Author: Chen Jiuling
Tencent and Alibaba are undoubtedly the two giants of China's Internet technology companies.
The difference is that Alibaba is the "number one e-commerce company" and Tencent is the "number one social company". These two companies are giants themselves, and have penetrated into all aspects of our lives through investment and acquisitions.
In the process of growth, investment and mergers and acquisitions are essential means, whether to integrate resources or develop new businesses.
But in this process, becoming Alibaba’s younger brother and becoming Tencent’s younger brother have two completely different destinies.
2003 was founded on Taobao.com . After defeating the foreign e-commerce giant eBay, Taobao rose to the throne of China's "No. 1 e-commerce company" and then grew rapidly. Its status has long been unshakable.
Due to the uneven quality of Taobao's products at that time and were full of fakes, the high-end brand of Tmall was launched in 2012, introducing a large amount of Taobao traffic to Tmall. The higher-end Tmall indeed rose, but the low-end Taobao inevitably declined.
At this time, Pinduoduo discovered an opportunity. Taobao does not do the low-end sinking market, and it directly connects to factories, making the price even cheaper.
Pinduoduo , like Taobao, also carries terms such as fakes, defective products, and low-end products. Although people with financial ability look down on Pinduoduo, the poor people like it very much. The huge people at the bottom have brought a broad market to Pinduoduo.
At this time, Tencent found that it was difficult to shake Alibaba's e-commerce location, so he changed his mind and invested in Pinduoduo.
A few years later, Alibaba discovered an unacceptable fact, that is, Pinduoduo caught up and its dominant position was seriously challenged.
Although Pinduoduo has had a huge impact on Taobao, Alibaba's high-end brand Tmall is developing rapidly, and Pinduoduo is obviously not a rival to Tmall. So Tencent found another brother, that is, JD , which is also a high-end brand. In 2014, Tencent acquired a stake in JD and sold all its e-commerce business to JD.com. JD was in the limelight for a while and had a trend of competing with Alibaba.
With the support of Tencent’s capital and traffic, Pinduoduo and JD.com have achieved great development, and they have posed a serious threat to Alibaba’s status.
In 2006, Alibaba invested in word-of-mouth network and wanted to have a local life, but the result was not satisfactory.
In 2018, Alibaba acquired Ele.me with full capital, and wanted to compete with Tencent's Meituan . At this time, the gap between Meituan and Ele.me is not big. It can be said that they are standing on the same starting line to compete.
Ali immediately replaced Ele.me’s founding team and sent its own people to take over. After that, Ele.me lost steadily in the competition with Meituan, and now Ele.me and Meituan are far apart.
In the taxi field, Tencent supported Didi and Alibaba supported Kuaidi Company. The war between the two caused a lot of storm. Later, the result was that Didi merged Kuaidi Company.
In the music field, Alibaba acquired Xiami Music that year, and then merged Xiami Music and Tiantiandong to form Alibaba Music . In 2016, Tiantiandong announced the suspension of service.
In the video field, Alibaba acquired Youku Tudou in 2015. You should know that Youku Tudou was the top two video websites in China at that time. As a result, Youku Tudou continued to decline and was overtaken by Tencent Video and iQiyi .
From these cases, we can find that Alibaba and Tencent’s investment methods are very different.
Ali cares more about the control of the invested company. It is usually acquired with full capital. After the acquisition, it will send a direct descendant to replace the founding team, which gives people a bit domineering, which is very consistent with Alibaba's wolf culture.
Tencent is a direct investment company. It not only does not interfere with the company's operations and replaces the founding team, but also provides funding and traffic support. Under such an investment method, it is difficult for the invested company to not go big!
The deeper reason is actually the difference in business models. Alibaba’s main business is e-commerce, which requires endless traffic, so it acquires the company in order to attract traffic to itself. Constantly "drawing blood" is a normal person, and it has problems.
. Tencent’s main business is social and games. It is a traffic provider. It not only has money, but also has endless traffic. So he just needs to constantly find excellent companies to invest and provide support, which will inevitably make a lot of profits.
From this perspective, Tencent is more like an investment bank, and its business can theoretically be spread throughout all walks of life. In fact, Tencent also does the same, such as the information and communications industry, e-commerce and entertainment industry, travel services industry, financial retail industry, artificial intelligence industry, etc. We can all see Tencent.
