Francesco Lontri

© 2020 All Rights Reserved

“The Fifth
Horseman”
Chapter:
1. Overview
2. Digital Knowledge Spread
3. The Four
4. “Any sufficiently advanced technology
is indistinguishable from magic”
5. Here it is: Amazon
6. (Jeff) Bezos vs (Jack) Ma
7. Alibaba: There is no one Best Way
8. Huawei: US-China Tech Rivalry
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1. Overview
Probably most of us had already seen or heard anything possible about the “Digital Reality” that is
nowadays shaping our society’s present and future, starting from his roots. The situation is clearly
turning around the usage of our personal data by Big Tech companies that are engaging us in a virtual
experience, every day more complex, that it is growing up with us by his constant application
throughout our time. Thus, our world Is flying towards a world-wide need of a spread digital
knowledge that would help the users (all of us) to start feeling familiar with these tech innovations and
aiming to a common orientation inside them. This need comes from everyone’s right to be aware of
what’s going on with the evolution of the personal human rights and with much more crucial personal
areas of the ones involved.
Everyone must reinforce an individual interpretation of the direction we are going to and which are
the core energies that are leading the 4th Industrial Revolution. Furthermore, finalized to defend my
skeptical thesis, I would like to ask you if anyone has never came to you, let’s say 20 years ago, asking
your democratic agreement for start tracking the entire of your life, including any kind of particular
like, behavior or thought that have passed through you. Or maybe if you mind that someone daily act
on you using such kind of private data collected from your life to lead you exactly where the cashflow
smell is bringing them. As they are there for all to see.
Unlucky, the reasons why all this is happening have to be searched among mainly economic planned
goals set from the drivers of this digital machine, that are swallowing up almost infinite profits from
2000s sources of wealth, such as Big Data, Algorithms, Artificial Intelligence and Cloud platforms
just for writing some of them. Several more billionaire (permanent) investments, by who is literally
connecting our planet data using transoceanic enormous internet cables. Here’s an earth map that allow
us to understand this paradoxical created circumstance, still a work in progress, began in the past ‘90.
Just imagine that there are huge metal cables below the oceans that are keep transferring our data,
without any planned end, encouraging every day the physical hyper connection of our world. With
some well-known Brands written on them, as you could notice while seeing them. And probably you
have also heard some of them. (livetradingnews, 2019).
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Who’s behind it? If not the 4 (5?) Horsemen treated by Scott Galloway in one of his masterpieces:
“The Four.” I will talk about them just after this brief digression into the sub oceanic cables, physical
pillars of the digital Dimension, still under construction, supporting the Internet spread.

“Three cables bear the Amazon name: Bay to Bay Express (BtoBE) Cable System, JUPITER,
and Hawaiki. The online retailer is a part owner of the former two and a major capacity buyer of the
latter.

Keep an eye out for the Jupiter cable, which will connect Asia and the U.S. in 2020. This cable will
stretch more than 14,000 km and is equipped to carry more than 60 terabits of data a second. (at the
end there will be a quick focus on the long-distance rivalry enforced between US & China).

JUPITER Consortium Members

 Amazon (Vadata, Inc.)

 Facebook ( Edge Cable Holdings USA, LLC, Edge Network Services Limited, Edge Network
Services Limited (Japan Branch))
 NTT Com (and NTT America）
 PCCW Global （HKT Global (Singapore) Pte Ltd）
 PLDT
 SoftBank

Facebook divides its ownership in JUPITER cable system into three portions, Portion in U.S.
Territorial Waters, Portion in International Waters, Portion in Japanese Territorial
Waters, which are owned by Edge Cable Holdings USA, Edge Network Services and Edge Network
Services Japan Branch respectively.”
As of March 2019, Facebook has an even longer list of cables thank Amazon, composed by even 10
different cables ownership.

Beyond being a part owner of JUPITER alongside Amazon, Facebook is in on the Havfrue cable—
one of the five cables we're watching in 2019. Havfrue will be supplied by Subcom and will be the
first trans-Atlantic cable to link Scandinavia to North America since the aging TAT-14 cable, which
entered service in 2001”.

