Alibaba & Tencent: China’s Digital Disruptors (Part 1)

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Both Alibaba and Tencent have created formidable Internet ecosystems within China. However, the increasingly competitive Chinese economy is now slowing, and their continued growth depends on weakening the control of Google, Facebook and Amazon over the global digital commerce market. In the first of two reports on China, we examine Alibaba and Tencent’s services, business models, and aspirations, and explain how and why telcos should support their international expansion.

Description

Format: PDF filePages: 44 pagesCharts: 20Author: STL research teamPublication Date: August 2015

Table of Contents

  • Introduction
  • Executive Summary
  • Sizing up China’s disruptors
  • Alibaba – digital commerce behemoth
  • Why Alibaba is important
  • Alibaba’s business models
  • Likely impact outside China
  • Threats facing Alibaba
  • Tencent – a playbook for Facebook?
  • Why Tencent is important
  • Tencent’s business models
  • Tencent’s likely impact outside China
  • Threats to Tencent
  • Conclusions and implications for telcos
  • Alibaba and Tencent are very strong companies…
  • … but they both need strategic partners
  • Implications for telcos
  • STL Partners and Telco 2.0: Change the Game

Table of Figures

  • Figure 1: China is home to four of the world’s most valuable publicly-listed Internet companies
  • Figure 2: Alibaba’s six major digital marketplaces
  • Figure 3: Alibaba has seen heady growth this decade
  • Figure 4: One of Alibaba’s recent investments was in MomentCam
  • Figure 5: Alipay helps Chinese consumers buy from overseas merchants
  • Figure 6: AliExpress sells a wide range of Chinese goods to the world
  • Figure 7: Alibaba’s UC Browser is widely used on Android smartphones
  • Figure 8: Comparing Alibaba and Amazon R&D over time
  • Figure 9: Alibaba’s mobile sales are rising rapidly
  • Figure 10: Almost half of Alibaba’s revenues are now generated by mobile services
  • Figure 11: Alibaba’s overall monetisation rate is slipping
  • Figure 12: Tencent runs three of the top five OTT communications services
  • Figure 13: Tencent claims leadership in digital content in China
  • Figure 14: Tencent sometimes leads Facebook
  • Figure 15: Tencent’s investment and partnership strategy
  • Figure 16: Tencent’s five years of fast growth
  • Figure 17: Tencent remains heavily reliant on online gaming revenues
  • Figure 18: Some of the use cases targeted by Tencent’s online payment portfolio
  • Figure 19: Tencent’s Red Envelope promotion was hugely successful
  • Figure 20: Both Alibaba and Tencent have seen strong growth in net income

Technologies and industry terms referenced include: APIs, big data, business models, digital commerce, Internet of Things, LBS, localised commerce, location based services, mobile advertising, mobile commerce, mobile marketing, mobile payments, Mobile wallets, Personal Data, smart homes, smartphones, SoLoMo, Strategy, telco strategy, Telecom