There is no “big factory” in China’s Internet—there is data and the truth
40 local giants lost to one American Amazon. This battle for the structure cannot be lost anymore!
An article from Tencent. Some excerpts are included.
Data in 2020 shows that in the Internet and direct selling retail industry, the total market value of China's top ten companies is Amazon's 78%, revenue is 71%, and profit is 125%. In the interactive media and service industry, the total market value of China's top ten companies is Alpha Beta's 66%, revenue is 54%, and profit is 72%.
Looking at the Internet and direct selling retail industry, the total market value of all 40 Chinese companies in the Internet and direct selling retail industry is US$1,076.4 billion, revenue is US$246.7 billion, and profit is US$30.6 billion. The total is only 80%/64%/144% of Amazon’s corresponding data. All 44 Chinese companies in the interactive media and service industry have a total market value of US$673.9 billion, revenue of US$102.1 billion, and profits of US$29.4 billion. The total is only 67%/56%/73% of the corresponding data of Alpha Beta.
The strength of China's Internet industry as a whole is not as strong as that of a single American company
After reading this article, I lamented that there are no "big companies" in China's Internet.
The two-year epidemic has actually been a good thing for the Internet, and a big one at that.
The sharp rise of Amazon and Alphabet (Google) in the past two years is enough to illustrate this point.
However, what is interesting is that domestic Internet companies are not only not rising, but are falling, or even falling sharply.
Why?
Why?
Why?
Because domestic Internet companies generally lack “hard power”.
In the past 20 years of the Internet, what have we been playing with?
Traffic games, copy-paste and crawlers (not just content, but also code, creativity, etc.), seducing and calculating users (some people call this growth), spreading money in various ways (also called growth), and black technology. . .
In short, the ones that are highly praised are all "virtual", all are tricks, and all are "appealing and pleasing to the eye."
I have played all of the above, and they are very boring, very boring, very boring.
Let’s look at what Amazon has done.
If you think Amazon is just an online mall, you are totally wrong.
Amazon, at least two more things:
1. The world’s number one cloud computing.
2. The world’s No. 1 e-commerce supply chain.
Note: The number one here is not just about size.
what does that mean?
1. Online is the best way to reach, connect and serve netizens around the world.
2. Offline is the best way to reach, connect and serve people all over the world.
Let’s put it in plain English.
1. Online, sell products from all over the world to the world.
2. Offline, deliver products from all over the world to the world.
Do you need it?
can you do it?
Can you find a replacement?
This is hard power.
you need to.
You can't.
You can't find a substitute.
So, just use it.
Therefore, after the epidemic began, many domestic companies entered Amazon to sell their products all over the world.
A huge impact of the epidemic on the world is that the mobility of the global population has been greatly reduced. To put it simply, everyone is trying not to go out, meet, or have contact with each other.
Therefore, the demand for the depth and breadth of online connections has increased significantly around the world, and the demand for the depth and breadth of offline connections has also increased significantly.
This is the fundamental reason why Amazon has surged during this global disaster.
Why Amazon? Rather than a domestic Internet company?
Because domestic Internet companies are too "virtual", while Amazon is full of hard power.
Among the books I read in 2021, the book "Antifragility" impressed me deeply. The ideas in this book really apply here.
Quote from the beginning of this book. I like this passage very much:
How to fall in love with the wind. The wind will extinguish the candle, but it can make the fire burn brighter and stronger. The same goes for randomness, uncertainty, and chaos: you exploit them, not avoid them. You want to be a fire, longing to be blown by the wind. This sums up my clear attitude towards randomness and uncertainty.
Domestic Internet companies are too "fragile", like the flame on a candle, while Amazon, even if it is not "anti-fragile", is "hard" enough to withstand this global catastrophe.
Let’s not talk about cloud computing. Most cloud computing companies in China copy Amazon’s AWS.
Let’s talk about Amazon’s global e-commerce supply chain.
"As long as we build warehouses and logistics teams around the world, and develop supply chain systems such as OMS and WMS, we can have a global e-commerce supply chain similar to Amazon."
Don't think so, you will be killed by yourself.
Every link in Amazon's supply chain is full of "technical gold content."
Take the matter of building a warehouse as an example.
How many warehouses are needed in a certain country?
Where exactly is each warehouse located?
These are all calculated through big data. In order to keep the overall "supply cost" to the lowest.
Another example is that they have been doing one thing for many years.
That is to constantly use various algorithms to calculate the cost of each link in the supply chain, then put forward various assumptions, and then calculate the impact of various assumptions.
This is about finding ways to make “supply costs” lower.
That is: How can we make the overall efficiency higher and the "supply cost" lower?
To put it bluntly: How can we do it faster and save money?
for example:
If a certain algorithm is used to reduce manual operations in a certain link, how much money can be saved a year? Is it worth doing?
If some kind of robot is used to replace workers in a certain link, how much money can be saved a year? Is it worth doing?
. . . . . .
If it's worth doing, then they turn the "if" into a "reality."
Over the years, Amazon has made its supply chain "strong and economical."
Even if a competitor can quickly catch up with it in terms of scale and scope, it will be difficult to compete with it in terms of efficiency and cost in a short period of time.
This is Amazon's supply chain, full of "technical gold content" and full of hard power.
A few years ago, I had a long chat with one of the “veterans” of Amazon’s supply chain, and the topic was about Amazon’s supply chain. So, get to know some.
I have to say that compared to Amazon’s “hard power”, domestic Internet companies are really too “virtual”.
Without further ado, let me end with a quote:
The wind will extinguish the candle, but it will make the fire burn brighter and stronger.
