Foreword

In 1998, Ma Huateng , Founded Tencent in Shenzhen.

In 1999, Ma Yun, who resigned as an English teacher, founded Alibaba in Hangzhou.

Since then, the two giants of the Chinese Internet industry began to be born. They have always fallen in love and killed each other, both in competition and cooperation.

In the more than 20 years of China’s Internet development, many famous Internet companies have lost their brilliance and lost their brilliance. For example, they used to cooperate with Tencent and Ali are also known as”BAT&34; Baidu.

However, Tencent and Ali have been advancing side by side, becoming the Gemini constellation of China’s Internet industry.

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Tencent

However, today, Ali seems to be gradually stepping into the footsteps of Baidu. It’s becoming a disadvantage in all aspects, and it’s becoming more and more difficult to fight Tencent.


Ali, who is gradually inferior

Ali and Tencent have been advancing side by side for many years. Although sometimes there is a slight gap between the two parties, it is extremely small. However, today, Ali is gradually at a disadvantage and it is becoming more and more difficult to confront Tencent.

The disadvantage is mainly reflected in the three aspects of commercial market value, competition status and negative impact.

First of all, in terms of commercial market value, Ali has become farther and farther away from Tencent.

Tencent was listed relatively early. In 2004, Tencent was listed in Hong Kong.

The second son of the richest Chinese at the time Li Ka-shing, Yingke Development Group Chairman Li Zekai holds a 20%stake in Tencent, which can be regarded as a major shareholder of Tencent

However, Li Zekai was not optimistic about Tencent and sold all of Tencent’s shares. Today, Tencent has As the veritable”king of Hong Kong stocks”, Li Zekai has long regretted not having it at the beginning.

Compared with Tencent, Ali’s listing is relatively late.

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Alibaba

September 19, 2014, founder Jack Ma ringed the bell at the New York Stock Exchange, Alibaba was officially listed, creating the largest IPO record in history, with the stock code”B ABA”.

On November 26 of the same year, Alibaba went public again in Hong Kong, with a total market value of more than 4 trillion yuan, and became the”new stock king” of Hong Kong stocks.

At that time, Ali, whose market value overpowered Tencent, ran ahead of Tencent, and had an advantage for a long time.

However, a piece of news on December 24, 2020 quickly broke this situation.

On December 24, 2020, Alibaba was filed for investigation by the state because of its”choice of two” suspected monopoly.

In a short period of time, Alibaba’s stock price plummeted immediately, and its market value evaporated more than HK$430 billion in one day. At the same time, Tencent’s stock price took advantage of the trend, and soon exceeded Alibaba’s 440 billion Hong Kong dollars.

To this day, Alibaba has not recovered its vitality, and there is a big gap between it and Tencent in terms of commercial market value. As of March 7, 2021, Alibaba’s Hong Kong stock market is worth 4.91 trillion Hong Kong dollars, and Tencent’s Hong Kong stock is worth 6.51 trillion Hong Kong dollars.

Tencent has a market value of 1.6 trillion Hong Kong dollars more than Alibaba. When converted into US dollars, it is about 206.1 billion, which is equivalent to the market value of two Baidus.

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Tencent

The gap in market capitalization between Ali and Tencent can be seen from this .

Secondly, the status quo of competition. Ali has been deeply surrounded by Tencent’s younger brothers.

Ali and Tencent have set off a war of confrontation in all aspects and fields, and they have profoundly affected China.

For example, the ride-hailing battle between Kuaidi and Didi in 2014, and the bicycles of Mobike in 2016. The battle, and the continuous takeaway battle between Meituan and Ele.me etc.

In wars in various fields, Ali often loses more and wins less, while Tencent often wins.

As Tencent’s main business is social and gaming, Ali continues to want to invade Tencent’s social and gaming hinterland.

In the social field, Alibaba has successively launched the contact, DingTalk, and Alipay circles, and also invested in Momo and Weibo. But for a long time, no product can pose a substantial threat to Tencent’s social dominance.

