Alibaba

[Wildreamz]

You may have a point. But it does appear that for a platform business to be successful, to create the self-reinforcing virtuous cycle between Merchant and Consumer, the platform needs a majority market share.

Think PropertyGuru, Grab, ComfortDelgro (back in those days) in SG, Amazon in US, Didi, Meituan in China.

Although businesses generally benefit from scale (economies of scale), not all business require absolute majority market share to succeed (some exceptions, network effect companies such as social media, sharing economy business such as Airbnb; I'm not even sure if ride-sharing apps really has strong network effect).

Case in point, if either Meituan or Ele.me holds 90% market share, it will probably be regulated like a utility ("cost-of-service" regulations etc.). Neither wants that.

Personally think Alibaba is choosing it's battles (ie not prioritizing market share) and will likely continue to succeed long-term. 

Actually with the recent crack down of new Chinese listing overseas; paradoxically, I think it may even benefit larger, more established, profitable, Chinese companies like Alibaba, as it cuts off it's smaller competitors' access to new capital (can't IPO easily in the US, VCs can't "exit" easily); in fact, I think these startups would more likely be acquired by Alibaba/Tencent etc. at a discount now.

Peace.