Alibaba v. Tencent: The Battle for Supremacy in China

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    Jack Ma once got rejected for an entry level job at KFC. He grew up poor but taught himself English by giving tours of his hometown of Hangzhou to foreign tourists. He started Alibaba with 500,000 yuan ($77,000). He’s bold, brash and loves the limelight.

    Pony Ma (no relation) is China’s richest man, with the company he founded in college, Tencent, considered Asia’s wealthiest. He’s quiet, studious, almost reclusive and prefers to remain in the background as much as possible.

    The companies these men founded – Alibaba and Tencent, are now locked in a battle – not unlike that of Amazon vs. Walmart here in the West –  for digital supremacy in the East, and it’s a fascinating one to watch:

    Alibaba v. Tencent: The Battle for Supremacy in China
    FORTUNE
    By Adam Lashinsky

    THERE’S SOMETHING IRRESISTIBLE about a clash of titans. The fate of the world hung in the balance during the Cold War standoff between the U.S. and the U.S.S.R. Coke vs. Pepsi once mattered mightily. Ali-Foreman defined a pugilistic era. And then there’s the celebrity spat pitting Taylor Swift against Kanye West. (Look what he made her do.)

    For sheer global commercial stakes, however, these epic clashes have nothing on the battle between the two heavyweights of the Chinese Internet industry, Alibaba and Tencent. Both have market capitalizations that hover around half a trillion U.S. dollars. Both command sectors of the rapidly growing Chinese digital landscape: Tencent owns the leading gaming and messaging platform, while Alibaba rules e-commerce. Both are aggressive investors inside and outside China. Each is the pride of their not-quite-first-tier hometowns: Alibaba of the ancient city of Hangzhou near Shanghai and Tencent of shiny-new Shenzhen across the border from Hong Kong. Finally, both touch an astounding percentage of the world’s most populous country: Alibaba’s various online marketplaces count 552 million active customers; Tencent’s WeChat messaging service recently surpassed 1 billion accounts.

    For all these similarities, Tencent and Alibaba are sharply distinct companies, as different in culture, style, and approach as Apple is from Google. The duo sprang from the same era, the late 1990s when China was discovering the Internet, and for years they built giant businesses more or less out of each other’s way. Yet as they’ve grown, each inevitably has begun to encroach on the other’s turf. Tencent, for instance, is investing in retail and financial services, sectors that are Alibaba’s strength. Alibaba, in turn, sees an opening in Tencent’s domain, particularly by offering mobile-messaging tools to its vast network of small-business partners. Read More

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