BAT vs FAANG: The battle for digital dominance

Facebook, Apple, Amazon, Netflix and Google would love to get access to China’s 1.4 billion population, but protectionist regulation has made that almost impossible.

Instead, their prospective positions in the world’s second biggest economy have been taken by homegrown equivalents: Baidu, Alibaba and Tencent. The three tech firms dominate the digital and social categories in China – and are starting to rub up against FAANG in international markets.

Alibaba – China’s Amazon
While it’s important to be cautious about direct comparisons between US and Chinese brands, most analysts agree that the nearest thing to online retail platform Amazon in China is Alibaba.

In 2017, the company reported revenues of over $40 billion, up 58% year on year, and it expects 2018 to be similar. In May, Alibaba CFO Maggie Wu said she expects “revenue growth above 60%, reflecting our confidence in our core business as well as positive momentum in new businesses.”

Aaron Kessler, Analyst at Raymond James, says Alibaba controls 70% of the Chinese e-commerce market, adding: “We expect continued robust China e-commerce growth with Alibaba as the biggest winner.”

While China accounts for most of Alibaba’s revenues, Co-founder and Executive Chairman Jack Ma has made no secret of…