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Alibaba, Tencent spend billions in race to be one-stop online shop

阿里巴巴和腾讯大举投资 提供中国在线一站式购物服务.jpg

Alibaba and Tencent spent more than $8 billion last year alone backing often strikingly similar ventures, as the Chinese Internet giants race to create online one-stop-shops to win the digital loyalty of a tenth of the world's population.


Before China became the biggest smartphone market, there was little overlap between the businesses of e-commerce leader Alibaba Group Holding Ltd, social networking firm Tencent Holdings Ltd and search engine provider Baidu Inc.


Now, as more and more Chinese use their phones for everything from shopping to booking restaurants, the three companies are increasingly stepping over each other-and investing in the same services-to attract the same users.


In little over a month, taxi-hailing apps Didi Dache, supported by Tencent, and Alibaba-funded Kuaidi Dache raised over half a billion dollars each, while U.S. taxi app Uber attracted an undisclosed sum from Baidu.


The next arena looks set to be group-buying services, where customers agree to buy a certain item or service at the same time to gain discounts. Baidu bought out Nuomi last year and Alibaba-backed Meituan on Monday said it raised $700 million, valuing the company at $7 billion.


Group-buying site Dianping plans to raise a similar amount, people familiar with the matter told Reuters, declining to be named as they were not authorised to speak to the media. A Dianping spokeswoman declined to comment on the fundraising.


Fuelling the investment frenzy is the realisation that the platform with the most users will have by far the biggest returns, according to Taipei-based tech commentator Ben Thompson, who writes at stratechery.com.

为stratechery.com网站撰稿的台北科技业评论员Ben Thompson认为,他们意识到哪个平台拥有的用户数量最多,获得的回报也将会最大,这助长了这股投资热潮。

"Alibaba, Tencent and Baidu… don't want to miss out-or finish a distant second, which is just as bad – so they're investing heavily," he said.


Asked about its investments, an Alibaba spokeswoman said its strategy is focused on increasing users and expanding its products and services. Tencent did not respond to several requests for comment and Baidu declined to comment.


Alibaba founder Jack Ma and Tencent chief Pony Ma have a history of one-upmanship in sectors ranging from gaming to microblogs. That rivalry aside, all online firms are looking over each other's shoulders to ensure they don't miss out on the next big thing.


"They have hundreds of people scouring the startup universe in China, India, the United States," said Gary Rieschel, managing partner at Chinese investment firm Qiming Venture Partners.

他们有数百名人力在评估中国、印度与美国的创业公司,”中国投资公司启明创投管理合伙人Gary Rieschel表示。

A lot of the money major companies invest in Chinese startups is spent on building up user numbers via promotions and marketing. In the first quarter of 2014, Tencent said marketing costs jumped 93 percent to 1.9 billion yuan, in large part because of subsidies for Didi Dache.


Investing big in a service, however, doesn't guarantee it will succeed. "It's right to question what are the limits of this," said BDA's Clark. "Not all these people can win."

不过,对一项服务的大量投资,并不保证能够成功。“对这种投资的限度提出质疑是正确的,”北京顾问公司BDA董事总经理Duncan Clark表示,“这些人不见得都能成为赢家。”


1 responses on "Alibaba, Tencent spend billions in race to be one-stop online shop"

  1. Great, yahoo took me stright here. thanks btw for post. Cheers!

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