Startups must be able to work out real needs of consumers

As internet-enabled business accounted for an increasing share of China's economy, it was of great importance for Chinese internet startups to be able to deal with the information and grasp the opportunity to use the internet to transform traditional industry, said Haim Mendelson, professor at the Stanford Graduate School of Business.

Mendelson said the key to the capability lay in the ability to collect data, analyze data, and figure out consumers' actual needs or the suitable business model.

"For internet startups, the crucial advantage lies in starting in the greenfield and developing new insights based on data," he said.