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

http://qz.com/206283/all-the-western-companies-youd-have-to-combine-to-get-something-like-alibaba/?source=HackerNews&referrer=Anuj+Adhiya

by ASquare • 12 years ago

187 102 12 years ago

qz.com

xSwag• 12 years ago

So who's buying the IPO? Seems much better investment than SV companies with little or no profit.

I wonder how it will affect YHOO -- Probably worth buying Jan 2015 $40 calls since Yahoo owns 24% stake, maybe even short AMZN on day of IPO.

kevin818• 12 years ago

I was thinking the same thing. Is it even possible to buy anything on the first day? I was under the impression it's hard to buy because it's typically reserved for the big spenders.

adventured2• 12 years ago

If you didn't catch Amazon short at, say, $390+ when it was obviously really crazy, why would you bother after they've already plunged? Don't bother at this point, it's down 30%, most of the gains are over on the Amazon short ride. There are still other excellent short candidates given the market is near an all time high.

nerdo• 12 years ago

Ok now do Craigslist.

suyash• 12 years ago

Nice, so many companies trying to chop up Craigslist into pieces.

meritt• 12 years ago

Amazing how big of a company they are. This list is missing http://www.1688.com/ and http://www.alibaba.com/ which are B2B wholesaling.

jfasi• 12 years ago

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 services, and most American technologists know nothing about it. Expand this thinking to countries: there are markets that are only just beginning to enjoy the degree of technological luxury the US and Europe enjoys. Who will serve them? These are people just like us, they have needs and desires much like ours. Who will satisfy them?

If you're an entrepreneur, there are millions if not billions of people who are on the cusp of becoming your target market, and the dominant technological discourse and journalistic coverage gives you no insight into the market they occupy. Not the languages they speak, not the companies who would be your competitors, not the cultural differences that would make selling difficult. Nothing.

I hope this article opens peoples' eyes to the fact that the US-based-or-english-speaking countries are soon going to be a relatively small portion of the world. We need news sources like this to practice the globalization sermon they all preach.

higherpurpose• 12 years ago

Yes, most Silicon Valley start-ups still seem very Silicon Valley/United States/Apple centric. That has worked well for them in the past, but now the opportunities are a lot bigger than just that market or target type of devices.

jerf• 12 years ago

I'd suggest that the problem is that trying to serve a market 10,000 miles away simply doesn't work. Had the same people who started Alibaba stayed where they were but tried to build a US-centric company instead, I'm sure that we would not be talking about them now. You need to bootstrap from what you know.

In fact, there's no guarantee this US expansion is going to work either.

I'd also observe that people would often interpret a Silicon Valley company trying to build a solution for some other culture as arrogant, parochial, or both, so there's really no winning here.

e_modad• 12 years ago

I wasn't born in the United States but my experience has been that Americans - in particular our colleagues involved in the sciences/technology are not only aware of what's going on, but interested in what's going on globally. I find it ironic that you're criticizing Western technologists on an US-based, tech centric website, where this post and your comment were up-voted to the top. If anything, this hints that your comment may be incorrect. In my experience, American technologists are one of the most diverse fields (both in and out of academia) I've ever been a part of.

I disagree with your characterization of the way US-based 'technologists' view the world. In my experience, almost every single technologist I've come into contact with is much much more well versed in what's going on globally.

Also, I have to take issue with your exaggeration here. You're making a generalization. I know about Alibaba, of course. Most people I know also know about Alibaba. So don't say we "know nothing about it." This article was posted and voted to the top of the list on an English based website where the majority of the visitors are working in Western countries.

Your comment seems to make some assumptions that I don't understand. When you say "Who will serve them? These are people just like us, they have needs and desires much like ours." Who is saying anything different? You seem angry with a group of people but it's generally not technologists that have the viewpoint you're addressing.

As someone who wasn't born in this country and has found nothing but respect and openness from my technical colleagues, I have to say I'm pretty confused as to what you're referring to. It's certainly not the majority of North American/European technologists I've talked to.

cantankerous• 12 years ago

"Who will serve them? These are people just like us, they have needs and desires much like ours."

And they will be served by people just like us, technologists.

cromwellian2• 12 years ago

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 of Asian descent, but many of them have made the decision that it is preferable to run your startup in the relative unfettered chaos of Silicon Valley than to navigate the maze and minefield of considerations of running an internet service in China.

