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On October 19, 2026, Qin Shuo published an article on Huxiu, citing data to point out that 243 2B software companies on the A-share market have fallen into industry-wide losses. The article states that from 2021 to 2025, the revenue of these 243 companies grew by only 7.9%, and their non-recurring net profit shifted from a profit of 17.89 billion yuan to a loss of 17.68 billion yuan, with 64.7% of them operating at a loss. Qin Shuo attributed the causes to a cultural habit of valuing hardware over software, a low-margin model dominated by project-based work, lowest-price bidding (a project in one province with a budget of 7.672 million yuan was won with a bid of 10 yuan), and repeated construction by the digital technology subsidiaries of central and state-owned enterprises squeezing out market-oriented vendors. He proposed breaking the deadlock in four areas: comprehensive evaluation in bidding, productization plus a subscription model, fair market access, and cost reduction through AI agents, and cited examples of enterprises using agents to shorten customized delivery cycles to about one week and reduce costs to one-fifth to one-tenth of the original. Currently, this article is the only source reporting this, and there have been no subsequent developments.
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Oct 19
Huxiu
Qin Shuo: All 243 2B software companies on the A-share market are losing money industry-wide—how much longer will China's software industry keep losing money?
Citing data, Qin Shuo says that the revenue of 243 2B software companies on the A-share market grew only 7.9% from 2021 to 2025, while non-recurring net profit swung from a profit of 17.89 billion yuan to a loss of 17.68 billion yuan, with 64.7% of companies operating at a loss. The article attributes the causes to a cultural habit of valuing hardware over software, a low-margin model dominated by project-based work, lowest-price bidding (a project in one province with a budget of 7.672 million yuan was awarded for 10 yuan), and repeated construction by the digital technology subsidiaries of central and state-owned enterprises squeezing out market-oriented vendors. The author proposes breaking the deadlock in four areas: comprehensive bid evaluation, productization plus subscription models, fair market access, and cost reduction through AI agents, and gives the example of an enterprise that used agents to shorten custom delivery cycles to about one week and cut costs to 1/5 to 1/10 of the original.