Google logs a similarly lengthy list of cable projects as of 2019, reaching in January 2020 an amount
of cables owned of 14 components”. (TeleGeography, 2019)

2. Digital Knowledge Spread

One day maybe I will succeed to have a complete overview about this theme, so relevant for us in
order to be able to describe an overall summary of this sequence of international event as a way of
make it clearer and more understandable at the eyes of who still need to collect experiences in this
area. This could help other people to develop their own critical thinking (then translate in concrete
life’s decision) about the new reality they are supposed to live in; as I am trying to do during the first
years of university or Jobs experiences. However I had not yet finished my experiences in order to
reach an overall knowledge concerning the whole Online world that right now is spreading out to us.
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After these considerations I want to begin my work by analyzing focused key points regarding our
society’s evolution that I consider crucial to understand better these innovative ways that we are
adopting. Facing a so intricated reality, I decided to let my Essay be led by Scoot Galloway, a professor
at the Business Stern School University in New York. He is the writer of the book that most inspired
me during these first years of studying, allowing me to deal with developed mentalities and to pursue
personal (and professional) growth. “The four analyze the secret DNA of Facebook, Google, Amazon
and Apple”. Thanks to masterpiece he succeeds to express an extremely aware and deep thought
regarding the Big Tech companies that were mentioned before. Also, if it is not required, I really would
like to be into the digital reality logic as I am into the real life one and as Scott Galloway seems to be
at my eyes into the whole digital one. He has the full perspective of a world that lacks certainties or
appropriate supporting systems (like the juridical or financial ones), that still count several works in
progress from entities like EU, USA or CHINA governments. Unluckily for me it will be hard to give
a personal interpretation about this Professor’s masterwork, because it is so exhaustive in everything
he deals with; I still need to develop some inspirational viewpoints opened in my brain after this
reading and thus formulate my personal idea about. Therefore, as I stated, I will follow his storytelling
sequence, adding a fulfill part in relation with China’s retail giant Alibaba, which dwarfs Amazon
on many metrics. I took him and Huawei (just a little consideration at the end) as possible
substitutes of one between Amazon (don’t think so), Apple (Why not Huawei?), Google
(Baidu? Also, if it is stuck just in Chinese market) or Facebook (Instagram had tried…).

“For some time, we confused the word “Digital” with the word “Automatic,” emphasizing the myth
of the technology predominance on the humankind, of the instrument on the user. It’s not like this: our
choice that we will do as students, citizens, electors or consumers are going to shape the world. Reading
“The Four” let us understand the revolution we are living. This book tells the formidable intuition, the
incredible power and the collateral effects of Amazon, Apple, Facebook and Google. It became a must
for everyone to fully be into how these Big Tech companies are working and at which questions they
are replying. Not knowing their short but prosperous history is like ignoring the reality, and then
abdicating our role in the society. Giving away the research of a new needed balance.
Scott Galloway let us understand “The Four,” enter in Amazon’s storehouses and in Apple’s strategies,
crossing Facebook and Google, because he is interested in the future. He tried to get “The Four,” their
limits and the issues they pone, it means to take an aware decision for our own future, that it should be
a family or a company. Thanks to this tool’s box, reading the present is easier. We will not be surprised
of the fast evolution that will allow the birth of the Fifth Colossus and the sunset of one of the Four.
The evolution doesn’t ask for permission.” (Pagliaro, 2018)

This is a translated (by me) abstract from the Four’s preface at the Italian edition by Beniamino
Pagliaro.

As I stated above, I am going to follow the frame of Galloway’s work to let my essay be clearer and
to be sure of touching all the fundamental points of this Contemporary History. What makes the
difference in my case is that I will focus my written in just few chapters from The Four. Focusing the
attention to the details, I am going to give an attempt replying a cautious question posed by the author;
the issued point is: Could there ever be a Fifth Horseman (Giant Tech powerful as the other 4)? The
New York Professor evaluated in his book the possible candidates, from Huawei to China’s retail giant
Alibaba, which dwarfs Amazon on many metrics. Do any of them have really what it takes to
develop a more dominant platform? He partially gave an answer to this world-wide doubt, sharing
with us his expert perspective about the most likely dynamics that will be launched by the Four
between themselves and among their public. The 4 Big Tech are going to create, voluntarily or not,
different shaped alternatives for the time to come. Even more into each, my aim is to predict who, at
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the of the early 2020, have more chances to take a so desired position that would be recognized as one
of the most prestigious and profitable of the all-time. Hindsight at the end I will evaluate my humble
position that identify Alibaba as the highest-level 5° player in this game; furthermore, I point an
accusing finger at Apple/Google/Facebook to be the first Horseman to collapse as soon as the fifth will
reach his top performances condition, seeing as Amazon out of this consideration.

