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All the Western companies you’d have to combine to get something like Alibaba

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Re: All the Western companies you’d have to combine to get something like Alibaba

#61

Post by instoftech »

seanmcdirmid wrote: post #57
cromwellian wrote: post #22

Earlier quoted context omitted.

It's not exactly purely an aspect of Western companies ignoring China or localizing property for China that is the culprit here. The Chinese government also makes it difficult, especially in the realm of internet services, for Western companies to play. I know plenty of American technologists who are well aware of Chinese internet properties, how could they not, when disproportionately many American technologists are…

Gmail technically isn't blocked in China, the GFW just messes with it sometime. Otherwise your comment is spot on: American companies don't compete in China not because they don't want to, but because they can't.

Government regulation is one reason. But there are many other reasons (some are arguably more important), one of which being localization.

Check out other Asian markets (South Korea, Japan, Russia) and you may notice something interesting: many western companies failed to excel there too, even though there are no strict regulations.

eBay was not affected by GFW when they competed with Alibaba's Taobao marketplace a few years ago in China. eBay failed due to their own strategic mistakes.

Re: All the Western companies you’d have to combine to get something like Alibaba

#62

Post by fspeech »

cromwellian wrote: post #22
jfasi wrote: post #5

I love this article. Despite the multitudes of news sources telling us about how commerce is now global and business is no longer tied to a place and the internet is changing the world, there is still an ocean of enterprises of which we US-based-or-english-speaking technologists are ignorant. Take a moment to think about this: Alibaba is a huge company, growing in an absolutely enormous market, providing a pile of se…

It's not exactly purely an aspect of Western companies ignoring China or localizing property for China that is the culprit here. The Chinese government also makes it difficult, especially in the realm of internet services, for Western companies to play. I know plenty of American technologists who are well aware of Chinese internet properties, how could they not, when disproportionately many American technologists are…

"The Chinese government also makes it difficult ..."

The biggest internet companies like Alibaba, Tencent, Baidu are mostly foreign owned and initially funded by foreign venture capital. The real difference is that they are operated by Chinese nationals who don't have a Western headquarter to report to. McDonalds, KFC, Starbucks etc., on the other hand, succeeded probably because they didn't have to face a fast evolving market and could adapt their business models to China at their own pace.

Re: All the Western companies you’d have to combine to get something like Alibaba

#63

Post by seanmcdirmid »

instoftech wrote: post #61
seanmcdirmid wrote: post #57

Earlier quoted context omitted.

Gmail technically isn't blocked in China, the GFW just messes with it sometime. Otherwise your comment is spot on: American companies don't compete in China not because they don't want to, but because they can't.

Government regulation is one reason. But there are many other reasons (some are arguably more important), one of which being localization. Check out other Asian markets (South Korea, Japan, Russia) and you may notice something interesting: many western companies failed to excel there too, even though there are no strict regulations. eBay was not affected by GFW when they competed with Alibaba's Taobao marketplace a f…

The biggest reason is that China is not a country ruled by fair application of law. To win in China, you have to be willing to bend the law as much as possible without getting slapped (or at least, just slapped on the wrists). American companies can't execute like that: if fuzzy application of Chinese law doesn't get them (either by getting slapped, or having to follow laws that their competitors don't have to), the American government anti-corruption laws will (it is illegal for American companies to participate in any bribery...we aren't even allowed to take Chinese or grad students professors out to lunch!).

Facebook has done very well in South Korea and Japan. Russia is similar to China in the "rule of law" category.

Re: All the Western companies you’d have to combine to get something like Alibaba

#64

Post by onewaystreet »

fspeech wrote: post #62
cromwellian wrote: post #22

Earlier quoted context omitted.

It's not exactly purely an aspect of Western companies ignoring China or localizing property for China that is the culprit here. The Chinese government also makes it difficult, especially in the realm of internet services, for Western companies to play. I know plenty of American technologists who are well aware of Chinese internet properties, how could they not, when disproportionately many American technologists are…

"The Chinese government also makes it difficult ..." The biggest internet companies like Alibaba, Tencent, Baidu are mostly foreign owned and initially funded by foreign venture capital. The real difference is that they are operated by Chinese nationals who don't have a Western headquarter to report to. McDonalds, KFC, Starbucks etc., on the other hand, succeeded probably because they didn't have to face a fast evolv…

Alibaba, Tencent, Baidu were all founded by Chinese and are based in China. The Chinese government welcomes foreign investment as long as ownership remains Chinese. KFC, McDonalds and Starbucks have succeeded because the majority of their managers, owners and workers are Chinese.

