text: Lessons from Baidu, Alibaba, Tencent and JD.com for Australian business | afr.com
  Mar 7 2018 at 3:00 PM
  Updated Mar 7 2018 at 3:00 PM
  Lessons from Baidu, Alibaba, Tencent and JD.com for Australian business
  Victor Tseng, vice-president of China's 150-million-user travel booking site CTrip, says 80 per cent of transactions through the platform are now made on mobile devices. Louie Douvis
  Australian start-ups are destined to play only a bit part in Asia's exploding ecommerce markets, as a handful of Chinese giants build ecosystems with a stranglehold on most transactions in the region, the Australian Financial Review Business Summit has been told.
  The so-called "BAT" companies Baidu, Alibaba and Tencent – best known for search engines, ecommerce and messaging respectively – now also account for 42 per cent of annual Chinese venture capital investment as they clean up competitors throughout the region, McKinsey Global Institute director Jonathan Woetzel has said during a panel on Asia's digital landscape.
  By comparison, only about 5 per cent of venture capital investment in the US is made by the FAANG group of Facebook, Amazon.com, Apple, Netflix and Google parent Alphabet.
  "Each of these Chinese giants has created their own ecosystems, super-apps, that allow their customers to order taxis, order food, watch a movie, pay for anything, a breadth that would be covered by 10 or 15 apps elsewhere," Mr Woetzel said.
  "The only comparable thing in the West is Apple's ecosystem."
  A handful of Australian start-ups such as cross-border payments provider Airwallex and fast fashion e-tailer Grana have secured "BAT" backing to date, but Mr Woetzel foreshadows more to come.
  "Their proposition is access to 1.3 billion consumers in China and another 600 million across south-east Asia so it's pretty compelling," he said.
  Another opportunity for Australian business is to ride piggyback on the BAT companies' infrastructure to sell in the region.
  McKinsey 's Jonathan Woetzel says Baidu, Alibaba and Tencent account for 42 per cent of annual Chinese venture capital investment. Louie Douvis
  Australia is the fifth most popular source of products bought on JD.com, China's second-largest ecommerce company, according to its regional manager of Australasia, Patrick Nestel.
  The opportunity to learn from the innovations of the Chinese digital groups should not be underestimated, he added, pointing to JD.com recently joining the BAT trio's push into bricks-and-mortar supermarkets.
  "You hear about the Australian department stores struggling with turnaround strategies, we've got the luxury of merely applying the data-driven decisions we're already making into the offline world," Mr Nestel said.
  Hands-free supermarket trolleys are one manifestation of this strategy at JD.com's new 7Fresh supermarket in Beijing. Shoppers scan a QR code and put on a wristband to activate the trolley that follows them around, and purchases are also tracked to produce valuable data, he said.
  Chinese consumers were more mobile-savvy than they were sometimes given credit for, added Victor Tseng, the vice-president of CTrip, which commands 70 per cent of China's travel booking market and claims 150 million active users.
  Mr Tseng says CTrip is the world's most mobile-centric travel booking platform, with 80 per cent of bookings now coming through mobile devices.
  "Chinese outbound travellers made 130 million trips in 2017, and this still only drawn from 10 per of China's population. The travel operators in Australia must look at how to streamline the experience for them as much as possible," he said.