3. “The four”
“OVER THE LAST twenty years, four technology giants have inspired more joy, connections,
prosperity, and discovery than any entity in history. Along the way, Apple, Amazon, Facebook, and
Google have created hundreds of thousands of high-paying jobs. The Four are responsible for an array
of products and services that are entwined into the daily lives of billions of people. They’ve put a
supercomputer in your pocket, are bringing the internet into developing countries, and are mapping
the Earth’s land mass and oceans. The Four have generated unprecedented wealth ($2.3 trillion) that,
via stock ownership, has helped millions of families across the planet build economic security. In sum,
they make the world a better place.

The above is true, and this narrative is espoused, repeatedly, across thousands of media outlets and
gatherings of the innovation class (universities, conferences, congressional hearings, boardrooms).
However, consider another view. Imagine:

A retailer that refuses to pay sales tax, treats its employees poorly, destroys hundreds of thousands of
jobs, and yet is celebrated as a paragon of business innovation.

A computer company that withholds information about a domestic act of terrorism from federal
investigators, with the support of a fan following that views the firm like a religion.

A social media firm that analyzes thousands of images of your children, activates your phone as a
listening device, and sells this information to Fortune 500 companies.

An ad platform that commands, in some markets, a 90 percent share of the most lucrative sector in
media yet avoids anticompetitive regulation through aggressive litigation and lobbyists. This narrative
is also heard around the world, but in hushed tones.

We know these companies aren’t benevolent beings, yet we invite them into the most intimate areas
of our lives. We willingly divulge personal updates, knowing they’ll be used for profit. Our media
elevate the executives running these companies to hero status—geniuses to be trusted and emulated.
Our governments grant them special treatment regarding antitrust regulation, taxes, even labor laws.
And investors bid their stocks up, providing near- infinite capital and firepower to attract the most
talented people on the planet or crush adversaries. So, are these entities the Four Horsemen of god,
love, sex, and consumption? Or are they the Four Horsemen of the apocalypse? The answer is yes to
both questions. I’ll just call them the Four Horsemen. How did these companies aggregate so much
power? How can an inanimate, for-profit enterprise become so deeply ingrained in our psyche that it
reshapes the rules of what a company can do and be? What does unprecedented scale and influence
mean for the future of business and the global economy? Are they destined, like other business titans
before them, to be eclipsed by younger, sexier rivals? Or have they become so entrenched that
nobody—individual, enterprise, government, or otherwise—stands a chance? “
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This is where Amazon stands at the time of this writing: Shopping for a Porsche Panamera Turbo S or
a pair of Louboutin lace pumps is fun. Shopping for toothpaste and eco-friendly diapers is not. As the
online retailer of choice for most Americans, and increasingly, the world, Amazon eases the pain of
drudgery—getting the stuff you need to survive. No great effort: no hunting, little gathering, just (one)
clicking. Their formula: an unparalleled investment in last-mile infrastructure, made possible by an
irrationally generous lender—retail investors who see the most compelling, yet simple, story ever told
in business: Earth’s Biggest Store. The story is coupled with execution that rivals D-Day (minus the
whole courage and sacrifice to save the world part). The result is a retailer worth more than Walmart,
Target, Macy’s, Kroger, Nordstrom, Tiffany & Co., Coach, Williams-Sonoma, Tesco, Ikea, Carrefour,
and The Gap combined.

