Image source @ Visual China
Text | Shenrancaijing, author | Dawn, edited by | Wei Jia
In the past five years, there have been two important years for the Chinese Internet. One is 2018, the year the golden age of entrepreneurship ended; the other is 2021, when the Internet giants collectively suffered setbacks.
December 31 put an end to the capital market in 2021. The list of China's top ten listed Internet companies has not changed much compared to 2020, but the market value has evaporated by nearly $800 billion.
Source / Oriental Wealth Choice Data as of December 31, 2021
Tencent is still sitting in the top spot; Ali, in second place, fell from a volume of 600 billion US dollars to 300 billion US dollars; Meituan retained the top three, but its market value was surpassed by the Ningde era; Pinduoduo and Xiaomi fell out of the 100 billion US dollar camp and lost to PetroChina; Xiaopeng Automobile entered the top ten for the first time; Didi, which was listed in 2021, was not on the list at all.
The old glory of the Internet giants is no longer the same, but instead, hard technology has received unprecedented attention, and new car-making forces have risen against the trend.
People have invented many words to describe the pattern of the Internet in China.
From the bat (Baidu, Ali, Tencent) in the world, to the table (Baidu, Ali, Tencent, Xiaomi, 360) that competes for dominance, to the rapidly rising small giant TMD (Toutiao, Meituan, Didi), and then Baidu fell behind, meituan became AN ATM (Ali, Tencent, Meituan), and AT (Ali, Tencent) that has been maintained for a long time.
But looking back on 2021, we can't find a suitable word to describe the current pattern.
Under the wrapping of capital, a few years ago, the context of the giants was competition, it was "war, just war", under the anti-monopoly and a series of supervision in 2021, the giants learned to keep a low profile and convergence.
Being too big to fall is a thing of the past. Only after being beaten by reality, the giants know how many pounds they have.
The impact of 2021 on the Chinese Internet will be more profound and long-lasting than many people think, which is the year when the rules of the game are rewritten and the year when the Iron Throne of the Internet falls.
Some people fall, some people go out
The traditional Internet landscape is disintegrating.
There are some giants that have fallen, fallen, and not fully stood up in 2021, such as Meituan.
Meituan was the fastest runner in previous years and the one that hurt the most. From takeaway riders trapped in the algorithm, to merchants jointly suing for commission reductions, to riders' social security problems are difficult to land, these problems are like three mountains, which will overwhelm the US group in 2021.
Meituan is the second Internet giant to encounter anti-monopoly after Ali. Meituan's market capitalization fell from a peak of $340 billion in 2021 to $177.3 billion at the end of the year.
Meituan, which struggled to turn a profit in 2019, has been losing money throughout 2021, and the amount is getting bigger and bigger, and it has now lost four consecutive quarters. In October 2021, Meituan was fined 3.442 billion yuan by the regulatory authorities.
Source / Meituan Earnings Report
After rectification, meituan's business can still be played, and the capital market is still optimistic. But if the three mountains cannot be crossed, the US group will not be able to land safely.
Also falling in 2021 is the shell. Shell was once highly expected by the capital market, and when it was listed in August 2020, shell's market value surpassed that of Vanke, a leading real estate stock. At the end of 2020, Shell ranked eighth among China's listed Internet companies with a market capitalization of US$72.9 billion.
The real estate industry ushered in a downward cycle in 2021, and a number of housing enterprises represented by Evergrande thundered, and trillions of dollars of debt made the industry stunned. In this context, it is difficult to stand alone with the shells that are close to the real estate industry.
In addition, Shell founder Zuo Hui died in 2021, and Shell also encountered muddy water shorting near the end of the year. Shell was once one of the top ten Internet companies in 2020, but it dropped out of the list in 2021.
However, for those giants who have fallen, as long as they live, as long as the fundamentals of the business have not changed, there is still a chance to get up.
There are also some giants that have fallen off the altar in 2021 in a variety of different postures.
The most typical is Ali. In fact, since 2014, China's Internet has been an AT pattern, Ali and Tencent occupy the top, the market value far exceeds other companies, the two are long and weak, biting very tightly. And in many cases, Ali's market value is higher than Tencent's.
Tencent Ali's past market capitalization comparison data source / Oriental Wealth Choice
But the end of 2021 means the collapse of this pattern. Ali's market value shrank to $322 billion, a difference of three Pinduoduoduo from Tencent, which has never been seen in the past few years. In addition, Ant Group's listing failed, the valuation shrank again and again, and the depreciation of employee options accelerated.
Pinduoduo's fall is quiet. At the end of 2020, Pinduoduo ranked the fourth largest Internet company in China with a market value of $220 billion, and only $3.5 billion different from the third-place Meituan.
