# Survey on the Operational Status and Digital Transformation of Micro and Small Market Entities
**(Q3 2025)**
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## Overview
Micro and Small Market Entities — including micro and small enterprises and individual businesses — form a vital part of China’s economy.
Since Q1 2023, the Tencent Research Institute, in partnership with “Penguin Survey,” has conducted quarterly online surveys to track their operational health.
**Q3 2025 Survey Details:**
- **Survey period:** September 24–29, 2025
- **Valid samples:** 8,656
- 6,476 tracking samples
- 1,529 WeBank WeChat public account samples
- 651 WeBank App samples
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## Key Methodological Updates
1. **Focused scope** – Removed medium-sized enterprises (over 300 employees and 3M+ RMB annual revenue) to focus exclusively on micro and small businesses.
2. **Expanded sources** – WeBank App and public account samples formally included, with historical data updated.
**Weighted Integration Approach:**
- Adopted **Meta-Analysis weighting** based on Q3 2024–Q2 2025 as the base.
- Final weights: Tracking Sample **52.8%**, WeBank WeChat **18.8%**, WeBank App **28.4%**.
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## Executive Summary of Findings
### 1. **Operational Performance Declines**
- **Losses** up 0.2pp QoQ; **stagnation** down 0.3pp QoQ.
- **Profitability index** down 0.3 to 71.4
- **Revenue growth index** down 0.5 to 52.0 (historic low)
### 2. **Market Expectations & Investments Weak**
- Market expectation index: **65.6** (down 0.9 QoQ, 5th consecutive drop)
- Investment tendency index: **65.5** (down 0.2 QoQ, 4th consecutive drop)
### 3. **Costs & Demand Pressures**
- Labor cost coverage rate **39.4%** (highest difficulty, rising)
- Store rent & raw materials costs eased QoQ
- Low consumption willingness & homogenized competition up YoY
### 4. **Policy Support Stable, Sentiment Slightly Warmer**
- Preferential interest/subsidy coverage: up 2.1pp to 29.5%
- Business climate perception index: up 0.6 to **-6.0**
### 5. **Financing Demand Rises**
- Financing need: **70.9%** (up 2.9pp QoQ)
- Financing gap: **37.0%** (up 0.9pp QoQ)
- Bank channels growing, interest rate spread widened to **252bps**
### 6. **Digital Transformation Challenges**
- Online penetration at **48.7%** (down 1.0pp QoQ, 7th consecutive drop)
- Hybrid model (online ≥30% of revenue) up to **27.6%** (record high since 2023)
- Cross-platform operations **72.2%** (up QoQ)
- Live streaming penetration **30.5%** (down QoQ)
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## Detailed Analysis
### Operational Status
- **Loss share:** 5.9% (up QoQ, up YoY)
- **Stagnation share:** 11.1% (down QoQ, up YoY)
- **Trend:** Both profitability and revenue growth above 50 baseline but declining.
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### Market Sentiment & Investment
- Market expectations declined for **5 consecutive quarters**.
- Investment tendency declined for **4 consecutive quarters**.
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### Costs & Consumer Demand
- Labor costs rising: **+0.4pp QoQ**
- Raw materials: **32.3%** coverage (slightly up QoQ, down YoY)
- Store rent: dropped to **31.5%**
- Consumption willingness down QoQ but up YoY → demand weakness persists.
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### Policy Environment
- **Universal policies coverage:**
- Preferential rates/subsidies: 29.5% (**up 2.1pp QoQ**)
- Tax/fee reduction: 28.6% (**down 0.5pp QoQ**)
- Social security deferral: 21.0% (stable)
- **Special support policies:** modest QoQ increases across categories.
- Business climate perception: **-6.0** → still "cold," but slightly improved.
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### Financing Dynamics
#### Financing Demand & Gap
- Need: 70.9% (**↑ 2.9pp QoQ**)
- Gap: 37.0% (**↑ 0.9pp QoQ**)
#### Credit Channels
- Bank-only borrowers: **48.2%** (↑ QoQ)
- Non-bank-only borrowers: **43.7%** (↓ QoQ)
- Both: **8.1%** (↓ QoQ)
#### Interest Rates
- Composite rate: **5.57%** (↑ 30bps QoQ)
- Bank: 4.39% (↑ 9bps)
- Non-bank: 6.91% (↑ 67bps)
- Spread widened from **194bps** to **252bps**.
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### Digital Transformation & Sales Channels
#### Online Penetration
- 48.7% with online stores (↓ QoQ, 7th quarter in decline)
- Hybrid (≥30% revenue online): **27.6%** (↑ QoQ, record high since 2023)
#### Online vs Offline Growth
- Online faster growth: **34.1%** (↓ QoQ)
- Offline faster growth: **18.3%** (↑ QoQ)
- Gap narrowed from 19.5% (Q2 2024) to **15.8%**.
#### Cross-Platform Operations
- 72.2% operate on multiple platforms (**↑ QoQ**)
- High concentration sales: **32.0%** (↓)
- Balanced distribution: **59.4%** (↑)
- Highly dispersed: **8.7%** (↑)
#### Live Streaming Trends
- Penetration: **30.5%** (↓ QoQ)
- High-dependence live stream sellers (>30% online revenue): **↑ 0.4pp QoQ**
- Short video product recommendations: 54.6%
- No live/short video: **14.9%** (↓ QoQ)
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## Strategic Recommendations
1. **Targeted Policy Support** — Stabilize operations for micro entities and protect employment.
2. **Adjust Pricing Strategies** — Avoid prolonged aggressive price cuts that reduce online sales appeal.
3. **Support Digital & Cross-platform Growth** — Encourage diversified multi-channel engagement leveraging AI-assisted tools.
**Examples:**
- **[AiToEarn](https://aitoearn.ai/)** — open-source AI content monetization, cross-platform publishing (Douyin, Kwai, WeChat, Bilibili, Rednote, Facebook, Instagram, LinkedIn, Threads, YouTube, Pinterest, X) and analytics.
- **[AI Model Rankings](https://rank.aitoearn.ai)** — compare AI generation performance.
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## Footnotes
1. Weighted average calculated from four indicators — profitability, revenue growth, market expectations, investment inclination — using inverse variance principles.
2. Lending rate brackets: `<3.5%`, `3.5–5%`, `5–8%`, `8–10%`, `10–12%`, `12–15%`, `15–30%`, `>30%`; composite index based on weighted midpoints.
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