As I write this, Jeff Bezos is the third wealthiest person in the world. He will soon be number one. The
current gold and silver medalists, Bill Gates and Warren Buffet, are in great businesses (software and
insurance), but neither sits on top of a company growing 20 percent plus each year, attacking
multibillion-dollar sectors like befuddled prey.” (Galloway, 2018, pp. 1-4)

4. “Any sufficiently advanced technology

is indistinguishable from magic”
With the aim of carrying on heralding my thesis, I would like to translate in English from Italian, a
web article that I found during the materials research for developing this essay :“In the congested
reception of the one who was, till few days ago, the only huge Italian Amazon’s storehouse, a sign
shows the dress code for the workers. No wide suit, neither long scarf nor flying veil that could stuck
on the conveyor belt. No sandals or slippers which not correctly protect the feet. Nothing, and here it
is the proverbial diabolic detailed, neither beard longer than 5,6 cm nor heels below 2,5 and above 3,4
cm. Any other company in the world would has been immersed with the best will in this abyss of
exactness. But we are dealing with the most efficient shop in the planet that, putting aside each data
from our shopping attitudes, earns today half of the money that Americans spend online. And that
between 2015 and 2016 it has been watching his orders from 600 thousand to 1,2 million. A double
son of many fathers, first the absolute loyalty to the Third Arthur C. Clarke’s Law, the author of “2001:
A Space Odyssey”. That maxim extremely quoted is why:“ Any sufficiently advanced technology is
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indistinguishable from magic”. There must be something objectively unnatural behind the fact that,
pushing a digital imagine on the phone of any good, the next day (sometimes even the next hours) that
good will be materialized in your home.

[…] But the complete track from the seller to the buyer, it hadn’t been done by anyone, sworn by
international spokespersons. Nonetheless the report about the 22 hours that separate the moment when
my finger (the human connection with the digital world) presses the yellow button “Buy Now” from
the App, until the postman’s finger pushes your home’s silver-plated doorbell.

[…] Meanwhile in the United States the company announced that the Seattle’s headquarter will be
doubled and then moved to a still unknown location, to which it promised 5 billion investments plus
50 thousand working opportunities (Stonecrest in Georgia offered to be rebaptism as Amazon). It
doesn’t need to be Nostradamus in order to forecast the retail’s Apocalypse, as the shops end is called.
Just cast a glance to a One stop’s Internet graphic that, voice by voice (salaries, rents...), explain that
in a condition of same selling price an Online shop earns the double of a Traditional shop.”
(Staglianò, 2017)

What is loudly asking for your attention in the last translated article belonging to the Italian journalist
Tagliani? My focus goes involuntarily straight towards the Third Clark’s Law. Let’s read it once again
:” Any sufficiently advanced technology is indistinguishable from magic”.
British science fiction writer Arthur C. Clarke formulated three adages that are known as Clarke's
three laws, of which the third law is the best known and most widely cited. They were part of his ideas
in his extensive writings about the future. The 3 prominent laws are:

1. When a distinguished but elderly scientist states that something is possible, he is almost
certainly right. When he states that something is impossible, he is very probably wrong.
2. The only way of discovering the limits of the possible is to venture a little way past them into
the impossible.
3. Any sufficiently advanced technology is indistinguishable from magic.

Arthur C. Clarke was a scientist, science writer and author of science fiction stories and novels. This
quote of his reflects on the early beginnings of technology, through the early 2000s. […] Here you can
find an overview of some personal interpretations or real-life implications that these laws, particularly
the third one, had brought inside our society. These could help you to contemplate the contemporaneity
of Clarke’s statement. It allows you to focus on the key points of the nature around us, that normally
can be misunderstood by something else; misleading our inner reality’s construction.

The Three of them could be somehow summarized just in the third one, that should be seen as a
reinterpretation of the easy common principle:” You can’t know, if you can’t see.” Unluckily, this
forced condition is well-known by rulers or international overall authorities, that use it to create a kind
of auto-control beside a world population (clearly still ignorant about this delicate arguments),
misleading their thoughts and behaviors to prevent them from creating any unwanted issues in their
environment, like spreading a dangerous knowledge between their network.

As I, several variants of this quote exist nowadays, belonging to different authors that, unlikely Clarke,
had succeeded to deal with a real feedback about what is argued by the original law. I report you here
some of the one that I most like. Main Third Law derivates:
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1. Any sufficiently advanced act of benevolence is indistinguishable from malevolence;

2. Any sufficiently advanced cluelessness is indistinguishable from malice; (Clark's law)
3. Any sufficiently advanced incompetence is indistinguishable from malice; (Grey's law)
4. Any sufficiently crappy research is indistinguishable from fraud;
5. Any technology, no matter how primitive, is magic to those who don't understand it.