I'm pretty sure Google would love to have another billion Gmail users or Google search users, or to have Google Play store available (for paid apps) in China. Do you think the fact that these services are blocked are because of ignorance?

seanmcdirmid10• 12 years ago

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.

fspeech14• 12 years ago

"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.

nashadelic• 12 years ago

there are millions if not billions of people who are on the cusp of becoming your target market

My favorite quote in this regard is by William Gibson: "The future is already here — it's just not very evenly distributed"

soAsian• 12 years ago

I hope this article opens peoples' eyes to the fact that the US-based-or-english-speaking countries are soon going to be a relatively small portion of the world. We need news sources like this to practice the globalization sermon they all preach.

LOL. I don't get how your comment is at the top. People in technology field know about it.

Your question should be how China is blocking out other tech companies unless they are willing to share their user info or join a state-owned venture so they can learn your technology, process and know-how then push you out. You make it sound like no one from U.S. want China or other market.

The FACT TO THE MATTER is how other countries is either making it extremely difficult for U.S. tech company to enter or corrupted to hell that you have to pay out of your ass in each and every step of the way to do business with them.

This comment is the most retarded comment there is. PEOPLE IN TECH KNOW WHAT'S GOING ON!

jiaweihli• 12 years ago

Despite this poster's argumentative tone, they speak the truth. The tech scene in China is pretty limited due to tremendous government influence / interference. Heck, step 1 of setting up a foreign company in China is to bribe local authorities to poke a hole in the Great Firewall so it stops throttling your new office's VPNs.

tokenadult• 12 years ago

Your comment could be shortened to

and better fit the Hacker News guidelines, which strongly discourage personal insults and uncivil tone. P.S. In English, which is perhaps not your native language (in which case, welcome aboard, because we indeed need more participation here from outside the English-speaking world), the usual idiom is "the fact of the matter" rather than "the fact to the matter." And on Hacker News, we rarely use chat-speak abbreviations like "LOL" (I learned that years ago when one of my comments that used abbreviation was downvoted heavily, even though I was literally laughing out loud as I typed the comment) and we only rarely write in all-capitals for emphasis. But your point is well taken.

chimeracoder• 12 years ago

I hope this article opens peoples' eyes to the fact that the US-based-or-english-speaking countries are soon going to be a relatively small portion of the world. We need news sources like this to practice the globalization sermon they all preach.

Agreed. It's not just in the tech sector, and not just in the commerce sector either. The US (and many English-speaking countries) tend to be incredibly US-centric and euro-centric in their worldview and news coverage.

For example, right now, the world's largest democracy is holding the largest democratic election in the history of human civilization[0]. In the US, you'd be hard-pressed to find people who even know the names of the candidates[1]. Most people I talk to aren't even aware that it's happening - which is delightfully ironic for a country that has a history of proselytizing the gospel of democracy by using its military to install "democratic" governments abroad[2]!

[0] For those interested in reading up: https://en.wikipedia.org/wiki/Indian_general_election,_2014

[1] Sort of a trick question in parliamentary systems (as opposed to the presidential system in the US), but my statement applies whether you ask about the names of the two major parties or the names of their leaders.

[2] Iraq is the example that most people are familiar with, though this tradition goes back a century or more.

notahacker2• 12 years ago

To be fair, most Indians - including highly educated middle class Indians - probably don't have a clue about which parties several hundred million Europeans are about to cast their votes for later this month[1], or who's winning the South African election right now.

[1]neither do several hundred million Europeans

eshvk• 12 years ago

The US (and many English-speaking countries) tend to be incredibly US-centric and euro-centric in their worldview and news coverage. For example, right now, the world's largest democracy is holding the largest democratic election in the history of human civilization[0].

I find this attitude very weird. Every time I encounter it in the real world, it comes off as a humble brag. As in, oh the rest of the west is so ignorant and dumb, me? I know all about your culture.

From my experience, huge demographics of people around the world don't really care about what happens outside their tribes. On the other hand, no one goes around chiding say Indian villagers on why they are not more aware of the complex inter-dynamics of the current Russian-European conflict. Somehow expecting everyone to be aware of your favorite world topic appears to be the same equivalent of assuming that everyone that writes code be well versed in whatever stack you are familiar in.

onewaystreet2• 12 years ago

Ignorance isn't the problem. The problem is the Chinese government. The current reality of doing business in China: If you aren't Chinese, don't bother.

bobbles• 12 years ago

Who will satisfy them?

