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China

China's BAT Tech Giants Giving GAFA Run For Their Money

Upstarts no longer, the so-called BAT companies — Baidu, Alibaba and Tencent — are a force to be reckoned with.

Alibaba, the Chinese equivalent to Amazon, makes a profit almost four times that of Amazon.
Alibaba, the Chinese equivalent to Amazon, makes a profit almost four times that of Amazon.
Sabine Delanglade

-Analysis-

PARIS — At a time when the Google, Apple, Facebook and Amazon — the GAFA — are starting to hear it from customers over their quasi-totalitarian practices, they're also taking heat from the country that invented gunpowder: China.

The gang of four used to think they only had only minor challengers behind the Great Wall. But they're now realizing that the new Chinese dragons — Baidu, Alibaba and Tencent (the BAT) — are the real deal: top-level contenders that could one day even outdo them.

The BAT's stock market value and activity levels are growing, for the most part, faster than those of their American peers. You don't need a compass (another Chinese creation) to see that these curves will one day intersect. In fact, they've already begun to do so.

Last November, Tencent surpassed Facebook in total value, one day after becoming the first Chinese company to break through the $500 billion mark. Alibaba is also set to enter the exclusive $500-billion club, joining Apple, Amazon, Google, Microsoft and Tencent. Facebook, on the other hand, left it.

Alibaba's profits are almost four times those of Amazon. Of course, the weight of the GAFA is still far superior. Google's turnover is 10 times that of Baidu, just to be put things in perspective. Still, the shift is on. As The Economist recently wrote, "For Silicon Valley, it is time to get paranoid."

Ever heard of Tencent? Every day, 50 million players connect to its flagship video game Honor of Kings, and it's impossible to live, pay, play, and send messages in China without its WeChat application, which boasts 1 billion users. These are not Tencent's only activities, but they give you an idea of its firepower.

For Silicon Valley, it is time to get paranoid.

Alibaba, in addition to its huge e-commerce network, also has the biggest online video platform, a bank (Ant Financial) and a payment system (Alipay). "In other words, they really become closed ecosystems," says Nicolas de Bellefonds from the Boston Consulting Group (BCG). "You can spend your entire day without leaving their platform."

It is this ubiquity and the immense potential of its market that make the Chinese internet a pioneer. In the absence of "physical" distribution networks, China has moved directly to e-commerce and even e-commerce. It turned its lateness into an asset. Its $8.5 trillion in mobile payments represent 70 times the figure for the United States.

"If we want to have a vision of what the internet will be in the future, we have to look at what is happening in China," De Bellefonds explains.

With 4.6 million students recently graduated in science and technology, most of them engineers, China has everything it needs to throw itself into the technological war. The country also has a profusion of the ammunition that will feed it: data, the raw material of tomorrow's intelligence, artificial intelligence. Tencent, Baidu or Alibaba have mountains of it.

Employees in the lobby of Chinese search engine Baidu headquarters in Beijing — Photo: Stephan Scheuer/ZUMA

To hell with privacy! With 170 million "smart" cameras already installed, a figure that's expected to rise to 600 million by 2020, the facial recognition market is within reach. In other words, when Xi Jinping sees himself as a cyber power and says that by 2025 his country will dominate artificial intelligence, one can think that this date will be a future addition to the key advances of the Chinese internet listed out by the BCG. It looks like a Blitzkrieg.

By 2008, China had already surpassed America in terms of internet users (253 million against 220 million). In 2013, Alibaba's transaction volume ($248 billion) was higher than Amazon's and eBay's combined. In 2014, it reached $490 billion, more than Walmart. With a total of $165.6 billion in deposits, Yu'e Bao, owned by Ant Financial, became in 2017 the largest money market fund in the world ahead of JP Morgan. The brilliant idea was to allow the Chinese to capitalize the money remaining on their Alipay mobile accounts after online purchases.

If the curves intersect, both sides will likely cross swords. But where? Not in their domestic markets. Too difficult. It was by preventing the GAFA from entering the country that China allowed its own companies to grow. Go ahead. See what happens if you try to check your Facebook account in Beijing!

American liberalism doesn't go so far as to leave its doors wide open either. The Singaporean company Broadcom knows this well, prevented as it was by the Trump administration from buying Qualcomm, the American chip giant, in an attempt to protect it from Huawei, a Chinese company whose equipment is banned in the U.S.

Everything is still up for grabs

So, will the battle take place in Europe? "Europe is bare against the GAFA and the Chinese giants," says a fulminating Laurent Alexandre, the herald of artificial intelligence. Having failed to unite and defend itself as China did, the Old Continent is not a fighter in this battle, just a battlefield already largely occupied by the Americans.

The deteriorating image of the GAFA — accused of taking people's data, of not paying taxes — could present China with an opportunity to play the "good cop." But the weight of the control of Chinese companies by their government will undoubtedly make their customers fear going from the frying pan into the fire. And those concerns may well be justified.

Then there are the emerging markets, where nothing's decided yet. In India and Africa, the GAFA have started to position themselves but haven't capitalized on it yet. Everything is still up for grabs, because the Chinese platforms, which so far have been very much focused on their domestic market, do not intend to remain inactive.

They have already done a lot of shopping and — in Africa as well as in Asia — their country has shown a certain know-how in terms of influence and establishment. If they manage to become the reference platforms there, they will mechanically cover four-fifths of the world population. And that's a lot.

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Society

How Argentina Is Changing Tactics To Combat Gender Violence

Argentina has tweaked its protocols for responding to sexual and domestic violence. It hopes to encourage victims to report crimes and reveal information vital to a prosecution.

A black and white image of a woman looking at a memorial wall in Argentina.

A woman looking at a memorial wall in Argentina.

CC search
Mara Resio

BUENOS AIRES - In the first three months of 2023, Argentina counted 116 killings of women, transvestites and trans-people, according to a local NGO, Observatorio MuMaLá. They reveal a pattern in these killings, repeated every year: most femicides happen at home, and 70% of victims were protected in principle by a restraining order on the aggressor.

✉️ You can receive our LGBTQ+ International roundup every week directly in your inbox. Subscribe here.

Now, legal action against gender violence, which must begin with a formal complaint to the police, has a crucial tool — the Protocol for the Investigation and Litigation of Cases of Sexual Violence (Protocolo de investigación y litigio de casos de violencia sexual). The protocol was recommended by the acting head of the state prosecution service, Eduardo Casal, and laid out by the agency's Specialized Prosecution Unit for Violence Against Women (UFEM).

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