Financial Times: China's three biggest internet giants fall into the mobile war

The FT website has published an article on the mobile rivalry between the country's three biggest internet giants, Baidu, Alibaba and Tencent, and three companies have raced to transform the inefficient components of the economy to play a huge role in the economy, but also face some practical difficulties. The following is a selection of the article: In the past few months, it was almost impossible to hit a taxi in Beijing's rush hour, as drivers turned a blind eye to the roadside's anxiously waving arms, seeking more generous gifts: smartphone users who downloaded taxi software that subsidized both taxis and passengers. The software provides a subsidy to the passengers, plus a tip for the taxi driver. Taxis have been complaining that the fares are too low, so in this case the drivers do not pick up passengers at all, unless they use their mobile phones to call the car. With these applications, users can pay some upfront fees and create a market price that the taxi industry has never seen before. The two-style taxi application has been fought with the support of two of China's biggest internet giants, and consumers and drivers have tasted the sweetness so far. Tick-tock taxis and quick cabs are spending millions of of dollars on investors. Reducing the cost of taxis is only one of the spoils of all-out war for China's three biggest internet giants. The big three could be referred to as bat, the search engine giant Baidu, Alibaba, which accounts for 80% of China's E-commerce market, and the gaming and social media giant Tencent, which is worth as much as $132 billion. Ran, founder and blogger of investment bank Ecapital Capital, argues that the competition between Tencent's backing for a taxi and the fast-running taxi Alibaba supports is the first battle in the Internet arena for World War I. As the war began for years, the Giants, among the world's top ten internet companies, have been content to peacefully develop their inherent business. But over the past six months, they have launched a fierce takeover competition in almost every accessible market. Their expansion underscores the rapid growth of China's internet market, where wealth and power pose a challenge to China's traditional economic situation. Two factors have broken the inherent calm of China's internet world. The first is that internet companies are the largest private companies in China (calculated by market capitalisation and revenues), and they hold large amounts of cash. The second factor is that the advent of mobile Internet provides them with the goal of fighting. Nearly 500 million people in China use smartphones, which cost a minimum of 50 dollars to buy a smartphone online. In the past, these companies have their own unique territory, but with the advent of mobile internet, a certain pattern is becoming more and more concentrated, the intersection of different areas is also getting bigger. This is the current line of battle. Arthur Kroeber, a market research firm Gavekal Dragonomics analyst Asser Crobert. Most new acquisitions are based on mobile thinking. Last July, Baidu spent $1.9 billion to buy 91 wireless, hoping to get more mobile users through the App store. Alibaba buys UC net with undisclosed amountThis is China's top mobile browser. Alibaba revealed last month that it planned to purchase a wholly-owned map service, the company's High German company, valued at $1.6 billion, a bid that would help Alibaba move to Baidu's mobile map application. Nine days later, Tencent announced that it would acquire 20% per cent of the public comment network. March 10, Tencent also bought in the e-commerce sector after Alibaba's 15% stake in Beijing east. Later, media reports said Tencent was considering merging its online video business with Sohu, China's third-largest video platform. Where is the biggest online travel website that Baidu shares in China? Jenna Qian, a spokesman for the web, said: "Aggregation is taking shape, and everyone wants to provide the most convenient user experience and worry that if I do not provide travel services, other companies will provide." They may be able to sit there with their virtual dominance and huge profit margins, but that's not a long-term solution, and that's why giants compete. Ecapital Capital's ran says BAT's three giants want to become ubiquitous, dabbling in every area of everyday life that can connect to the Internet and sell it to the public. BAT wants to be with you 24 hours a day, seven days a week, and they want to know you, date you, have you. He wrote. China's internet giant is becoming the alliance of technology companies (Tech Kereitsus), a Yang Sian analyst, Anne Stevenson-yang. In China, when companies grow to such a size, state ownership and private ownership are less important. For various purposes, she says, these companies have formed an internet