From the sounds of it, Alibaba has it covered

jonnathanson• 12 years ago

"If you're an entrepreneur, there are millions if not billions of people who are on the cusp of becoming your target market..."

US entrepreneurs have a shot, but they'll be a day late and a dollar short in many of the more developed international markets right now. Especially in Asia, where local equivalents to all of these majors services have been around for about as long as Alibaba has. Not every market is as dominated by a handful of major tech giants as China's (Alibaba, Tencent, etc.). But most markets with widespread internet coverage and smartphone usage have their domestic megaplayers.

That's not to say these markets can't be penetrated. But we should realize that the world hasn't exactly held its breath waiting for our tech's arrival. It's been busy.

I agree that the US media haven't done much to cover these markets. But a lot of people who've done business overseas, particularly in mobile, have experienced them. American entrepreneurs have had the luxury to focus exclusively (or at least predominantly) on the American market for decades, because it's a huge and affluent market. But I agree; there are enormous opportunities abroad. Not many of them are blue oceans anymore, though.

One enormous challenge with developing technologies for truly global audiences is that the infrastructure, culture, and socioeconomic reality of most countries varies enormously. There isn't a homogeneous global consumer base, so much as a global consumer base fragmented by local idiosyncrasies. Navigating these is tricky, but worthwhile.

michaelrbock• 12 years ago

This is a great point. One example of a company doing this is Rocket Internet (http://www.rocket-internet.de/), a Germany-based "internet accelerator" that brings tech companies and services to developing/underserved markets. Some of their properties include foodpanda (http://www.foodpanda.com/, Grubhub/Seamless for SE Asia, the Middle East, Eastern Europe, Africa, and Latin America), easyTaxi (http://www.easytaxi.com/, the world's largest taxi booking app), Lazada (http://www.lazada.com/, Amazon for Indonesia and SE Asia).

They've raised over $4b and created over 20,000 jobs since they started in 2007. Pretty ingenious.

komrade• 12 years ago

Yandex, on a smaller scale, can get you a similar list of its services.

bnycum• 12 years ago

While the article was interesting, as I didn't know much about Alibaba to begin with, the site could use some design work. I didn't realize I was onto the next article with some type of ad in-between. Nothing was making sense till I got to the kidnapped girls of Nigeria article and realized what was happening.

jibster2• 12 years ago

For some reason this article seems flawed, am I crazy or does Google already do most of this stuff?

notatoad2• 12 years ago

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 flights

b2c ecommerce ---- ? no google product

e-learning ---- ? no google product

social media ---- google+

music streaming ---- google play music (all access)

video streaming ---- youtube / google play movies

money market ---- ? no google product

all the western companies you'd have to combine to cover alibaba's markets would seem to me to be google, and maybe one or two others. i included uber because i know about that one, you could probably fill in a few more gaps with other google ventures companies.

jibster2• 12 years ago

Google just integrated Uber ;)

mahyarm• 12 years ago

You can also include the best buy google kiosks as physical retail.

vishnugupta• 12 years ago

Amazon also comes very close to checking all the boxes.

dengnan• 12 years ago

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.

prawks• 12 years ago

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 Western online shopping experiences I've had (Amazon, Zappos, and even smaller retailers).

I don't know a whole ton about the Eastern market to be honest, so I'm open to being educated.

mcintyre1994• 12 years ago

In fairness the scale goes the other way too - some of these are stated to be quite minor stakes in the article while Google fully own everything mentioned by the parent (except Uber, but Lyft is an example Alibaba don't own outright)

jareds• 12 years ago

Depending on your deffinition of e-learning Google Classroom may provide what you need. http://www.google.com/edu/classroom/

mikeevans• 12 years ago

For e-learning, there's Google Helpouts. https://helpouts.google.com/

jriggs• 12 years ago

Google is extremely invested in education, recently they announced Google Apps for eductation: http://www.google.com/enterprise/apps/education/

They also contributed a pile of money to EdX. Those are 2 examples off the top of my head

adamwintle• 12 years ago

Google have also quietly launched a global sourcing search engine, which covers most of the core features of Alibaba's main site: https://www.google.com/shopping/suppliers/

mmanfrin• 12 years ago

I think many large tech companies have me-too platforms in a wide range of services -- just because Alibaba has a fork of Android does not make it comparable to Android. A better comparison would be yielded if the userbase/usage of these services were included.

