Lei Feng Network News reported recently that "Fortune" magazine in the United States has unveiled its 2017 list of the world's top 500 companies. Both Alibaba Group and Tencent Holdings Limited made the cut. This marks Ali and Tencent as the latest Internet companies to join the prestigious list after JD.com.
Last year, JD.com topped the list with a revenue of $28.847 billion, securing the 366th position. Tencent and Alibaba narrowly missed out. That year, a total of 110 Chinese firms made the list. The State Grid Corporation ranked second with $329.601 billion in revenue, while Huawei came in at 129th with $62.852 billion. Lenovo ranked 202nd, and Vanke and Evergrande made their debut at positions 356 and 496, respectively.
This year, the total number of Chinese companies on the list rose to 115. The State Grid retained its second-place ranking, and other firms saw improvements. Huawei climbed to 83rd place, entering the top 100 for the first time. JD.com moved up to 261st, Vanke to 307th, and Evergrande to 338th. Among the newcomers, Alibaba and Tencent stood out the most.
Alibaba ranked 462nd with a revenue of $23.517 billion, while Tencent ranked 478th with $22.87 billion. Walmart took the top spot for the fourth consecutive year among foreign companies, followed by Apple at No. 9, Samsung at No. 13, and Amazon, Google's parent company Alphabet, and Microsoft at Nos. 26, 65, and 69, respectively.
Facebook, which entered the list this year, ranked 393rd. Alibaba and Tencent's impressive revenue performance over the past year made their inclusion in the Fortune 500 a foregone conclusion. With the addition of Alibaba and Tencent, there are now six Internet companies among the top 500 globally, with China and the United States each accounting for three.
The ranking of the Fortune 500 is not absolute authority. While the rankings don't necessarily indicate one company being stronger than another, the inclusion of Alibaba and Tencent highlights the rapid growth of Chinese Internet firms. Both companies are expanding internationally and aiming to compete with global Internet giants.
Alibaba's mission is to "make it easy to do business anywhere," and domestically, it has revolutionized traditional business models. Online commerce has significantly impacted offline businesses. According to Alibaba's earnings report, the group's fiscal year 2017 revenue totaled 158.273 billion yuan, representing a 56% increase from the previous year.
China's retail platform GMV increased by 22% to 3.767 trillion yuan, with Tmall's GMV rising by 29% to 1.1565 trillion yuan. Core e-commerce business revenue grew 47% year-over-year to 31.57 billion yuan. Mobile Taobao has strengthened user engagement, and promotional events like Double 11 continue to set new transaction records. To maintain quality-conscious users, 75% of the Forbes Global 100 Most Valuable Consumer Brands are available on Tmall.
Internationally, Alibaba experienced strong growth in the fourth quarter, with revenue from international retail e-commerce increasing 312% year-over-year. This growth was fueled by Alibaba's acquisition of Lazada and the success of AliExpress. Combined annual active buyers for Global AliExpress and Lazada reached 83 million. Additionally, Alibaba launched the first eWTP project hub in Malaysia, laying the groundwork for long-term international expansion.
Alibaba's cloud computing, digital media, and entertainment businesses also boast substantial paying users and revenue growth.
Tencent has been thriving as a gaming giant, with online games contributing significantly to its revenue. In 2016, Tencent's total revenue reached 1,519,938 million yuan ($21,903 million), a 48% increase from the previous year. Operating profit rose 38%, and annual profit increased 42%.
Online game revenue surged 16% to 18,469 million yuan, driven by popular titles like "King of Glory," "Sky Dragon," and "Naruto." "King of Glory" particularly excelled, with daily active users exceeding 50 million by the end of 2016.
Beyond games, WeChat and WeChat Mini Programs' combined monthly active accounts reached 889 million, a 28% increase. WeChat Moments contributed to advertising revenue, as did Tencent Video's over 20 million paying users. QQ subscriptions also grew, and news clients boosted Tencent's advertising revenue. Cloud service revenue doubled, and payment services achieved higher merchant penetration.
In its global expansion strategy, Tencent invested in Supercell and Paradox and released several self-developed mobile games in Southeast Asia. Registered value-added service accounts increased by 16%.
Recently, Tencent Cloud's data center in Frankfurt, Germany, opened, and plans to expand further with five new overseas data centers in 2017, including Silicon Valley and Hong Kong. Tencent Cloud has already deployed data centers in Hong Kong, Toronto, and multiple overseas cities.
Tencent's global push presents both opportunities and challenges. Facing a formidable competitor like AWS, Tencent Cloud can leverage cost-effective and reliable services. This could drive another round of growth for Tencent this year.
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