Leave the freedom to the interested reader of analyzing deeply the invisible repercussions of
these statements on manipulative attacks among the unaware population through all the era.

Let’s focus now on the first key players that I chose for this essay.

From “The Four” (Galloway, 2018):

“The Four are engaged in an epic race to become the operating system for our lives. The prize? A
trillion-dollar-plus valuation, and power and influence greater than any entity in history.

[…] To grasp the choices that ushered in the Four is to understand business and value creation in the
digital age. In the first half of this book we’ll examine each horseman and deconstruct their strategies
and the lessons business leaders can draw from them.

“[…] In the second part of the book, we’ll identify and set aside the mythology the Four allowed to
flourish around the origins of their competitive advantage. Then we’ll explore a new model for
understanding how these companies exploit our basest instincts for growth and profitability and
show how the Four defend their markets with analog moats: real-world infrastructure designed to
blunt attacks from potential competitors.

What are the horsemen’s sins? How do they manipulate governments and competitors to steal IP?
Could there ever be a Fifth Horseman? We’ll evaluate the possible candidates and try to provide
answers.

At the beginning and end of every course at NYU Stern, I tell my students the goal of the course is to
provide them with an edge so they too can build economic security for themselves and their families.
I wrote this book for the same reason. I hope the reader gains insight and a competitive edge in an
economy where it’s never been easier to be a billionaire, but it’s never been harder to be a
millionaire”.

Now we will go behind the scene, analyzing Amazon main Business strategies and then use these
collected information in order to draw the skeleton of Alibaba , his critical Business Ideas, and how
it could be profitable as the other, even from a viewpoint acting as the best at all. Leading his war in
a different battlefield, against the same players and obtaining the same results of the Bezos’s squad.
But in the other side of the world, the Chinese headquarter is headed by Jack Ma, an oriental,
unconventional, successful leader.

5. Her it is: Amazon

“[…] FORTY-FOUR PERCENT OF U.S. households have a gun, and 52 percent have Amazon
Prime. Wealthy households are more likely to have Amazon Prime than a landline phone. Half of all
online growth and 21 percent of retail growth in the United States in 2016 could be attributed to
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Amazon. When in a brick-and-mortar store, one in four consumers check user reviews on Amazon
before purchasing.”

Stating that Amazon have the weapons for winning this world can be cheating, if not analyzed from a
concrete perspective or if are not took under consideration some features not visible from a first
unexperienced view. Of course, I am talking about considerations as the Galloway’s one:” I, on the
other hand, would argue that the real reasons Amazon is kicking the collective asses of its
competition—and its likely Ascent to a trillion dollars in value—are different. Like the other Four,
Amazon’s rise rests on its appeal to our instincts. The other wind at its back is a simple, clear story
that has enabled it to raise, and spend, staggering amounts of capital.”

“[…] Hunting and gathering, humanity’s first and most successful adaptation, civilization is little
more than a recent blip. Instinct is a powerful chaperone, always watching and whispering in your
ear, telling you what you must do to survive. […] Our hunger for more stuff hasn’t adjusted to our
limited closets and wallets, either. […] Instinct, coupled with a profit motive, makes for excess. And
the worst economic system, except for all the rest—capitalism—is specifically designed to maximize
that equation. Our economy and prosperity are largely predicated on others’ consumption.”

[…] E-commerce firms die with a whimper, not a bang, because while brick-and-mortar retail has a
face, e- commerce deaths are faceless and not as jarring. One day that website you regularly visited
just isn’t there—so you find some other site and never look back. Dead man (retailer) walking begins
with margin erosion—the cholesterol of retail—and ends with endless promotions and sales. You can
buy a little time with sales, but the story almost always ends badly.”

(Galloway, 2018)

6. (Jeff) Bezos vs (Jack) Ma

“[…] Jeff Bezos happened more to retail than retail happened to Jeff Bezos. In each of the preceding
eras of retail, there were brilliant people who tapped into a shift in demographics or taste and created
billions of dollars in value. But Bezos saw a technological shift, then used it to reconstruct root and
branch the entire world of retailing. E-commerce would be a shadow of itself, had Bezos not brought
his vision and focus to the medium. In the 1990s, e-commerce was a shitty, unrewarding business for
almost every pure-play firm (it still is). The key to success in e-commerce wasn’t execution but
creating hype around a company’s potential, and then selling it to some rich sucker before the house
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of cards caved in. The most current example is flash sale sites—sites that promised amazing deals
but only at unspecified times. The press went wild. See a pattern? Hype does not equal sales.

