Tencent VS Alibaba, check first this Great video
You will understand the Internet War in China.
Wechat is moving to E-Commerce
As explained this Company, Wechat is investiing in the E-Commerce and try to kill taobao (alibaba Group)
In light of Tencent's $ 500 billion assessment this week, analysts are once again looking at the Chinese Great Firewall for an answer.
The Great Wall of China has pushed the American giants away from technology and fueled the flame for Chinese megacorporations, like Tencent and Alibaba. This environment is ideal for attracting a national audience, with virtually no other options, and significant investments.
Tencent has created a Tencent lifestyle. Under the wing of Tencent are several of China's busiest online services, such as WeChat, QQ, QZone and their games Tencent, China's largest online gaming community, Tencent Literature, and Tencent Comics.
Source : https://www.taiwannews.com.tw/en/news/3305168
There is also WeChat Wallet, which has become a monster in the mobile payments market in China.
An important factor in Tencent's dominance is that future competitors Facebook, Twitter, Youtube and Google, especially all Americans, are stuck in China.
While Tencent's $ 500 billion valuation this week has nearly surpassed Taiwan's annual GDP, as the China Times reports, this is not a sign of a failing Taiwanese economy.
$500B evaluation
source Techcrunch
Tencent has become the first Chinese company to be valued at more than $ 500 billion.
Shares of the 19-year-old Hong Kong-listed company rebounded to HK $ 418.80 to reach a market capitalization of HK $ 3.99 trillion, exceeding $ 500 billion. Alibaba, its closest rival, is the second most esteemed Asian company with $ 474 billion.
The half-trillion dollar club entry - which includes Apple, Alphabet, Facebook, Microsoft and Amazon - comes a week after Tencent reported a profit of 18 billion RMB ($ 2.7 billion) on revenue of RMB 65.2 billion for the third quarter of 2017. Overall profit increased 69% year-on-year and revenue grew 61% thanks to Tencent's gaming business
As SCMP pointed out, a US $ 9,000 investment in the company's IPO in 2004 would now cost US $ 1 million.
In the last twelve months alone, Tencent's share price has doubled thanks to impressive results such as the third quarter.
Chinese individuals do not eat a lot of meat, but they have used poultry and poultry in their delicacies. The Chinese follows the viewpoint of yin and, which means that they like to have balance in the foodstuffs that they eat. It is for this reason that their foods have different designs and colors.
For the first time this year, we are studying the consumption of food and drinks. source: Cooklover
Chinese Consuming Trends
Chinese consumers in Tier 1 and 2 cities to track their food and beverage purchases for their homes using smartphones.
Combining with other data sources, we conducted a thorough analysis of the overall dynamics of food and drink channels.
The results obtained helped to understand the dimensions of a significant difference: more and more Chinese substitutes for out-of-home consumption (consumption and meals in restaurants) for home consumption. This change was made in 2014, with the treatment of home care and care.
When we presented the two-speed preview to our readers last year, we showed, for example, comment growing as we struggle. Merchandise and online purchases were made by potential buyers. National brands thrived on average, while many multinational brands dropped out.
This two-tiered vision has hit businesses and many have begun to use a new approach to their strategy by revisiting their portfolios. They are growing rapidly, but they are growing rapidly in fast-paced arenas.
This year, we found that two-speed growth continues, and that growth in FMCG value is slowed in 2016 by all sectors surveyed, reaching its lowest level in five years. This is a combination of near-zero growth and decelerating price growth, which is being slowed by growth in the value of consumer goods.
the Vodka case study
FMCG in China
Let's look at the product categories first. The growth in FMCG sales value for domestic consumption was 3.0% in 2016; However, growth rates for food and beverage categories are very different for home care and personal care. To the point where food has increased by 0.5% and drinks by 2.0%, while personal care and home care have increased by 10.5% and 3.5%, which represents an improvement by report to 2015. source
Penetration rates in categories are declining or declining2. The average household penetration in the 26 categories is 81%, down from 83% last year. Among the reasons:
Distribution in China, Challenges for International Brand
Most categories have reached the distribution they need in urban China. The expansion of the mass is almost on and face the challenge of increasing repeat sales and premium to grow.
