005. estimates it has 40% market share in China, and the site has 203 million monthly unique visitors from homes and another 61 million monthly unique users from internet cafes. YouTube lists its usage daily and recently estimated 2 billion views per day and 20 hours of video uploaded on its site every minute.

  2. is headquartered in Beijing and focuses on selling books online. It believes it is China's largest bookseller and offers nearly 600,000 titles, most of which are in Chinese. The company just went public in early December in the U.S. and is quickly branching into media products and general merchandise. In other words, it has ambitions to become China's (Nasdaq:AMZN), which has evolved into selling books and just about any other merchandise imaginable. With about $300 million in annual sales, the company still has quite a way to go to match Amazon's nearly $31 billion in sales over the past 12 months.

  3. Baidu (Nasdaq:BIDU)
    Baidu was founded in 2000 and serves as an internet search engine in China and Japan. The company is considered the equivalent of a Google or Yahoo (Nasdaq:YHOO), and it is as dominant as Google with an estimated 70% market share of the online advertising market in China. It increased its dominance once Google left the Chinese market and is also trying to free itself from Yahoo, which is a large shareholder in Baidu. In addition to search capabilities, Baidu offers social networking online and through smartphones.

IN PICTURES: 8 Tips For Starting Your Own Business

  1. China Mobile (NYSE:CHL)
    China Mobile is the dominant cell phone provider in China and, like Baidu, controls about 70% of the market. It is quite a bit larger than the mobile phone business units of AT&T (NHSE:T) or Verizon (NYSE:VZ) in the U.S. Recently the company listed 575 million subscribers, making it the largest in the world. Like AT&T, it saw a big boost to its business when it started offering Apple's iPhone last fall. The U.S. market is much more fragmented, with players such as Sprint (NYSE:S) and T-Mobile, as well as a growing number of pre-paid wireless providers. With sales of just over $70 billion over the last 12 months, China Mobile has a ways to go against AT&T and Verizon, which log more than $100 billion in sales annually. However, the American counterparts also have landline businesses and provide internet access. Sprint is a more direct comparison and only reported $32 billion in sales over the last 12 months. (For more information on phone companies, see A Look At Cell Phone Companies.)

  2. Huawei
    Huawei is the largest telecommunications equipment provider in China. It is fast after Cisco's (Nasdaq:CSCO) market share in the U.S. and worldwide, but it has had a tough time breaking into the U.S. market given telecom and communications networks can be a matter of national security. Additionally, Huawei receives a fair amount of government backing. It is also a private firm, which means financial data can be hard to come by, but recent estimates put it at around No.2 to No.3 in the world.

The Bottom Line
China is still just getting started with a capitalistic approach to building businesses and creating new markets for a burgeoning class of consumers. A good place to start for Chinese entrepreneurs is to look to the U.S. for ideas, but then customize them to local tastes and customs. The strategy is paying off big for the above companies and has resulted in firms that are now some of the largest in the world in terms of users and profits. (For an introduction to Chinese markets, see Investing In China.)

For the latest financial news, see Water Cooler Finance: Canadian Takeover And U.S. Tax Breaks.

Related Articles
  1. Investing

    How To Build a Currency Hedged Strategy?

    We are still unsure of how to implement a currency hedge strategy based on the dollar's movement. So let’s focus on what’s easier to measure: time horizon.
  2. Mutual Funds & ETFs

    The Top Vanguard Emerging Market ETF

    Learn why growth investors should consider investing in VWO's portfolio of emerging market stocks.
  3. Investing

    Which Economy Is Larger - The United States or China?

    China's economy may be larger than the U.S. economy, but it all depends on which exchange rate method you use to make the GDP comparisons.
  4. Stock Analysis

    Baidu and CloudFlare's Virtual Private Venture Explained

    Learn about China's Great Firewall and the advent of new virtual joint ventures between businesses in China and the United States.
  5. Investing

    What a U.S. - Asia Trade Deal Means For Business

    The U.S. and 11 other countries, comprising 40% of the world’s total economic output, have finally reached agreement on the Trans-Pacific Partnership.
  6. Mutual Funds & ETFs

    Top 4 India Equity Mutual Funds

    Discover four of the top India-focused equity mutual funds, including their objectives, how investments are chosen and how assets are allocated.
  7. Mutual Funds & ETFs

    Top 3 Emerging Markets Bond Mutual Funds

    Discover detailed analysis of the top three mutual funds offering exposure to the emerging markets bonds, and learn about the suitability of these funds.
  8. Investing

    What a Fed Delay Means for the ECB & BoJ

    The Fed’s continued delay has repercussions for more than just the U.S. economy and markets. The ECB and the BoJ may support the case for stocks in Europe.
  9. Investing

    How Worried Should We Be About China?

    An economic slowdown, a freezing up in trade and plunging markets and currencies are casting a shadow across Asia—and the globe. How worried should we be?
  10. Economics

    Keep an Eye on These Emerging Economies

    Emerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
  1. Is Mexico an emerging market economy?

    Mexico meets all the criteria of an emerging market economy. The country's gross domestic product, or GDP, per capita beats ... Read Full Answer >>
  2. Why should an investor include an allocation to the telecommunications sector in ...

    An investor should include an allocation to the telecommunications sector in his portfolio, because telecom offers an investor ... Read Full Answer >>
  3. What portion of the telecommunications sector will benefit most from continued growth ...

    The portion of the telecommunications sector that is projected to benefit most from the continued growth in the use of cellphones ... Read Full Answer >>
  4. What is the difference between a greenfield investment and a regular investment?

    A greenfield investment is a particular type of investment where an international company begins a new operation in a foreign ... Read Full Answer >>
  5. How strong are the barriers to entry for new companies in the telecommunications ...

    The barriers to entry for new companies in the telecommunications sector are very strong and primarily revolve around the ... Read Full Answer >>
  6. What are the benefits for a company investing in a greenfield investment?

    Advantages of greenfield investments include increased control, the ability to form marketing partnerships and the avoidance ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!