[…] Retail may have never been, on a risk-adjusted basis, a good business. But it was markedly less
awful before Seattle’s great white shark of retail showed up and began eating everything. […] The
difference this time is that this value has been created with unprecedented speed by a single
company, because, being virtual, Amazon can scale to hundreds of millions of customers, and scale
across almost every retail industry, without the traditional drag of having to build brick-and- mortar
stores and hire thousands of employees. On Amazon, Bezos realized, every page can be a store and
every customer a salesperson. And the company could grow so fast that there wouldn’t be any
corners left for competitors to carve out a niche.

“[…] Without capital-hungry stores, Bezos could invest in automated warehouses. Scale is power,
and Amazon was able to offer prices no brick- and-mortar retailer could afford. He offered deals—to
loyal customers, to authors, to delivery companies, to resellers agreeing to run ads on their own
websites. He drew more and more partners to Amazon. Bezos broke out of the narrow world of
books and DVDs and into ... everything. This kind of experimentation and aggression is what the
military calls the OODA loop: “observe, orient, decide, and act.” By acting quickly and decisively,
you force the enemy—in this case, other retailers—to respond to your last maneuver as you’re
entering the next one. In Amazon’s case, this was done with a ruthless focus on the consumer.

[…] In 2016, Amazon was considered America’s most reputable firm”. (Galloway, 2018)

Just have a look at these smiles. In 2006.

“[…] Former vice president Porter Ehrisman, who worked at the company for 8 years, can still
remember the day he realized how big a deal Alibaba was going to be.

It was November 7, 2006, he writes in his new book "Alibaba World," and company founder Jack Ma
was giving a speech at a conference in San Francisco.

Known for his enthusiastic speeches and colorful quotes, Ma described himself as "like a blind man
riding on the back of a blind tiger," since he founded a technology company without knowing anything
about computers.
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But he also added one piece of advice that apparently ended up being very influential to Amazon CEO
Jeff Bezos.

"Believe in your dreams, find good people, and make sure the customer is happy," Ma said. "I see a
lot of US companies sending professional managers to China. They are making their boss in the US
happy, but not the Chinese customer."

Ehrisman says he couldn't believe his eyes when he noticed Bezos sitting in the back of the auditorium,
furiously writing down what Ma was saying. Alibaba had long admired Amazon and Bezos and had
adopted some of the American company's ideas.

The two founders ended up meeting after the presentation to chat briefly.

"You made some great points up there, Jack!" Bezos told Ma.

It became clear exactly how good Bezos thought those points were seven months later when Erisman
read a Wall Street Journal article where, in an interview, Bezos described how he would avoid the
problems other tech companies had faced in China. (Quora, 2006)

Abstract from a world social platform called Quora where everyone has the authorization to ask any
kind of question to the platform audience, available to share his opinions. University Professors from
all over the world, scientists, researchers, traders, politicians or programmers are some of the users
that could advice you a good solution to your problems. In my opinion, A digital tool extremely useful
and out of the imagination till years ago for any university student that could help you to incredibly
open your mindset’s contents. Although could create confusion and over information if misunderstood
the right application of the user.

“[…] With retail growth essentially flat across the American economy, Amazon’s growth must be
coming from somewhere. Who’s losing? Everyone. The graph below, describing ten -year stock
appreciation of major U.S. retailers (2006–2016), says it all:
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“[…] Traditionally, stocks in the same sector trade sympathetically—in lockstep with one another.
No more. The equity markets now believe that what’s good for Amazon is bad for retail, and vice
versa. It’s a situation almost unique in business history. And it has become a self-fulfilling prophecy,
as Amazon’s cost of capital declines while every other retailer’s increases. It doesn’t matter what the
reality is—Amazon will win, as it’s playing poker with ten times the chips. Amazon can muscle
everyone else out of the game.

