Key Takeaways:

  • The recent contraction in China's overheated new energy vehicle market points to an unavoidable wave of industry consolidation and brand alliances
  • A fast-growing online dating company's upcoming Hong Kong IPO relies on thousands of human facilitators, bucking the global trend of AI-driven matchmaking

image credit: Bamboo Works

We're currently witnessing two fascinating shifts in China's corporate landscape — one involving an overdue pause in a booming tech-driven sector, and the other a surprising rejection of modern technology in favor of traditional methods. On one hand, the country's skyrocketing new energy vehicle (NEV) market has suddenly tapped the brakes, forcing a hard look at a needed industry consolidation. On the other hand, a rising star in the online dating world is actively bucking the global AI trend, opting instead for real-life human matchmakers.

We'll start with the NEV sector, which has been all the rage among Chinese consumers but has hit a sudden speed bump this year. According to the China Passenger Car Association, NEV sales plunged 21% in March. That followed an even weaker start to the year, resulting in a 24% drop in the first quarter. While NEVs still accounted for nearly half of all vehicle sales during the quarter — as traditional internal combustion engine cars also fell sharply — the sudden spin into reverse is impossible to ignore.

We believe this pullback isn't a massive shock. By the end of 2025, at least 50% of all new sales were NEVs. Overall adoption and sales growth have been extraordinary, and it shouldn't be surprising that the market needs a moment to pause and contract. Subsidies have been rolled back or completely eliminated. Furthermore, intense price wars throughout last year pushed massive inventory to dealerships.

While we expect sales to eventually return to growth, the immediate reality is stark: There are still way too many NEV manufacturers in China today. In the U.S., the market operates efficiently with roughly three national brands and a handful of foreign competitors — a landscape historically shaped by the consolidation of brands under umbrellas like Volkswagen and General Motors. In contrast, China boasts more than a hundred NEV manufacturers.

There's no way all of these companies are sustainable or making profits amid a grueling price war. Even some of the bigger, more successful players are losing money. Something needs to give, but we aren't banking on straightforward M&A. Psychologically, many Chinese entrepreneurs equate mergers to defeat. Instead, we're seeing alliances. XPeng has partnered with Volkswagen, Zeekr signed an alliance with the French group that owns Peugeot and Citroen, and Leapmotor (9863.HK) has aligned with Stellantis. While volume leaders like BYD (1211.HK; 002594.SZ) are too far ahead to merge, smaller and weaker companies will likely have to group together rather than simply disappearing.

Finding love the traditional way

Shifting gears to a lighter, yet remarkably profitable market, we're taking a look at a company called Milian. As one of a new generation of online matchmakers for young Chinese, the company has filed for a Hong Kong IPO and boasts impressive financials, including 74% revenue growth last year and a tripling of its profit.

What makes Milian uniquely Chinese — and particularly fascinating — is its business model. Rather than relying heavily on algorithms, the company employs thousands of real-life facilitators. These human matchmakers join the online dating process to keep conversations going and ease newly matched couples through the awkward getting-to-know-you phases.

In a world where AI is everywhere and investors generally demand its usage, we think Milian's human-centric approach is a brilliant strategy for diversification. It solves a specific cultural dilemma: Chinese youth are famous for lacking dating skills because their parents often discourage romantic pursuits until they finish their education. Having a third-party advisor provides a necessary social bridge.

Other platforms, such as the dating app Momo (NASDAQ:MOMO), have used a similar advisory approach but rely on AI as the advisor. Western counterparts like Tinder (NASDAQ:MTCH) also increasingly lean on AI to analyze photos, enhance safety, and determine optimum matches. Yet, Milian is actively going against the automated grain. In a market where tech IPOs usually revolve around AI chips and circuit boards, this contrarian model will likely appeal to a very specific type of institutional investor focused strictly on financials and novelty. Its ultimate success will depend on whether users remain satisfied with this distinct human touch over the convenience of traditional apps. Only time will tell, but it's an intriguing story we'll continue to watch.

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China Inc by Bamboo Works discusses the latest developments on Chinese companies listed in Hong Kong and the United States to drive informed decision-making for investors and others interested in this dynamic group of companies.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.