Alibaba announces plan to create a music service arm for Chinese consumers. (Photo : Reuters)
Alibaba and Tencent are currently vying to be China's top one-stop online shop. The two companies are willing to spend billions to be the one-stop online shop that Chinese consumers would trust the most.
Alibaba and Tencent have already spent more than $8 billion on 2014 in their race to be the top online one-stop shop that could cater to the needs of the Chinese netizens. Before the country became the top smartphone market, Alibaba and Tencent did not really mind each others' operations.
Alibaba Group Holdings Ltd. is an e-commerce leader, while Tencent Holdings Ltd. is a social networking firm. However, as the smartphone market exploded, the two are racing to tap into the very lucrative market of offering the Chinese smartphone users everything they need on just one online shop. Baidu, the premiere search engine provider of the country, is also joining in the competition. All firms are investing in the same services, trying to attract the same pool of consumers.
"What keeps people up at night is the fact that they might miss a certain trend or a certain hot company that really is going to bring all the attention and the users in," said Duncan Clark, managing director of Beijing-based consultancy BDA.
"The fight to stay essential, to stay relevant, to stay on top of the home screen, it's what it's all about," Clark explained of the race.
Taipei-based tech commentator Ben Thompson, who writes for stratechery.com, also has an insight to share about the race among the three companies.
"Alibaba, Tencent and Baidu . . . don't want to miss out--or finish a distant second, which is just as bad--so they're investing heavily," he said.