The real handwringing is going to begin when people start asking if what’s good for Amazon is bad
for society. It’s interesting to note that even while some scientists and tech tycoons (Stephen
Hawking, Elon Musk) publicly worry about the dangers of artificial intelligence, and others (Pierre
Omidyar, Reid Hoffman) have funded research on the subject, Jeff Bezos is implementing robotics
as fast as he can at Amazon. The company increased the number of robots in its warehouses 50
percent in 2016”. (Galloway, 2018)

7. Alibaba: There is no one Best Way

Let’s pass to the. Belonging from a Jack Ma’s interview, I report a state supporting his Leading
Business Ideas, that counterpose him to the so venerated Jeff’s Bezos planification.

“I based this claim leadership Motto of contingency theory – an approach to managing that seems to
represent the current state-of-the-art in management and organizational theory.[1] For those of you
who are unfamiliar, it is a view of managing that might be summed up as follows:
“There is no one best way of organizing. The appropriate form depends on the kind of task or
environment with which one is dealing.”
In other words, when it comes to how to best manage a business, a contingency theorist would argue
quite simply that “it depends” on the circumstances.”
I took this aforementioned info from a website source called “Insubordination, a (mis)management
blog. (Blog, 2016)
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How does their business models differ so far? How can they both be driving at the top, although
applying so different business strategies to rule in their market? Are they actual playing in 2
completely different environments?

Amazon: Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in
North America and internationally. It operates through the North America, International, and
Amazon Web Services (AWS) segments. The company sells merchandise and content purchased for
resale from vendors, as well as those offered by third-party sellers through retail Websites

Alibaba: Launched in 1999 from Jack Ma in China, Alibaba.com is the leading platform for global
wholesale trade. We serve millions of buyers and suppliers around the world. As part of the Alibaba
Group, our mission is to make it easy to do business anywhere.

We do this by giving suppliers the tools necessary to reach a global audience for their products, and
by helping buyers find products and suppliers quickly and efficiently. As a platform, we continue to
develop services to help businesses do more and discover new opportunities. Whether it’s sourcing
from your mobile phone or contacting suppliers in their local language, turn to Alibaba.com for all
your global business needs.

From the moment that till now I spent most of my words acclaiming Jeff Bezos’s world-wide used
revolutionary systems belonging to his innovative vision, now I would like to introduce you an
Equivalent, Reverse, Business Strategy offered by the Chinese Giant Retail Alibaba and Jack Ma.

“Alibaba vs Amazon are two giants competing against each other to be the global leader in the e-
Commerce industry.

Alibaba is a marketplace, which dominates the Chinese consumer retail industry. They do not own the
inventory of the merchandise sold and merely connects buyers and sellers together. On the other hand,
Amazon is a re-seller which owns inventory and supply chain of its merchandise and sell directly to the
customer. In this article, I’m going to reveal the factors that makes these 2 outstanding businesses so
different and how they are likely to grow in future.

At the time of this writing, Amazon is the world’s biggest e-commerce company with a market
capitalization of USD 800 billion — Alibaba is twice as small. Both are leaders in their respective
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markets (Amazon in the U.S. and Alibaba in China) and are quickly expanding their empires into new
businesses such as groceries and cloud. However, the difference is that Chinese consumption presents
an opportunity for tremendous growth thus, investors see Alibaba as a proxy for it.

Both Alibaba and Amazon’s business models aim to provide ease of transacting and connecting
consumers and merchants. However, both have unique methods in which they go about executing this
strategy because of the different environments in which they operate.

Amazon’s revenue from core business includes online and physical stores, third-party seller services,
subscription services, and advertising. For Alibaba, revenue includes core commerce, digital media and
entertainment, and innovation initiatives. Both companies are investing in new segments like online
subscription services (streaming music and video) that have yet to make profits but are fast-growing
businesses with big potential for the future.

Both companies have their own ecosystem and a web of businesses that complement their core
operations (eCommerce). However, in this article, the aim is to understand how different these 2
eCommerce giants operate and why they are unlikely to impact each other. Therefore, I will only discuss
the eCommerce segments of these businesses.

[…] When Amazon first started in the mid-90s, Bezos had a tough time convincing large retailer to join
Amazon’s marketplace. To the extent that Amazon became a direct retailer itself. The company began
with books and eventually invested capital to develop a unique fulfillment strategy — and the rest is
history.

