A duopoly this broad could not be easily replicated in the United States. Entrenched competitors and the threat of government intervention generally keep the likes of Apple, Amazon, Google and Facebook from expanding pell-mell into adjacent businesses. All of them have sprawled and overlapped mightily, but Amazon, with its forays into groceries, pharmacies, health care and more, might be the furthest along toward creating an inescapable commercial universe.
Still, with the European Union enacting tough new privacy laws, and some in the United States eager to follow, Google and Facebook could soon be forced to find ways to make money beyond selling users’ personal information to advertisers, said Raj Rajgopal, president of digital business strategy at Virtusa Corporation, a consulting firm.
“As profitability reduces, they’ll say, ‘Now I need to monetize my customer base,’” Mr. Rajgopal said. “The innovation we’re seeing in China could be seen in the U.S. in the next three to five years,” he added. “Customers are demanding that.”
China’s internet titans have a powerful ally found nowhere else, though: the Chinese government. Tencent and Alibaba have avoided antimonopoly clampdowns by staying in Beijing’s good graces, said Hu Wenyou, a partner at the Beijing law firm Yingke. Their sheer size also makes them easier for the authorities to control. They simply have too much to lose.
“If you can become so big, and so successful in so many areas, this in itself shows that you must have maintained very good, very friendly relations with the government,” Mr. Hu said.
Neither giant is done getting bigger.
Each has a market capitalization of close to $500 billion, making them among the most highly valued technology firms on the planet. Google and Facebook still claim more users, but the Chinese heavyweights arguably do more — and more, and more — for theirs.
They have both funded ventures that offer online education, make electric cars and rent out bicycles. For the giants, such initiatives represent new opportunities for people to use their digital wallets — Ant Financial’s Alipay and Tencent’s WeChat Pay — and new ways to collect data on consumer behavior. Analysts at Sanford C. Bernstein counted 247 investment deals by Tencent in recent years and 156 by Alibaba, though given the pace of the companies’ deal-making, they said their database was “likely to be perennially incomplete.”