China’s tech giants reach global elite with gamers, shoppers
BEIJING: Powered by Chinese smartphone users splurging billions on mobile games and online shopping, China’s technology giants Tencent and Alibaba are racing up the elite league of the world’s most valuable companies.
Hong Kong-listed Tencent, famous for its games and WeChat messaging service, became the $ 500- billion league last week, terms of market value.
Alibaba is just a few billion shy of joining its Chinese competitor at the top table of public listings, and is already there when taking
While the top five— Apple, - bet, Microsoft, Amazon and Facebook—thrive across the world, the fortunes by cornering China’s own vast market of 750 million internet users.
Tencent and Alibaba do have a major advantage over American rivals, because China severely restricts access to its internet, with
But they have also deftly tapped into smartphone technology to woo China’s large, adaptable population.
“Chinese consumers’ acceptance of new technology is faster than a managing partner at the China of
“Even my grandpa, who is 88 years old, uses WeChat and WeChat
Tencent boasts nearly 1 billion monthly active users of WeChat, combination of instant messaging, social media, mobile payment options, games and publishing.
Half of WeChat users spend more than 90 minutes a day on the app.
In smartphone games alone, the company’s revenues surged by 84 percent in the third quarter, driven by the success of the “Honour of
Alibaba, meanwhile, has dominated the e-commerce market, to its shopping platforms to buy everything from laundry detergent to Boeing 747s.
The firm created an annual sales promotion held during - sumers spending a record $25 billion on November 11, representing a 40-percent increase from last year.
Electronic cash
Both companies have benefited from China’s rapid smartphone adoption, with cheap phones
“This is basically a story of the Prashantham, an associate profes- sor at China Europe International Business School, of the tech giants’ growth.
“This country leapfrogged [from] the [ personal computer] stage straight onto the smartphone
Today, there are more than 1 billion smartphones running in China, according to iResearch. Both Tencent and Alibaba earn most of their revenue from mobile.
They have also developed mobile payment applications—WePay and Alipay—that are driving hundreds of millions of Chinese to pay for everything from groceries and eating out to water bills.
People simply aim their smart similar to a barcode, and click.
For merchants, the transaction fees cost just a fraction of swiping a credit card in most countries, and can be completed on the go.
This has also unlocked new business models, like for companies that offer sharing services, which now range from bikes to basketballs.
No ads, no business
Although Alibaba and Tencent have grown in a protected corner of the internet, they have developed unique ways to rake in cash.
While Amazon takes a cut from the sale of goods like traditional retail, Alibaba takes a different approach.
The company earns most of its money from charging merchants to advertise on its Tmall and Taobao platforms.
“If you don’t buy ads, you won’t owner of the Sweet Lisa Flagship Store, which sells women’s dresses, rompers, and skirts on Alibaba’s Tmall store.
Liu frequently buys those keywords on Alibaba’s platform, paying anywhere from eight to 18 cents when shoppers click into his online store.
Unlike Facebook, Tencent earns most of its money from selling virtual items to its millions of users, rather than selling their eyeballs to advertisers.
WeChat users pay for emoticons they send to friends; players of its slash-and-burn hit game “Honor their characters for 30 yuan ($5) and above.
Recently, Tencent has begun to sell some advertising, and analysts believe this could be its next big growth driver.
The world beyond China also offers opportunity, though neither Tencent or Alibaba can yet challenge their American rivals on the global stage. Should US tech giants fret? “But they should be alert that Chinese companies are coming up with new business models that