BATX designates, facing GAFAM (Google, Amazon, Facebook, Apple, Microsoft), the giants of the Chinese Web in 2010: Baidu, Alibaba, Tencent and Xiaomi.
They are hegemonic in Asia and particularly in China, where GAFAM are almost absent because of the different expectations of Chinese consumers and the framing of the digital economy by the Chinese authorities1.
To them 4, their market capitalization equals $ 1,132 billion compared to $ 3,438 billion for GAFAM.
Baidu, Alibaba, Tencent and Xiaomi : These incredible Chinese « GAFA » , June 17, 2016 « BATX : the four giants of the Chinese web.
Are these four firms really the mirror of GAFAM (Google, Amazon, Facebook, Apple, Microsoft) which has become impossible, in the West at least, to happen, whether to seek information on the Internet (Google, Bing , Yahoo), make online purchases (Amazon) or just turn on your computer (Apple, Microsoft)? Is their power comparable to US firms in terms of value and global reach? How to explain their rapid emergence? Are these real global multinational companies or do they reflect a Chinese nationality more or less assumed?
Firms with the appearance of copying US firms
The Chinese firms were created about twenty years after the American companies (Apple was born in 1976) which could serve as a model for them.
Baidu (« 100 degrees » in Chinese), headquartered in Beijing and the motto is To make the complex world simpler, was created in 2000 by Yanhong Li (also called Robin Li). During Google, it is the search engine in Mandarin most used in mainland China. The fourth most visited website in the world, according to Alexa Ranking, behind Facebook, Youtube and Google, it offers music, movies, an online encyclopedia (Baidu Baike) based on the Wikipedia model, as well as storage and video solutions. online payment. Baidu recently received (spring 2018) the authorization to carry out autonomous car tests (Baidu Apollo project) and, like Alibaba and Taicent, invests in the field of public health (scanners analysis …).
Alibaba, headquartered in Hangzhou, was established in 1999 by Jack Ma and Peng Lei. Its main activities are wholesale and retail sales to individuals (Taobao.com, Tmall.com) and businesses in China and abroad. The company also has interests, through equity investments, at Haier (household appliances), in cinema and TV series (ChinaVision), the press (South China Morning Press, Hong Kong) … and more recently in tourism.
Tencent (« galloping message »), headquartered in Shenzen, was established in 1998 by Ma Huateng and Zhang Zhidong. In the social media market, he offers instant messaging (QQ) services for computers and mobiles, interactive television (ITQQ), online games … His most famous product is WeChat.
Xiaomi (« millet ») is an electronics and computer company (slogan: Just for fans) created in 2010 by Lei Jun, headquartered in Beijing. It is mainly specialized in mobile telephony (5th mobile manufacturer) with the ambition to become the Apple of the Asian continent. It produces smartphones, tablets, connected bracelets … but also boxes, smart TVs, headphones and wireless headsets.
The Chinese digital sector has benefited from a strategy that has proved successful since the opening of China. Indeed, as in other sectors, these companies have benefited from the joint venture and technology transfer system of Western companies. They are also a reflection of China’s intellectual turpitude in the field of intellectual property: Alibaba’s platform is often criticized for the sale of counterfeits, and in 2016 the U.S. Office of the Trade Representative has put its Taobao site on its blacklist of sites notoriously suspected of practicing counterfeiting. Its subsidiary AliExpress, which refuses to reimburse customers whose purchases were seized by customs, has for this reason been the subject of hundreds of class actions in the United States. Similarly, many of Tencent’s software and services, which the founder was able to say « copy is not bad, » are remarkably similar to those of its competitors. These companies also took advantage of the various restrictive protectionist and / or political measures taken by the Chinese authorities. Especially strong in the sensitive area of communication, they systematically penalized GAFAM … As an example, if eBay had to leave the country in 2006 under the pressure of the government for relocating its servers in the United States, it is ie out of the control of the Chinese state, Facebook is banned since 2009 accused of facilitating the organization of interethnic riots in Xinjiang that had caused the death of nearly 200 people and 1700 wounded. Google, meanwhile, had to suspend its activities in 2010 to avoid censorship authorities. After reintroducing his instant Translate translation application in 2017, he is currently negotiating his return with Beijing on features deemed non-sensitive by Beijing. Apple itself, yet a major employer in the country (a large part of the iPhones is manufactured and assembled in China by its subcontractor Foxconn and the firm realizes 10% of its turnover in China), was forced to ‘go through the desiderata of the authorities: in 2017, the company had to withdraw from the Chinese Apple Store several hundred VPN which allowed to circumvent the control of Internet by the authorities of Beijing and the function of call proposed on the latest generation of its connected watches – which is their main attraction – has also been blocked. Finally, in February 2018, Apple had to allow the Chinese state to access the personal data stored on iCloud. It is however true that the Chinese companies are not spared by the political control of the Chinese authorities: Baidu Japan (Baidu.jp), launched in 2007 and intended for the latter, is censored in mainland China because (officially) of the lack of filtering of responses concerning Japanese pornographic sites. Similarly, in the context of censorship of the Chinese Internet, symbolized by the Great Digital Wall, three hundred Web players had to regroup into a federation to support the « central values of socialism ». Robin Li (Baidu), Jack Ma (Alibaba), Pony Ma (Tencent) are vice-presidents … Alibaba has finally been approached, along with half a dozen other Chinese companies, in the Behavioral Scoring project, whose implementation place is expected by 2020.