Alibaba, on the other hand created a business model that is surprisingly different from
Amazon’s…Unlike Amazon which operates as a single unit, Alibaba is divided into three core
businesses: Alibaba, Taobao, and Tall. These websites provide a platform for various types of
consumers and merchants to transact products, making Alibaba as one of the largest middlemen in
China’s e-commerce industry. Alibaba’s Taobao division is where they make most of their money, is
responsible for more than 80% of Alibaba’s sales and consists of two main segments:

 The Taobao Marketplace (like eBay) — allows consumers and small businesses to list
merchandise for sale.
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 Taobao Mall is like Amazon. It’s a B2C platform that allows larger businesses and brands to sell
directly to consumers.

Alibaba acts as a middleman between buyers and sellers online and facilitates the sale of goods
between the two parties through its extensive network of websites. Taobao’s sales make up more than
80% of all online purchases in China. Unlike Amazon, Alibaba operates with an asset-light model and
merely facilitate transactions. They manage the marketplace and charge a small fee, but don’t hold —
or sell — any merchandise themselves. This allows them to operate as a fee-free marketplace where
neither sellers nor buyers must pay a fee on transactions. Rather, the nearly 7 million active sellers on
Taobao pay to rank higher on the site’s internal search engine, generating advertising revenue for
Alibaba that mimics Google’s core business model. Only after Taobao reached scale did Alibaba
begin to shift its focus to fulfillment and logistics. While Taobao appeals more to smaller merchants,
Alibaba also has a dedicated segment for larger retailers. Tmall is the eCommerce site that caters to
well-known brands, including Zara, Nike and Hugo Boss. Despite its smaller network of active
sellers, Tmall can generate revenue from deposits, annual user fees and sales commissions charged to
retailers utilizing the site. China’s consumer economy only began in the early 2000s, and it was also
in that period when Alibaba came into existence. As the economy was still in its primitive stage, there
weren’t many established retailers, distribution networks were inefficient, and household income was
low by global standards. In addition, competition was low, which meant that it was easier for Alibaba
to create a new ecosystem of eCommerce retailers by providing them with a platform to offer goods.
Today, we are beginning to see the effects of Alibaba’s dominant and superior business model. Its
eCommerce segments have a vastly higher operating margin, a far lighter supporting infrastructure,
and is less capital intensive. Furthermore, with such a model, Alibaba can list more products than
Amazon, giving consumers a wider variety of choices. Expansion into new markets is relatively quick
and easy, without the need to build up infrastructure. Thus, generating excess returns and higher
ROIC. As such, my preference over the long run would be in Alibaba.

To have the choice whether to see if Amazon, Alibaba or both have the best possible strategy to apply
in their respective market, you will just need to be updated with the market’s voices about them; I bet
that we will not spend much time waiting to have a final (or just partial) winner from this digital
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battle. We will see if Bezos’s heavy asset business model mixed with the acquisition of the whole
supply chain will have better long implications than empowering each element of the considered
supply chain, allowing all of them to save their independency and to grow up till become the most
efficient, spread and competitive Business in the planet”. (Medium, 2019)

8. Huawei: US-China Tech Rivalry

The same game, The Sixth Horseman or Huawei: Asia braces for an age of US-China Tech Rivalry

While time passes, US and China are keep playing a long-distance tech match that is endlessly
fomenting their rivalry. The 2 big international players have been playing more and more at the fulcrum
on any kind of global connection between any other digital participants during the past 20 years.

“The US and China are engaged in a bitter fight over Huawei, the Chinese telecommunications giant.
The US has blocked Huawei from its markets and is restricting its access to US technologies and
suppliers that have helped it become one of the great world companies. China has responded by
threatening to introduce measures against US companies in retaliation and accelerating its domestic
program to build sophisticated semiconductors to ensure that its companies cannot be blackmailed or
crippled in the future. On the surface, this seems like another fight over trade. Yet it goes much
deeper and is a sign of a stark transformation in global politics. America’s problems with Huawei
have little to do with US President Donald Trump’s obsession with the terms of trade. Long before
Trump was elected, US officials were warning about Huawei, and trying to frustrate its rise. 1 Indeed,
Trump’s single-minded view of trade as the problem may lead him to swap a freer rein on Huawei
for other concessions, frustrating his own national security officials”.

(Asia, 2019)
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