After the release of the third quarter of 2021 financial report, people suddenly found that the growth of Pinduoduo will also peak, and the high valuation supported by the market dream rate will eventually face a test. That night, Pinduoduo's shares fell 16%. From the highest point in early 2021 to the end of the year, The market value of Pinduoduo has fallen by 70%, which is no longer enough for hundreds of billions of dollars.
Duan Yongping also said in December of that year, "I have never understood its business model." "In the era of crazy expansion, Pinduoduo is the fastest rising, but when the mud and sand are down, it is also the most miserable.
Duan Yongping snowball remarks
As for Baidu, it has fallen behind two years ago, and has been surpassed by Meituan, Pinduoduo, JD.com, etc., barely staying in the top ten lists of giants, but it is almost impossible to return to the top three.
There are also some giants that can be described as "demise".
There are two companies that have completely disappeared from the list of giants in 2021, and they are Good Future and New Oriental. At the end of 2020, in the list of Market Value of Chinese Internet companies, Good Future ranked 12th, and New Oriental ranked 18th. In the three years from 2017 to 2019, Good Future has been in the top ten.
After the "double reduction", a hundred billion market collapsed, and the giant completely disappeared. At the end of 2021, the market capitalization of Good Future and New Oriental will be $2.5 billion and $3.5 billion, respectively.
Didi, which was once domineering and exposed, has a market value of only $24 billion after the listing of the US stock market, ranking behind Weilai, Xiaopeng and Ideal. It's hard to imagine that this is a travel giant that burned tens of billions of yuan. After being subjected to security review, the Didi APP has not yet been re-listed.
There are also some small giants, such as iQiyi, which have lost a decade since their establishment. The 2021 idol talent show was announced to be cool, the advanced on-demand was canceled, and there was no dawn of profitability in the short term, and iQiyi's market value fell by 84%. There is also a cross-border Internet brokerage Futu, which was accused of "driving without a license" in 2021, facing compliance risks, in addition, the overseas listing of enterprises has slowed down, and securities companies have sat on the cold bench. Its market capitalization fell from $25.9 billion to $6.3 billion in 2021. The company's fundamentals have changed, and the high-valuation mirage has been shattered.
For many Internet giants, 2021 is a year of value revaluation and pattern reshaping. Falling, getting out, a lot of things can never go back.
Some rise, some low-key
There are still companies expanding, climbing up. For example, new forces in car-making.
In 2021, the monthly delivery volume of Weilai, Ideal and Xiaopeng has been rising steadily, exceeding 10,000 in November and setting a record in December.
The performance of high-speed growth has led to an increase in stock prices. In 2021, the ideal market capitalization increased by 27%, and Xiaopeng increased by 31%, which is unique among Chinese stocks. Weilai sat firmly in the top ten positions of the giant's market capitalization, and Xiaopeng was on the list for the first time, ideally ranking 12th.
The Ningde era, which provides batteries for these car companies, is even more proud, becoming the first trillion-dollar market value company on the ChiNext board in 2021, known as "Ning Wang". In terms of market capitalization, this battery manufacturer surpasses all car companies in China, surpasses JD Pinduoduo, and also surpasses Meituan.
The new energy track they are in is the hottest track at the moment.
This can also be seen from the business layout of the giants. Among the top ten listed Internet companies by market capitalization, three of them personally built cars (Xiaomi, Baidu, and Weilai), and three invested heavily in car companies (Tencent, Ali, and Meituan).
It is necessary to have scientific and technological content and put an end to the disorderly expansion of capital, which is the biggest reality in front of the Internet giants.
Since the second half of 2021, Internet giants accustomed to platform play have begun to shrink. The fiery community group buying war has cooled down, small players are out, and the remaining giants have truceed, and Didi has a loss of 20.8 billion yuan for Orange Heart In the third quarter.
The two choices that made the merchants miserable stopped, the price war boycotted by the small merchants and vendors stopped, and the training class for the parents' chicken dolls was also stopped. The giants also understand that the US stock market is no longer the optimal solution, and Hong Kong stocks have become a new choice. In 2021, with Baidu's second listing in Hong Kong, the BAT Big Three successfully met in Hong Kong stocks. In addition, a large number of Chinese stocks have been listed secondarily or dually in Hong Kong stocks, such as Ctrip, Station B, Autohome, Weibo, Xiaopeng and Ideal.
Internet giants pay more attention to macro policies, and at the same time, the big guys at the helm of the giants have become more low-key.
In March, Huang Zheng resigned as chairman of Pinduoduo, and was succeeded by co-founder and CEO Chen Lei; in May, Zhang Yiming stepped down as CEO of ByteDance and co-founder Liang Rubo took over; in September, JD.com announced that JD Retail CEO Xu Lei was promoted to president of JD.com Group, becoming a veritable second-in-command.
After the success of the success, the big guys either sincerely or falsely retreated, deliberately escaping from the spotlight.
