Alibaba Is The New Everything Store (HKG:9988) (NYSE: BABA)

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Welcome to another Monday, it was a beautiful weekend in Sydney and we’re back with another Fresh Roundup. This week we looked at Alibaba Group, the Chinese technology giant who has become one of the largest tech companies in the world.

As always, we’ve released two podcasts this week:

In today’s newsletter:

  1. An introduction to Chinese technology companies
  2. Alibaba as the ‘Voltron’ of Chinese technology companies
  3. Alibaba is becoming everything for its customers
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Introduction to Chinese Tech

The Chinese technology scene has exploded in the last decade. Companies like Alibaba, Tencent, ByteDance (now TikTok), Baidu, and Weibo have grown enormously due to the rise of China and increased investment in the region, as well as the growth of the middle-class in China. There’s no way we can provide a comprehensive overview of every major Chinese technology companies so we’re going to narrow our focus to the BAT companies (Baidu, Alibaba and Tencent). These are the Chinese companies that could be analogised to FAANG companies.


Baidu is the Chinese Google. It is the most dominant search engine in China and the majority of search traffic in China is performed through Baidu. The company offers a range of services that are similar to the services offered by Google including Image Search, Maps and Wangpan (similar to Google Drive).


Alibaba is the Chinese equivalent on Amazon. Or maybe Shopify is a better comparison. Alibaba started as a B2B e-commerce platform that connected manufacturers and suppliers to retailers to enable them to buy and sell wholesale volumes of white-label products. Now, Alibaba is more like four or fives companies in one (more on that soon).


Lastly, Tencent. Tencent is akin to the Facebook of Chinese tech companies. The company offers a range of services across social media, entertainment and gaming, e-commerce, utilities and medical. It’s most famous for WeChat, its social media messaging application that has almost become a mobile OS as it offers a range of applications contained within the WeChat application outside of just messaging including e-commerce and payments.


Alibaba as the ‘Voltron’ of Chinese Tech

All three BAT (Baidu, Alibaba and Tencent) companies could be considered ‘super-companies’, they offer a broad range of products and services that could be a seperate company in itself. But where we want to centre our discussion in this roundup and our podcast this week was on Alibaba and their expansion to become an ecosystem technology giant. While traditional e-commerce (both B2B and B2C) still remains their bread and butter, Alibaba has expanded across a range of different products including:

  • Consumer Services: Alibaba has a range of consumer businesses in their portfolio including, which is an on-demand business offering groceries, pharmaceuticals, food and so forth on demand, and Figgy, a travel business where customers can purchase plane and train tickets, book accomodation and event rent cars
  • Logistics: Shipping and delivery services that they wrap around their e-commerce platform, but they can also transport and ship items for consumers
  • Payments: Financial services and payments through Ant Group, one of China’s largest FinTech companies offering payments, wealth management, banking and mutual funds
  • Technology & Cloud: Alibaba Cloud is one of the largest cloud providers in the world and competes with the likes of AWS, Azure and Google Cloud. They also offer a range of technology services such as their PolarDB business, which competes with other database companies (such as SQL and MongoDB)
  • Media and Entertainment: Alibaba run a streaming service called Alibaba Pictures, which produces and streams content, as well as Lingxi Games which produces a range of video games
  • Innovation: Alibaba are investing in a range of other areas including Enterprise software through Dingtalk (a platform like Microsoft Teams) and Amap (a maps application similar to Google Maps)
  • Health: Healthcare through one of their subsidiaries, CITIC 21CN

As you can see, Alibaba has shifted away from its traditional e-commerce background and has moved to become a giant technology company. This leads us nicely to our last point…


Alibaba is Becoming Everything for its Customers

Alibaba is a company that is built on customer data. If you’re a customer on one of their products, Alibaba is collecting data on what products you want, who you communicate with, where you go, how often you do these things, where you go to do things things and how you pay for these things.

By becoming a ‘Voltron-like’ business which offers a range of products and services, supplemented by the wealth of data it has collected on its customers, Alibaba can develop deep insights about its customers in a way that no other companies can do so.

If you’re a user of Alibaba’s products, it can target you to offer anything and everything you could need, from groceries on demand, to healthcare, to movies and even be your bank provider. And if you’re a customer, you can leverage the wealth of data on Alibaba to target your intended customer and ensure your product is front-and-centre of their attention.

As Alibaba continues to grow and push into new markets such as EMEA and into more competitive markets in the West, they may be able to leverage this expertise to win in an increasingly competitive market against the FAANG giants but even companies like Shopify and Square.

🎙️ Want more detail on Alibaba and its portfolio of products and services? Listen to this week’s podcast here!

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