
All the Western companies you’d have to combine to get something like Alibaba - ASquare
http://qz.com/206283/all-the-western-companies-youd-have-to-combine-to-get-something-like-alibaba/?source=HackerNews&referrer=Anuj+Adhiya
======
jfasi
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.

~~~
cromwellian
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?

~~~
fspeech
"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.

~~~
onewaystreet
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.

~~~
fspeech
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.

~~~
cromwellian
Come now, Google China had onerous censorship provisions placed on it that it
did not want to adhere to, and Google simply can't be a den of piracy like
Baidu was.

~~~
fspeech
Yes Google is a rather special case. It clearly has technological advantages
and may have succeeded despite its clumsiness if Chinese regulations were
different. However that does not explain how others failed, like EBay or
Yahoo. I showed clearly ownership restriction wasn't the reason. Local
operational control was, in my opinion. I don't even see how this could be
controversial. Jack Ma is one of China's richest man. So are the other Ma (of
Tencent) and Li (of Baidu). Does anyone think hypothetical resounding
successes of EBay/Google/Amazon etc could have similarly minted local
billionaires? Why would the same incentives work in the US to create
successful entrepreneurs but not in China?

Tactically it may be true that stricter ethics rules make things harder. But
that didn't stop businesses like Starbucks from succeeding eventually, because
their business model can be transplanted.

Alibaba didn't have success handed to it. Its initial B2B model was ho hum. It
had to or did recreate itself, multiple times. Its Taobao was initially a loss
leader with free listings. TMall was also not given a high chance of success.
It had ferocious competitors. It created its own business models and executed
well to ensure their success.

~~~
seanmcdirmid
Out of all the companies you listed, NONE have American born founders: Ebay
(Iranian), Yahoo (Taiwan), Google (Russia, ok Page is born in Michigan). How
many people who aren't born in China have been minted as billionaires at
Chinese companies?

Starbucks had plenty of problems with their Chinese partners; they worked hard
to get to the point where they were actually allowed to run stores by
themselves without a parasitic local partners, and I think this is only true
in second tier cities right now.

~~~
fspeech
"NONE have American born founders"

Neither were they divisions of some foreign conglomerates. I think that is
more relevant than the fact the founders were foreign born. Certainly you
would think of Jerry Yang or Sergey Brin or Pierre Omidyar as American as any
other. They are not foreigners just because they are foreign born.

~~~
fspeech
"Also, China doesn't support dual citizenship like the states does. So
becoming a Chinese citizen means renouncing your US citizenship."

That is incorrect. Becoming a US citizen means renouncing your native
citizenship as well. The only exception is if you were born into dual
citizenships in which case you don't need naturalization at all.

~~~
Tloewald
The United States allows dual citizenship if you naturalize to a non-hostile
foreign country without renouncing your US citizenship, but only because of a
supreme court decision over US citizens who became Israel citizens. I am dual
US/Australian via this route.

~~~
fspeech
What do you make of the naturalization oath? Namely: "I hereby declare, on
oath, that I absolutely and entirely renounce and abjure all allegiance and
fidelity to any foreign prince, potentate, state, or sovereignty, of whom or
which I have heretofore been a subject or citizen; ..." It doesn't have
anything to do with which country you are from.

~~~
seanmcdirmid
In general, supreme court > oath writers.

~~~
fspeech
I think there is a certain amount of cross-talk here. I get what you are
saying about the oath but it is administered by Federal court judges so it is
apparently not in conflict with the Supreme Court ruling. Secondly it is not
what the Supreme Court said that matters here. By asking the naturalized
citizens to take the oath it is entirely reasonable that their native
governments construe the action as renouncing their original citizenship. It
is literally what the oath says. I get that with the Supreme Court ruling it
is possible for American citizens to obtain another citizenship without losing
their US citizenship. I think that is a good thing in this increasingly
globalized world and hopefully one day national borders will mean a lot less
as it is in Europe today. However we were discussing what you said: "So
becoming a Chinese citizen means renouncing your US citizenship." Does China
actually enforce it by demanding proof or also just make you take an oath? I
understand there may be little data to tell at this point. And when I said
that US does the same I meant that the US make you take the oath to renounce
your native citizenship.

~~~
seanmcdirmid
US is a country ruled strictly by law. Sign any contract, or take any oath,
cannot discharge rights given to is by law. In the us, this means dual
citizenship is accepted and even respected even if the politicians wished
otherwise...they cannot deny constitutional rights without changing the
constitution. Contrast this with China's "freedom of speech" that is enshrined
in its constitution but not respected by the CCP, who don't need to grant
those rights to the people since there is no check on their power in the
Chinese system.

No one has naturalized into Chinese citizenship, but china has consistently
refused to acknowledge dual citizenship for anyone younger than 18 or not born
into it. It has nothing to do with oaths.

~~~
fspeech
I was saying that US requires people who naturalize into US citizenship to
take an oath to renounce their original citizenship. This is just a fact and
the Supreme Court did not say this is unconstitutional.

Plenty of people have been naturalized into Chinese citizenship, at least in
Hongkong. Here is the requirement
[http://www.gov.hk/en/residents/immigration/chinese/naturalis...](http://www.gov.hk/en/residents/immigration/chinese/naturalisation.htm)
and I do see that it requires abandonment of foreign citizenship although it
does not say what level of documentation is needed, if any. If it were an oath
then it would be symmetric with US. With China ruled by the CCP it is also
understandable that the demand for naturalization may not be that high in the
first place.

------
podman
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/](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
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.

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

------
notatoad
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.

~~~
dengnan
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
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.

~~~
nichtich
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.

~~~
sp332
Fraud is so rampant, that all of Paypal's competitors were either more
worrisome or got defrauded to death. Paypal found the very narrow area where
you can be careful enough to be profitable without chasing away all of your
customers.

------
thothamon
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.

------
justincormack
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.

~~~
notatoad
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?

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

------
mbell
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.

~~~
adventured
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
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?

------
frozenport
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.

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

------
mmanfrin
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
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?

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

------
xSwag
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.

~~~
adventured
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.

------
marincounty
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.

------
bnycum
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.

------
oelmekki
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](http://www.trustpilot.com/review/www.alibaba.com)

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

~~~
xrjn
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.

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

------
ironthron
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.

------
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_

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

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

------
seferphier
alipay is not part of Alibaba now.

------
nerdo
Ok now do Craigslist.

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

------
megablast
Or Apple?

------
datamingle
It is like the GE of chinese tech.