In the game field, Ali officially entered the game in 2016 and established Ali Games. After several years of hard work, although it has achieved the fourth position in the country, it is still far away from Tencent Games.

Therefore, Ali’s invasion of Tencent’s social and gaming hinterland has been unsuccessful.

However, Tencent’s invasion of Alibaba’s e-commerce hinterland can be regarded as quite effective.

In 2014, Tencent invested in the e-commerce giant JD; in 2015, Tencent invested in the group purchase overlord Meituan; in 2016 , Tencent has also supported e-commerce rookies Pinduoduo.

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JD

These three companies are like three evil wolves, continuing Constantly besieging Ali’s main business of e-commerce, harassing Ali this tiger. And Ali was investigated for suspected monopoly of”choosing one of two” because of competition with these three companies.

Today, Ali has been deeply surrounded by Tencent’s younger brothers; while Tencent has been safe and sound, and Ali’s attack on it has not produced a substantive threat at all.

It is difficult for Ali and Tencent to sit on an equal footing and go hand in hand.

Finally, in terms of negative effects, Ali has fallen into the whirlpool of public opinion.

First, on October 24, 2020, Jack Ma gave a fierce speech on the Bund in Shanghai, and was later criticized by the national media. Then the listing of Ant Financial, which he led, was suspended by the Shanghai Stock Exchange.

Two months later, that is, on December 24, 2020, a blockbuster news once again pushed Alibaba to the forefront. Because”choose one of two” was suspected of being a monopoly, Alibaba was National investigation.

The series of negative news has pushed Jack Ma and Alibaba into the whirlpool of public opinion, and it is difficult to extricate themselves.

People talk about Jack Ma and Ali, capitalists, monopolizing these negative vocabulary, and the online criticism of them is endless.

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Ma Yun

Many people’s perception of Ma Yun and Ali has been completely From positive to negative. The impact of this on Alibaba can be said to be serious and far-reaching.

In contrast, Tencent, in addition to the perennial abuse of its game industry, has always been stable.

Whether it’s the magic operation of Tencent accidentally hurting Lao Ganma, or the long-term dispute between WeChat and Douyin, these Negative news has not caused a major public relations disaster for Tencent, and it has always been within the controllable range.

It can be seen that Tencent’s public relations and legal teams are really not generally strong.

On the one hand, Ali is deeply affected by the negative impact and it is difficult to extricate itself; on the other hand, Tencent has been stable for a long time. The two sides are ebb and flow, and Ali is far from Tencent’s opponent.

As a result, today, Ali has gradually been inferior in the competition with Tencent, and it is difficult for it to be on an equal footing with Tencent.


Why is Ali like this

Ali, which used to go hand in hand with Tencent, is no longer a rival of Tencent. It is difficult to regain its glory.

Why did Alibaba, which used to be proud of the rivers and lakes in the past, have been weak in development and are gradually at a disadvantage? I think this can be analyzed from two aspects:Main business attributes and Investment strategy.

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Alibaba

First of all, let’s talk about the attributes of the main business, This almost determines the development direction of Tencent and Ali.

Everyone knows that Tencent’s main business is social networking and gaming. So, what are the attributes and characteristics of these two main businesses?

Tencent is China’s well-deserved social hegemon, and its QQ and WeChat have long been popular all over the country. Especially WeChat, as of 2020, its monthly active population has reached 1.2 billion.

The biggest attribute and characteristic of social networking is that it is the starting point of Internet traffic. After people use WeChat every day, they always find something to do. At this time, Tencent can guide the flow of traffic in a purposeful manner.

Therefore, Tencent has become China’s largest traffic landlord by relying on the advantages of its main social business. Traffic is readily available to it. What it needs is a wide range of monetization channels.

And Tencent’s other main business game, its biggest attribute is huge profits. Tencent diverts its own social traffic to the game, and it is easy to make a lot of money.