ministry. The shift to inefficient field bat has begun to expand in some traditional sectors of the economy, with the aim of making some inefficient state-owned sectors more plausible, including the taxi industry. The biggest onslaught appears in the financial sector. Alibaba, which started its balance-management service last fall, paid a rate equivalent to several times that of state-owned banks, and in March this year said it had attracted more than 500 billion yuan (about $81 billion trillion) in deposits in 9 months. Tencent has launched a similar financial services management, Baidu also unwilling to be outdone to launch the Baidu Financial management. However, the expansion of financial services has encountered some resistance. Last week the Chinese central bank suspended the virtual credit cards launched by Alibaba and Tencent, as well as the services of mobile payments by scanning two-dimensional codes. Banks are a red line they need to cross, Duncan Clark, China's chairman of telecoms consultancy BDA, said there was little regulation in the Internet, but Duncan Clark regulation. The least efficient areas of China's economy are those companies that want the most efficient. These inefficient areas are still the dominant part of the economy, which brings opportunities. For us, our market economy has only been running for decades, and Baidu CEO Robin Li said in January this year that our traditional industry is not mature enough to encounter the internet impact. One example is retail. Jack Ma (Weibo), Alibaba chairman, recentlypoints out that unlike American shoppers who view E-commerce as a dessert for their offline stores, many Chinese consider Alibaba's cat and Taobao as a real buying platform. In China, electronic commerce is the main channel because of imperfect commercial infrastructure. He said. Mr Ma expects the company to eventually occupy 30% per cent of China's total retail consumption, now at 6%. Accumulate personal wealth so far, most of China's private wealth has been accumulated through real estate, but the internet is changing this situation. With Baidu's price rose in New York, Robin Li became China's richest man last December, and the Bloomberg index showed he had 12.2 billion of billions of dollars in personal assets. One months later, he was overtaken by Tencent founder Ma (Weibo), which has reached $13 billion under the support of Tencent's rising stock price. Alibaba's Jack Ma can also enter the top ranks, with only his company starting this year's long-awaited New York IPO, which some analysts believe can be valued at $200 billion trillion. Such a high valuation raises some concerns. Alibaba's main revenue comes from selling ads to potential businesses, and it has not posted too many messages. Yahoo, which owns 24% per cent of Alibaba, also publishes only four data quarterly, without any details: Sales, gross profit margins, operating profits and net profits. The data used to discuss Alibaba is too general and we know very little about it. One analyst said. Data from the third quarter of last year showed Tencent's QQ and microblogging active users reached 815 million and 271 million, respectively. However, China's Ministry of China Internet Information Center published the total number of Internet users in China is only 618 million. In China, the difference between private and state-owned enterprises is very large. Private companies are not free from state control, and foreign investors are struggling to exert their influence, and big companies are not entirely free of bureaucratic influence. There are two types of private enterprises in China. One is very low-level small businesses that fly under the radar's monitoring altitude. But once the company grows, it must meet political demands that it cannot survive. Ms. Yang Sian said. Every giant seems to be developing within its own territory. Tencent is located in the south of Shenzhen, Alibaba is headquartered in Hangzhou, its companies are deployed along the vicinity of Shanghai. Baidu occupies the north and is headquartered in Beijing. This reflects the overall layout of China's power, Yang Sian said. Business is a mirror of official power. She said. The big three are so big that they have a close relationship with politics and play an important role in the Chinese economy. One employee likened bat to the three superpowers in George Orwell's novel 1984, Oceania, Eurasia and East Asia, which were too big to beat but were permanently caught in war. Over the years, Alibaba has banned Baidu from crawling its website content, which is the competition in the search field. With the emergence of Tencent micro-letter, it has become Alibaba's E-commerce platform's biggest threat. NowIn Baidu Internet crawler already can crawl Alibaba website content. The other day the ocean was still fighting the Eurasian country, but the next morning the two sides formed an ally. The employee said.