China’s tech giants seek to empower local partners

World
Europe

China’s tech leaders are narrowing the gap with their western counterparts as tech giants become the engine of stock market growth and a driving force for the global economy,

But they are not doing so alone and say they have begun to empower local partners along the way.

This year, four leading US tech giants FANG (Facebook, Amazon, Netflix and Google) have experienced a share price jump of between 30 and 60 percent, much higher than S&P 500 Index.

Meanwhile, BAT (Baidu, Alibaba and Tencent), three major tech companies from China, have reported a more aggressive share price growth so far this year, ranging from 40 percent to 107 percent.

With growing market capitalization, China’s tech leaders are trying to get rid of previous labels by facilitating more partners on their platforms.

“Alibaba empowers other enterprises to do e-commerce, but we are not an e-commerce company,” Jack Ma, founder and chairman of Alibaba, told a panel discussion at 2017 Fortune Global Forum in Guangzhou on Wednesday.

The purpose of e-commerce is to facilitate small companies’ access to market, logistics, financing and latest technology, he said, noting Alibaba is heavily investing in offline retailing.

In the past two years, Alibaba has purchased a 32 percent stake in the supermarket chain Sanjing Shopping Club and a 20 percent stake in national electronics retailer Suning Commerce Group.

Pony Ma, founder and CEO of Tencent, also said at the same panel that Tencent’s strategy is “empowerment with decentralization,” which means Tencent will focus on communication, social and digital content but leave other areas, including online to offline service, transportation, e-commerce and search engine, to partners.

In addition to striving to win more partners, China’s tech giants are generous in R&D to keep a leading position amid fierce competition but there is still a huge gap with US counterparts.

According to a 2016 world top 2,500 R&D investors released by European Commission, telecommunications giant Huawei ranked No.8, the highest position made by a Chinese company.

Source: European Commission

China’s search engine company Baidu ranked No.93, higher than all other Chinese Internet companies.

This compares to the rankings of the US Internet giants, which were all in the top 300.