Throughout 2021, there will be fewer big guys who openly express sharp views. A few years ago, the big guys wuzhen night banquet, talking and laughing, has become history.
After being anti-monopoly, Wang Xing set his "back garden" - rice no account to be visible for only three months. Over the past few years, Wang Xing has accumulated more than 20,000 dynamics on the meal, and now he is beginning to control his desire to express.
After the release of the second quarter financial report of the Meituan at the end of August, Wang Xing released a dynamic in the circle of friends instead of the meal, saying that there are two words in the name of the Meituan, "beauty" means "good", "tuan" means "together", "common", so "beauty" and "tuan" together is "better together", that is to say, "common prosperity" itself is rooted in the genes of the US group.
Wang Xing's circle of friends
After Wang Xing's explanation, Yao Jinbo, the founder of 58 Tongcheng, also sent a circle of friends: "58 Tongcheng is indeed from: we send together and get rich together." Then he added: "The main business is indeed to serve the people." ”
It's a very innovative and well-regulated explanation.
The signal conveyed by the words of the big guys is actually very obvious. This shows that the giants have recognized the reality and found their own positioning.
In 2022, what is the Internet fighting for?
For more than a decade, domination has been the goal of most Internet companies. The Internet industry is winner-take-all, the Matthew effect is obvious, only into the top three of the industry, or even become the absolute head, often have the opportunity to continue to survive.
Rising stock prices and inflated market capitalization mean that they can raise funds in the capital market at a lower cost, obtain more ammunition to continue to invest in competition, seize more market share, improve industry rankings, and sit on the Iron Throne.
However, this is the story of the past.
In the Internet jianghu in 2022, the Iron Throne is not fragrant, and common prosperity and interconnection are the things that the giants must consider.
Tencent claims to take out 100 billion yuan in 2021, of which 50 billion is used for "sustainable social value innovation" and 50 billion is used for "common prosperity special plan". The direction covered by the plan is mainly concentrated in the fields of rural revitalization, income increase of low-income people, improvement of the primary medical system, and balanced development of education.
Following Tencent, Alibaba also announced in September 2021 that it launched the "Ten Actions of Alibaba to Promote Common Prosperity", which will invest a total of 100 billion yuan by 2025 to help common prosperity. The direction of action includes five aspects: scientific and technological innovation, economic development, high-quality employment, care for vulnerable groups and the Common Prosperity Development Fund.
The two super giants have taken a stand, and the other giants have to say something. Pinduoduo set up a 10 billion yuan agricultural science and technology project, focusing on poverty alleviation and agricultural assistance; Jingdong began to label itself as a "new type of entity enterprise" and dilute the color of the Internet platform.
It is believed that in the future, there will be more giants invested in the wave of common prosperity.
Under such a wave of the times, the battle for cities and the battle for borders that the giants used to be enthusiastic about has become less important.
Take the e-commerce scramble, for example. The competition and confrontation of e-commerce business has been a long-term topic between Tencent and Ali in the past few years. E-commerce has always been Tencent's soft underbelly, but it is Ali's home base. In order to fight against Ali, Tencent invested a lot of manpower and material resources to do self-operated e-commerce, but the effect was mediocre, and finally it relied on investing in JD.com to win back a round, and later relied on investment in Pinduoduo, forming a situation of confrontation with Ali e-commerce.
However, on December 23, 2021, Tencent suddenly announced that it would pay about 460 million shares of JD.com shares it held to Tencent shareholders as an interim dividend. After the distribution is completed, Tencent's shareholding in JD.com will drop from 17% to 2.3%, and it will no longer be the largest shareholder.
Tencent's "clearance reduction" operation shocked the industry. "The troops have been collected, the truce has been made, and there will be no fighting." Someone commented.
In addition, since September, the Ministry of Industry and Information Technology has asked Internet companies to stop the "blocking of URL links" and achieve interconnection in stages and steps. For a long time, WeChat and Taobao have not been interoperable, and the two are separated. Users cannot smoothly share product information from Taobao on WeChat, and they cannot use WeChat Pay in Taobao. Now the official demands that the giants break down the barriers between them and take the initiative to shake hands and make peace.
At this stage, the only one among the giants who is still clamoring and imposing, should be Only ByteDance. The "War of toutung" has been fought for many years, and it has not ended until now.
But in any case, the confrontation between the two armies, which is as loud as in the past, will not appear in the short term. Competition is still there, but gunpowder is much lighter and the way is more low-key.
2021 has passed, and it has been a tough year for the Internet industry. However, we don't have to be too pessimistic, even after a cold winter and a twist and turn, the story of the Internet will not end.
Standing at the starting point of 2022, the Internet industry will continue to change, and updating iteration is the eternal theme of the Internet world. Meeting the changes and challenges is what the giants will have to do in 2022.