In addition to its own game industry, Tencent will also divert social traffic to the younger brothers it supports to accelerate their development. For example, JD.com and Pinduoduo both have first-level portals on WeChat.

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Pinduoduo

Therefore, Tencent relies on the attribute advantage of the starting point of traffic , On the one hand, it relies on its own game industry to make money, on the other hand, it directs traffic to the small brothers that it has invested in, and Tencent is also developing better and stronger.

And Ali’s main business is e-commerce, so what attributes and characteristics do e-commerce have?

Ali is the king of e-commerce in China, and its Taobao and Tmall have become the two most commonly used by Chinese Online shopping software.

The biggest attribute and characteristic of e-commerce is that it is the end point of Internet traffic. No matter how much traffic is gathered by Internet companies, the ultimate goal is to monetize, and e-commerce is a powerful channel for monetization.

Therefore, what Ali lacks is not monetization channels, but traffic from all directions. This has also led to the ultimate goal of Ali’s various investments to increase enough traffic for its own e-commerce industry.

However, in the Internet field, traffic is king. As long as there is traffic, there will be various monetization channels. Increasing traffic is obviously more difficult than realizing channels.

So the main business of e-commerce chosen by Ali is obviously more difficult than Tencent’s main business of social + games. It is normal for Ali to gradually be at a disadvantage in the long-term competition.

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Alibaba

Secondly talk about investment strategy, Tencent The investment strategy of Alibaba is more successful than that of Ali.

From Tencent’s many investment companies, we can see that Tencent adopts a win-win investment strategy.

For example, JD.com, Meituan and Pinduoduo, etc. Tencent not only invests in these companies, but also provides them with development funds. And also open up their social traffic to them to support their development.

More importantly, Tencent has never interfered in the”internal affairs” of these companies, allowing them to operate independently, and only needs to distribute dividends to them on time.

Think about it, if there is a big brother who not only gives money to others, but also does not interfere with your own strategy and decision-making, would you welcome it very much? Will your company develop better?

Because of this, most of the companies invested by Tencent have developed relatively well. Like JD.com, Meituan and Pinduoduo, they have already posed a serious threat to Ali’s main business of e-commerce.

Alibaba’s investment strategy is biased towards strong control. In most cases, Ali prefers wholly-owned acquisitions.

After many companies are acquired by Ali, Ali will replace the original founding team and send his own line of troops to manage them. Because of this, Ali can better control the company’s strategy and decision-making, allowing these companies to provide traffic for their main e-commerce businesses.

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Internet traffic

But this has great disadvantages.

One is the acquired company, which has been completely unable to develop according to the founder’s plan, and has seriously deviated from the normal development track. Whether these companies are developing well or not, in fact, Ali doesn’t care, only they need to provide a steady stream of traffic to Ali.

Secondly, Ali did this, which brought him a very bad impression and reputation in the investment industry. Many founders of unicorn companies refuse to be acquired by Ali or become shares because they do not want their entrepreneurial efforts to be ruined by Ali.

For example, Wang Xing of Meituan is a good example. Meituan was invested by Ali at first. Later, Wang Xing was dissatisfied with Ali’s approach and switched to Tencent and became Ali’s mortal enemy.

If you are the founder of a company to be acquired or acquired, I believe you will welcome and favor Tencent even more.

Therefore, the difference in investment strategies between Tencent and Ali also affects the future development of both companies to a large extent.

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Tencent

Of course, Ali is gradually lagging behind Tencent. The reason is There are many, limited by space, I won’t repeat them here. Interested friends can add it in the comment area.


Final Summary

Today, Ali is no longer glorious in the past and is gradually at a disadvantage in the competition with Tencent. This is Ali’s dilemma and a rethinking of its business model.

It is foreseeable that if Ali is unable to actively transform and change in the subsequent development, it is likely that the gap between it and Tencent will become larger and larger, and will eventually follow Baidu’s old path, and Tencent is seriously left behind.

Dear friends, what do you think about this? Everyone is welcome to express their opinions and comment actively.