This is not to say that Alibaba is not an incredible company, just that this is an incomplete comparison.

stusmall• 12 years ago

I haven't heard of Aliyun OS before. It appears to be a forked version of AOSP. Does it add anything significant on top of it?

est2• 12 years ago

They had their own Dalvik-like JVM implementation, other than that, UI stuff and meh.

justincormack2• 12 years ago

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.

outside12342• 12 years ago

if you don't know who the sucker is at the poker table, then its you.

tapp• 12 years ago

Interesting - I didn't know that as I haven't been following the story closely.

For others who may be in the same boat, I found some additional details here:

"Alibaba will not own most of its Chinese assets, including Taobao Marketplace and Alibaba.com. So the companies that are the core of Alibaba’s Chinese operations — the main reason for the anticipated heated investor demand — will not even be owned by Alibaba... Instead, the company is using a so-called variable interest entity structure."

http://dealbook.nytimes.com/2014/05/06/i-p-o-revives-debate-...

guelo• 12 years ago

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

outside12342• 12 years ago

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

notatoad2• 12 years ago

This is an interesting fact that none of the articles i've seen so far have mentioned. Do you know how Yahoo fits into this? is their stake in the holding company as well, or in Alibaba proper?

justincormack2• 12 years ago

I think they own it more directly, as the holding company is new. But they have had issues in the past.

seferphier• 12 years ago

alipay is not part of Alibaba now.

thothamon• 12 years ago

It's not clear to me how it's good for me as a consumer to have one company providing me everything. That seems to go wrong more often than it goes well.

As an investor, I can see how a monopolistic behemoth might be good, assuming we ignore possible legal problems. But I'd also worry that a huge company like that would not be able to focus effectively on the probably hundreds or thousands of products and markets in which they must be involved. Huge companies like Exxon, say, are at least focused primarily on energy needs; Amazon on online retailing; Apple or Sony on consumer electronics and software. What is Alibaba focused on? (And yes, the same question could be asked about Google, although search and ads are probably the biggest things.)

What is Alibaba currently really world-class at, OTHER than owning the Chinese market from top to bottom? Owning the Chinese market is probably caused as much by cronyism as by being really good at anything.

podman• 12 years ago

Although Alibaba is a huge company that does a ton of different things, I feel like this article went out of the way to avoid mentioning that companies like Google and Amazon (as well as Microsoft and Apple to a lesser extent) come close to checking all of these boxes. The other thing to point out is that Alibaba owns stakes in many of these companies and doesn't really own them outright.

As others have already pointed out how Google compares, take Amazon for instance:

Online Payments - Amazon Payments

Cloud Services - Amazon Web Services

Mobile Apps - Amazon AppStore

Mobile OS - Amazon FireOS

Maps and Navigation - Amazon Maps API

Retail Outlets - N/A

Group Buying - Amazon Local

Cloud Storage - Amazon CloudDrive / Amazon S3

Mobile Messaging - N/A

Car Service, Ride Sharing - N/A

C2C e-commerice - Amazon Services/Amazon WebStore (not quite the same, but close)

Online Travel Booking - N/A

B2C e-commerce - Amazon.com

E-Learning - http://www.tenmarks.com/ (owned by Amazon)

Microblogging - N/A

Music Streaming - Amazon Cloud Player

Streaming Video - Amazon Prime Instant Streaming

Money-market funds - N/A

12/18 isn't bad.

gitah• 12 years ago

Also Amazon and Google does a lot of stuff Alibaba does not do.

* Self-service warehousing and distribution (Fulfillment by Amazon)

* Package Delivery (Google Shopping Express, AmazonFresh) TV setup box (Amazon FireTV)

* Search Engine (Google Search) Web Browser (Chrome)

* Laptop/Desktop OS (Chrome OS)

* Wearable Tech (Android Wear, Google Glass) etc.

Also for many offerings like Aliyun and Aliyun OS pale in comparison in the features offered by AWS or Android.

