Alibaba is rapidly expanding its new offline retail food store chain, Freshippo (Hema in Chinese), with stores operating on cutting-edge innovations.
For many years, China’s emerging companies, especially those in the internet sector, have relied on foreign capital. Alibaba and Tencent were nurtured by overseas venture capital, and were eventually listed abroad. These two companies have today become world-class giants. The market value of Alibaba was $495 billion as of late May, while Tencent’s valuation was $605 billion. This puts them among the world’s top 10 most valuable companies. The success of China’s leading tech companies is an understandable source of pride to many in China. But for China’s policymakers, a question presents itself: why do so many outstanding Chinese companies end up going public overseas?
Forget e-commerce. In today’s China, the smartest businesses are moving the digital revolution into the offline world as the boundaries between online and offline become increasingly blurred. The integration of information technology into our daily lives is allowing companies to apply advanced big data techniques to transform a range of industries previously considered relatively impervious to digital disruption. For businesses across nearly every sector, the key to future success now lies in three areas: data, smart systems and the sharing economy.
NetEase is the Chinese internet pioneer you have probably never heard of. Founded in 1997, before its bigger and better-known Chinese internet peers Baidu, Alibaba and Tencent (collectively known as BAT), it is largely unknown outside of China. NetEase is currently making big pushes into many new businesses: e-commerce, online learning, music streaming and a host of other businesses, but it still has a long way to go to climb back to the top of the China tech tree. Analysts note that NetEase lacks the breadth of its rivals’ businesses, and that will likely stymie its growth, unless it can continue to diversify successfully.
China’s business world is littered with rags-to-riches entrepreneurs—Jack Ma, chairman of Alibaba Group, was an English teacher before starting Alibaba. Not all such magnates are equal, however, and joining Ma in the upper echelons of China’s rich list was Wang Wei, chairman of delivery and logistics company SF Express, who initially started out by lugging packages between Hong Kong and mainland China, operating in a legal gray zone as he did so. But now SF Express has grown to become the most successful logistics company in China. Listed in Shenzhen Stock Exchange in early 2017, the company has many competitive advantages over its counterparts.
Live streaming in China is not new. Even back in 2005 there were live streaming businesses based on the PC, but it was not until 2014 that this industry really started to take off in the Chinese market, as China’s almost 700 million internet users became aware that mobile live-streaming is fun and can even be profitable. China’s internet giant companies have long recognized that live streaming is going to be the new portal to bring in traffic, so just like their competition in other battle fields, Baidu, Tencent and Alibaba have spread their tentacles to live streaming and mapped out their respective businesses.
It is a good time to reflect on Singles Day, a shopping carnival initiated by Alibaba that has just yielded a record-breaking sales of $17.8 billion, exceeding that on “Black Friday” in the US. It looks like everyone benefits: vendors sell, buyers get cheap goods and Alibaba profits through advertising fees and transaction commissions. But consider: to sell more, vendors lower product prices and sacrifice per-unit margins, yet they might not be able to make up on volume, as most of the items purchased are durable goods and therefore most of the increased sales on Singles Day are probably shifting sales from earlier or later periods.
With humble beginnings in Hangzhou, Jack Ma went on to create an e-commerce titan that has grabbed the attention of China and the world. Today Jack Ma and Alibaba’s story has become the stuff that legends are made of. Duncan Clark has witnessed firsthand Jack Ma’s dizzying rise in China’s e-commerce firmament. A former investment banker at Morgan Stanley, Clark first got to know Jack Ma in 1999 when he met him in the small Hangzhou apartment where Ma and his friends famously founded Alibaba. In this interview, Clark, also the author of Alibaba, the House that Jack Ma Built, talks about Alibaba’s incredible story and its impact on China.
Currently the most valuable fintech company in China, Alibaba’s Ant Financial owns a myriad of businesses: China’s largest payment tool AliPay and a variety of financial services in areas like banking, funds, insurance, credit scoring systems, etc. With over 400 million active users, it has ambitions to expand further into the Chinese hinterland as well as into global markets—something never done by Chinese financial companies before. How will Ant realize its elephantine goals? What is the logic behind its diverse businesses and which one is the focus? Can Ant become the Taobao of the financial industry? We offer some answers.
Alibaba, China’s largest e-commerce firm, recently smashed global records for its ‘Single’s Day’ promotion on 11th November 2015, selling $14.3 billion worth of merchandise in just 24 hours. This is the equivalent to 120,000 orders placed every minute, covering both online spaces such as Taobao and Tmall as well as 180,000 brick and mortar sites across 330 cities in China. The numbers are staggering, but they also show a problem with the sheer scale of selling—how to ensure the quality and authenticity, of goods. Alibaba is now tightening the screws on fake goods being sold on its platforms, but can it stay one step ahead of counterfeiters?