Alibaba Group Holding Ltd (BABA) Along With Other Chinese Tech Companies Rage Investment Wars to Become Cyber Hotspot In China

Alibaba Group Holding Ltd (NYSE:BABA)

There is an investment war going on in between the major tech companies of China including Alibaba Group Holding Ltd (NYSE:BABA), Tencent Holdings Ltd (HKG:0700), and Baidu Inc (ADR) (NASDAQ:BIDU). Each of these companies is trying to transform into a one-stop shop for the world’s largest internet user market.

According to a recent research, Alibaba and Tencent have spent more than $8 billion in backing similar startups to gain higher customer loyalty. Unlike the earlier technology era where companies used to focus on a particular group of services and products, all three of these companies including Baidu Inc (ADR) (NASDAQ:BIDU) are getting into each other’s territory quite often.

Duncan Clark, MD of BDA consultancy in Beijing, said that none of these companies are willing to lose on a particular trend and are all investing more and more money to gain major user share. He added,

“The fight to stay essential, to stay relevant, to stay on top of the home screen, it’s what it’s all about.”

Alibaba Group Holding Ltd (NYSE:BABA)

One of the liveliest examples of this investment war is the heavy funding received by taxi apps from all of these companies. The taxi apps including Didi Dache and Kuaidi Dache have raised over half a billion dollars in funding within the last one month from Tencent Holdings Ltd (HKG:0700) and Alibaba Group Holding Ltd (NYSE:BABA) respectively. At the same time, Baidu Inc (ADR) (NASDAQ:BIDU) invested an undisclosed amount in Uber taxi app.

The recent round of funding wars is in the group-services industry and, backed by Alibaba Group Holding Ltd (NYSE:BABA), raised up to $700 million in its latest round of funding. With a similar strategy, Baidu Inc (ADR) (NASDAQ:BIDU) purchased Nuomi last year and another group buying site, Dianping, is likely to raise funds at a similar scale.

The race for the cyber space crown in the world’s largest internet market is likely to attract similar investments in near future.

This article has been written by Prakash Pandey.

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