I went to an Alibaba presentation in the US awhile ago. They want to pursue the same strategy as Google and focus deep on big data and Machine Learning rather than building out huge logistic infrastructure like Amazon. This is probably a good idea since the margins are better.

est2• 12 years ago

Alibaba owns UCWeb is top 1 mobile browser since Windows Mobile ages.

joshlegs• 12 years ago

You know, you could have just gone the extra step and simplified to 2/3. Then you'd have had a lock on that age-old aphorism

notahacker2• 12 years ago

The other thing to point out is that Alibaba owns stakes in many of these companies and doesn't really own them outright.

On that basis Yahoo's stake in Alibaba has got to be 18/18, plus content publishing, directories, email and search.

mbell• 12 years ago

I've seen a lot of articles talking about how huge Alibaba is, but they all seem to focus only on transaction volume, e.g 'Alibaba has more sales than Amazon and eBay combined!'. I was really surprised when I read their filing, $4.7B in total revenue last financial year, $5.7B in the first 9 months of this financial year. Amazon + eBay in 2013 pulled in $33B in revenue. They seem to be processing a lot of transactions, but charging very little for it.

adventured2• 12 years ago

I agree. Every article I've come across goes out of the way to avoid ever talking about Alibaba's actual revenue. It's clear there's an immense amount of pumping going on leading up to the IPO.

Fact is, Alibaba isn't all that large at all. And 57% revenue growth on ~$8 billion in annual sales, while excellent, is not earth shattering. A lot of US tech companies have pulled off that kind of growth, Amazon included.

encoderer• 12 years ago

A lot? Care to cite? You may be correct but my gut says a few have done it. A "lot" seems like overstatement.

And you say "Amazon included." Have you ever seen Amazon's sales growth charted? It's the definition of hockey stick growth. Of course they're included, but who else is?

instoftech2• 12 years ago

Yes, low transaction fee is part of Alibaba's strategy to grow the eCommerce market in China (and also a major reason why eBay failed their China venture to Taobao in early years).

Amazon/eBay transaction fees (~10%) seem ridiculously high. They almost eat up all margins of many industries. Many small business sellers are complaining about it.

marincounty• 12 years ago

It might "be the Amazon of China", but I don't trust most of the companies. I really wanted to like this company, but the communication is terrible(which is understandable), and the quotes I get from suppliers are for the wrong request, or appear to be counterfit goods? There's a huge need for an independent verification system for Alibaba sellers; maybe located in a western democratic country? Right now-- trust is really my problem with their site, and their suppliers.

datamingle• 12 years ago

It is like the GE of chinese tech.

ironthron• 12 years ago

I like how this site compares companies with international market to Alibaba. Alibaba is only there to serve the Chinese. Anyone else would never use any of Alibaba's services.Chinese has over one billion in population, they are very strict with foreign company. Of course Alibaba is going to seem like a great investment... for a short term. However is a horrible investment in long short term. The Chinese population will decline, as they do so will profit of this company.

frozenport• 12 years ago

You could never combine Western companies to do what Alibaba did because of anticompetive, protectionist, nationalist, and corrupt policies in China. The chart can be read in reverse, describing what Alibaba knocked-off.

megablast• 12 years ago

Or Apple?

xiaq• 12 years ago

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

oelmekki• 12 years ago

Although it's not directly related to the tech side, I would love to have your feedback on alibaba.

It suddenly appeared in my search results last month when looking to buy something, with a lot of results - from alibaba itself and from aliexpress. As with any website I don't know of, I queried trustpilot for them.

It's not good at all[1][2]. Most reviews talk about scams. We may praise them for being a very tech heavy company and being about to make their IPO, but let's not forget the actual service value provided to customer.

Does anyone has insight on how those reviews may be misleading ?

* [1] http://www.trustpilot.com/review/www.alibaba.com

* [2] http://www.trustpilot.com/review/www.aliexpress.com

xrjn• 12 years ago

Those two sites are not meant for inexperienced people. You can certainly find a scams there, but they're fairly easy to spot: unbelievable prices, payment only by western union, sellers with no/little reputation...

Personally, I've mostly had mostly good experiences with those two sites - almost all of the items I ordered arrived and worked well. The two exceptions was when I bought a very low price product, but I got a refund for it, and another example was when I bought a large lot of items at almost a 5th of their price, and paid by Western Union... it was my fault for not knowing better.

guiomie• 12 years ago

Let's say the business environement for foreign tech gets less hostile or even totally open, has anyone calculated how Alibabas valuation would deflate ?

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

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