Categories of personal care products and high quality storage units (SKUs) in many categories continue to experience strong value growth as Chinese buyers who can afford it demonstrate that they are willing to pay for high quality products.
In the coming years, companies that will do the best job simultaneously at two speeds will be able to outperform their competitors. This is already becoming evident in areas such as instant noodles, a category that seemed to have an unattractive future. But major brands such as Master Kong and Uni-President can turn the tide: they are now targeting white-collar workers with new high-end product lines, while offsetting declining volumes in their traditional blue-collar businesses by raising the prices of mass products. . We expect to see more moves like these - this will be the way to grow and flourish for brands in China.
This year, we observed a continuous geographic trend. The provinces of south-west and central China have maintained their status as the main driver of growth in consumer goods sales. This is the result of an increase in the number of households, fueled in part by the urbanization of the inland provinces as many industries leave the coastal regions.
We also noted a continuation of the two-speed model in channel growth. The most dramatic situation:
hypermarkets fell by 2%
and supermarkets or mini-markets decelerated to 2%.
In comparison, convenience stores grew by more than 7%.
The e-commerce chain continues to skyrocket, recording growth of more than 52% in value.
Online now accounts for 7% of all consumer goods sales - it has doubled its share of the consumer goods market over the past two years.
Online is even more popular in tier 1 cities, but lower-tier cities are catching up quickly.
And the three category categories we identified last year, based on their digital penetration trajectory since 2012,
Health Care in China
Skin care, shampoos, diapers and cookies have high online penetration and a strong upward trend.
Beverages, fabric softener and chewing gum have low online penetration, reflecting features that limit their online potential.
An intermediate group of categories, covering most personal care, home care and packaged foods, is actively encouraged for online growth by major brands and e-commerce retailers.
Finally, we still see the two-speed effect in the ongoing battle between foreign and local brands. In 2016, local businesses maintained their ability to gain share from foreign competitors, measured globally. In fact, foreign brands have captured shares in only 4 of the 26 categories we studied and lost in 18 (while 4 categories have not changed, or have barely changed). Local businesses grew by 8.4%, while foreign brands grew by only 1.5%.
How to Enter to the Chinese Market ?
In general, domestic players earn personal care; When foreign companies gain shares, it is often in the food and beverage categories.
A host of well-known reasons suggest why Chinese companies do so well at home. These include: the entrepreneurial governance of local players and Founder's French Spirit, their knowledge of local taste and their ability to make quick decisions and execute decisions quickly, including those that help them innovate or seize digital opportunities.
Branding is the Key
Products with STRONG BRANDING perceived as healthy or hygienic have achieved high and increasing penetration. They make yogurt, shampoo, handkerchief, packaged water and sofas. On the other hand, categories perceived as less healthy, such as confectionery (chocolate, sweets, chewing gum) and instant noodles, all lost ground.
Healthcare product categories and high quality storage categories (SKUs) in many categories can register strong value growth as Chinese buyers who may be allowed to pay higher quality products.
In the coming years, companies that do the best two-speed job will be at the center for their competitors. This becomes evident in noodles, a category that will have an unattractive future. Major brands such as Master Kong and Uni-President can reverse the trend: they are interesting with white-collar workers with news of high-end products, while offsetting the decline in volumes among their traditional products. . We will see more movements like these - it will be the way to grow and prosper for China.
This year, we observed a continuous geographic trend. The southwestern provinces and central China have their status as the main engine of growth for consumer goods sales. This is the result of an increase in the number of households, fueled by the urbanization of the inner provinces.
We also noted a continuation of the two-speed model in channel growth. The more dramatic situation: hypermarkets fell by 2% and supermarkets or mini-markets decelerated to 2%. In comparison, convenience stores are increased by more than 7%. The e-commerce chain continues to grow, growing by more than 52% in value.