… but also because of the size of the Chinese market and an anticipatory economic policy
BATX also enjoyed rapid growth due to the attractive price of their products and the size of the Chinese market: Alibaba has 420 million customers in China, or 80% of the country’s e-commerce, and the mobile application of Baidu is used by more than 85% of Chinese Internet users (China is now the 1st country for the Internet with 800 million users). The rise of these companies is also due to the technological leaps of this country in many sectors, and was recently amplified by the Internet Plus 2015 plan: payments are passed directly from cash to dematerialized payments with WeChat Pay or AliPay by neglecting the step of the bank card; the smartphone has replaced the PC as the first Internet access equipment; e-commerce is growing faster than off-line distribution chains in most sectors; Retail off-line is now progressing in addition to online, at the initiative of major players such as Alibaba, with the aim of « strengthening the customer experience ». This rapid growth is also due to the fact that BATX relies mainly on a long-term vision of their mission, the construction of a complete economic ecosystem, the collection and processing of customer data with the proliferation of data centers and data centers. accelerated internationalization.
Today, a leading financial power, alliances with large Western firms, significant diversification
Even if their financial strength in terms of capitalization or turnover is not comparable to that of their American rivals (see the BATXT vs. GAFAM match), these companies, which rely on the strong communities of the Chinese diaspora that they animate permanently through their social networks and their own platforms (forum, blog, etc.), could quickly internationalize and conclude agreements with Western companies. Today, almost all of them are listed on the New York Stock Exchange, the New York Stock Exchange for Alibaba, NASDAQ for Tencent (which is incorporated in the Cayman Islands) and Baidu, while Xiaomi has entered the stock market. Hong Kong Stock Exchange in July 2018. Almost all of them also have a significant international activity, including Baidu, which remains focused on China, has recently moved closer to Xiomi and has forged a very close partnership relationship with Microsoft since 2011. for the use of the search engine Bing for searches done in English on his site. Alibaba is present in Hong Kong, India, Japan, Korea, Taiwan, the United Kingdom, the United States in sectors that go beyond the mail order business: data centers and various services … In France for example, its tourist reservation platform (2.3 million Chinese visitors in France) is a partner of SNCF, Air France or Accor and its payment tool Alipay is present in department stores … Finally, in July 2018 Alibaba and the Bolloré Group announced a « global partnership » to « develop joint projects » and « explore new business opportunities ». Xiaomi’s products, including electric scooters or drones, are marketed (in the Mi Stores) in Singapore, Malaysia, the Philippines, India, Indonesia, Brazil, Africa (South Africa, Nigeria). and Kenya) as well as in the United States and Europe (France, Germany, United Kingdom, Poland, Slovakia …) where currently, because of American protectionism, the group is conducting an aggressive policy on the platforms of e- trade like GearBest. Tencent has finally established an alliance with Spotify through a cross-ownership and has bought gaming companies: the American company Epic Games (Unreal Tounament, Fortnite) or the Finnish Supercell (Clash of Clans, Clash Royal ). He has also signed an agreement with J.J. Abrams (director of the last Star Wars) to create the company Bad Robot Games. However, there is resistance to this expansion: US regulators have recently blocked Alibaba’s attempt to acquire MoneyGram by invoking national security … And, as a result of ZTE and Huawei, China Mobile has been banned by US administration in July 2018 entry into the US mobile market for the same reasons. The BATX are not currently able to compete with GAFAM but could get closer quickly because of their progress in the field of AI: today, half of the start-up sector are Chinese … despite a financing system that would fail. Likewise, after securing their domestic market, on which new modes of consumption are developing, the BATXs are increasing their internationalization by targeting South-East Asia as well as South Africa or Brazil. They can only benefit from the important efforts made by China in the field of artificial intelligence: announcement of a tri-annual plan 2018-2021, development project of the Mentougou area in the Beijing district which should gather more than 400 50 hectares, a desire to become the leader of the sector in 2030. Ultimately, beyond the economic interests and its role in social control, this sector whose BATX locomotives openly symbolizes the desire to China to prove the superiority of its economic and social model. To the extent that artificial intelligence is becoming a national security issue in a battle that is just beginning, and which, according to Elon Musk, will require safeguards, the games are not made to the extent that it will be necessary to reckon with the United States. On the whole, however, if the race seems well launched globally between BATX and GAFAM, it is to the detriment of Europe, which seems to be out of the race in this numerical confrontation because of the absence of representatives of weight in this domain.