Re: All the Western companies you’d have to combine to get something like Alibaba

#65

Post by guelo »

justincormack wrote: post #18

Pity its not Alibaba that is for sale in the "IPO" then, just a Cayman Islands company which holds a "profit participation" right which may or may not be legal in China. The article also points out that much of Alibaba is not actually owned by the company but by Jack Ma personally, so no participation in that.

The stock market functions almost independently of what a share "owns". It's just a big casino.

Re: All the Western companies you’d have to combine to get something like Alibaba

#66

Post by xiaq »

> Alibaba, which filed for its IPO on May 6, isn’t just the “Amazon of China”—it’s also the Dropbox, PayPal, Uber, Hulu, ING Direct, and more.

Hulu is a Chinese company.

Edit:

I was mistaken by the fact that it has a Chinese name and a pretty big Chinese subdivision... Hulu is an American company. facepalm

Re: All the Western companies you’d have to combine to get something like Alibaba

#67

Post by fspeech »

onewaystreet wrote: post #64
fspeech wrote: post #62

Earlier quoted context omitted.

"The Chinese government also makes it difficult ..." The biggest internet companies like Alibaba, Tencent, Baidu are mostly foreign owned and initially funded by foreign venture capital. The real difference is that they are operated by Chinese nationals who don't have a Western headquarter to report to. McDonalds, KFC, Starbucks etc., on the other hand, succeeded probably because they didn't have to face a fast evolv…

Alibaba, Tencent, Baidu were all founded by Chinese and are based in China. The Chinese government welcomes foreign investment as long as ownership remains Chinese. KFC, McDonalds and Starbucks have succeeded because the majority of their managers, owners and workers are Chinese.

Alibaba was at one time 40% owned by Yahoo and close to 40% by Softbank, with significant stakes by investors like Silver Lake and Digital Sky. Tencent was 46% owned by South African Naspers, which still owns 34%. Baidu was funded by Silicon Valley venture capital. Google actually contributed $5 million to Baidu's third round and offered to buy the whole for $1.6B (and allegedly could have cinched the deal if they had offered $2B).

Google China was led by a Chinese American academic from Taiwan (though well liked by the Chinese) and staffed with managers recruited from Google's Chinese American employees, who had cushy US jobs to go back to and did not want to lose career opportunities in the US. The managers of their local competitors didn't have such luxuries.

Re: All the Western companies you’d have to combine to get something like Alibaba

#68

Post by outside1234 »

guelo wrote: post #65
justincormack wrote: post #18

Pity its not Alibaba that is for sale in the "IPO" then, just a Cayman Islands company which holds a "profit participation" right which may or may not be legal in China. The article also points out that much of Alibaba is not actually owned by the company but by Jack Ma personally, so no participation in that.

The stock market functions almost independently of what a share "owns". It's just a big casino.

In the short term it does, the long term? Not so much.

Re: All the Western companies you’d have to combine to get something like Alibaba

#69

Post by [deleted] »

dengnan wrote: post #21
notatoad wrote: post #10

online payments ---- google wallet cloud services ---- google cloud platform mobile apps ---- google play mobile OS ---- android maps and nav ---- google maps physical retail ---- ? no google product shopping deals ---- google offers cloud storage ---- google drive instant messaging ---- google hangouts car service ---- uber (via google ventures) c2c ecommerce ---- ? no google product travel booking ---- google fligh…

It's also about the scale. Most of their services are top competitors in the market. For example, Alipay, or 支付宝, is the de facto online payment service in China. As far as I know, I cannot imagine another company which provides similar service in China. Part of the reason is the government regulation.

[deleted]

Re: All the Western companies you’d have to combine to get something like Alibaba

#70

Post by nichtich »

prawks wrote: post #28
dengnan wrote: post #21

Earlier quoted context omitted.

It's also about the scale. Most of their services are top competitors in the market. For example, Alipay, or 支付宝, is the de facto online payment service in China. As far as I know, I cannot imagine another company which provides similar service in China. Part of the reason is the government regulation.

The thing I wonder about their status as a top competitor: how different would their status be in a less restrictive market? How does Alipay's user experience compare to Paypal's? Is it the lack of competition that has enabled them to expand their reach so widely (by not having to focus so much effort on each venture)? For example, the experience of shopping on AliExpress is (imo) sub-par when compared to most Wester…

My experience: using paypal is so confusing for me, compared to alipay. And ebay makes you uncomfortable and doubting your purchase decision more than taobao.

I think it partially explains Alibaba's success in China. how you do shopping and paying is very much dependent on the "tradition" and regulation environment, and a local company can optimize that better than a global one.

Aliexpress is a mess though, i agree with that. But I think the language barrier faced by the shop owners there may be the biggest problem.

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