A while ago to Europe, just to catch up with the Popular Internet company rocket Internet listing in Germany, which is the most successful Internet company model in Europe in recent years, but carefully check some data, it can be said that Europe in the past 10 years of Internet development has lagged far behind the United States and China.
Rocket Internet's official website reads "to be the largest Internet company outside the United States and China", it seems that Europe's first-line Internet companies have not placed themselves in the same order of magnitude as Chinese Internet companies from the heart. Rocket Internet was valued at around €6.7 billion when it went public in October, while Alibaba, a Chinese company that went public in the same period, reached more than $200 billion.
As the chart below shows, of the 20 internet companies with the highest market capitalization in the world, the United States accounts for 11, Asian countries account for 9, and Europe has none. In Europe, which is so developed in the global economy, why has it been difficult to do anything in the Internet industry? Today I would like to share my own views.
The language is fragmented and the market is small
For historical reasons, Europe is a rich continent made up of dozens of small countries, but the cultural market is too divided to make it difficult for the Internet in Europe to develop.
Germany, Europe's most populous country, has a population of just over 80 million, and many countries have a population of only a few million, but each country retains its own language and culture. Denmark has a population of only 5 million and the Netherlands has a population of 11 million, but such a market has its own unique language and culture.
The Internet is different from the manufacturing industry, Mercedes-Benz and BMW made in Germany can sell well in the world without hindrance, but the German website can not even be entered by European countries, the Internet is highly emphasized in speed and operation, so the european multilingual obstacle makes the cost of developing the Internet very high, and the Internet companies in Germany, France and other countries can only develop in such a small pond in their own country, such a small pond is difficult to grow big fish.
In contrast, the United States has a population of 300 million, and the English language is common to the world, China has a population of 1.3 billion, and foreign Internet companies are difficult to enter, which is destined to make the Internet in China and the United States lead the world.
On the mobile Internet, Europe is even more backward, we see in France that many people are still using blue-screen feature phones, Europeans change mobile phones much less frequently than Asians, on the subway, the proportion of people playing mobile phones is very low, and on the subways in China and Japan, almost everyone is playing with mobile phones at a glance.
Therefore, when there are already mobile Internet companies with a market value of more than 10 billion yuan such as line and millet in Asia, there are few bright spots in the development of mobile Internet in Europe.
Of course, the development of the mobile game industry in Europe is good, and there are a number of excellent mobile game manufacturers such as king, supercell, rovio, gameloft, etc. in Europe, which is inseparable from the deep artistic and creative traditions of Europeans. However, the essence of games is still the content industry, and the essence of movies and books is not much different, and there is a big gap between these companies and mainstream mobile Internet companies in China and the United States in terms of market capitalization.
High taxes and high benefits inhibit innovation
Europe generally implements high taxes and high welfare policies, which inhibits innovation and entrepreneurship, which is also an important reason for the poor development of the Internet in Europe.
European political parties to be elected usually promise a lot of high welfare policies to the people, such policies in making society more fair, but also easy to make people lazy, so that many people are reluctant to come out to start a business, while there is a certain inhibition of Internet innovation.
Let's take ribery, who currently plays for Bayern Munich in Germany, as an example, Ribery's annual salary before tax for a year is 10 million euros (the highest salary in Germany), but his personal income tax is 45%, which means that he only gets 5.5 million euros in the end. In addition, European countries also have to pay various social security fees and other burdens, which add up to make many people reluctant to be bosses. Unlike Chinese bosses, many European business owners often need to ask their employees to work.
In Germany, the people of West Germany also need to pay a "solidarity tax" every year to support the relatively backward East Germany, which totals more than 100 billion euros per year, and many east German cities cannot spend all the money every year. So that after Scotland held an independence referendum, there are many people in Bavaria, Germany's relatively wealthy state, who want to call independence.
The negative impact of this "big pot of rice" tax welfare policy has peaked in some southern European countries, and the government finances of Greece, Spain, and Italy have had problems, which directly triggered the European debt crisis, and Europe has not completely eased up until now. In addition, the people of these countries are raised to be lazy, no one wants to work, and few people are willing to take the risk of starting a business, making most European countries lack competitiveness in the world economy.
Labor costs are high, and small wealth is safe
The overall cost of starting a business in Europe is very high. First of all, the taxes are high, and then the salaries of personnel are also high. Germany's per capita annual income is about 30,000 euros, which makes it impossible for many companies to hire large numbers of people, which makes the European Internet less competitive when competing with Asian countries.
Some european countries are more advocating artisan culture, so Europe prevails in small and beautiful enterprises, so there are many small and beautiful companies on the European Internet, but these companies are difficult to make big to the world.
In addition, enterprises in European countries represented by Germany prefer to finance through bank credit and are not good at capital operation, such as financing through VC, PE equity, or listing of operating companies. The overall PE of european stock markets is very low, such as mercedes-benz BMW such a good car company, pe most of the time only less than 10 times, because the laws of some European countries do not allow vie structure, many European Internet companies are difficult to go to a healthier US stock market financing like Chinese companies.
Therefore, compared with European countries, Chinese Internet practitioners should feel fortunate for themselves.
First of all, China is a rare unified market in the world, and this market pattern was predestined as early as the Qin Shi Huang era more than 2,000 years ago. China's history is the history of great unification, China lacks the soil for local division, and no warlord era in Chinese history has exceeded 100 years. The history of great unification has made China form a unified market economically and culturally, which is the basis for the rapid rise of the Internet in China today. In this land, as long as there is no war for 30 years, the economy and culture will inevitably flourish, and if there is no war for 50 years, China's economy will inevitably become the first in the world.
In terms of the market size of the Internet, China's e-commerce market has caught up with the United States, the size of China's game market has caught up with the United States, and as the scale of China's economic GDP will catch up with the United States in the next one or two decades, it is only a matter of time before the overall scale of China's Internet is comparable to that of the United States.
In contrast, Europe's long Middle Ages and many wars in modern times have made Europe form a regional division, and until now the establishment of the European Union has not been completely solved, even within the powerful United Kingdom, it has almost made Scottish independence. Within the EU, where the currency is unified and the finances are not unified, it is still far from stable. These historical backgrounds have seriously dragged down the development of the Internet in Europe.
Secondly, due to the existence of policy restrictions on the Chinese Internet, it is difficult for overseas Internet giants such as Google and Facebook to easily enter China, and it is their absence in the Chinese market that makes Baidu and Tencent have great room for development. Or it can be said that the Chinese Internet is, in a way, a huge local area network, which is already large enough to thrive even if it is not connected to the world.
And those Internet companies in Europe, which are originally very weak, are always facing the invasion of the American Internet giants, the essence of the Internet is winner-take-all, when people can find friends from all over the world on Facebook with 1.3 billion users, who will use the social network with limited users in their own country?
Finally, on the road of internationalization, China's Internet companies have also begun to have enough strength. The price of an IT engineer in China is only one-fifth of that of Silicon Valley, so after the mobile Internet with global characteristics rises, China's Internet phenomenon-level products can quickly gain a foothold in the world, emphasizing the need for rapid iteration of the mobile Internet, China's human sea tactical advantages are obvious, especially in the Android market where the version is divided, the advantages of China's mobile Internet are more obvious.
The 21st century is the century of the Internet in China. We can fully imagine that in the future, among the top 20 Internet companies in the world by market capitalization, China will likely occupy 10 positions for a long time. The European Internet, on the other hand, is likely to continue to struggle in the mire.
The debt owed during the Opium War is time to pay it back through the Internet.
The author of this article, Hang Zeng, is the Senior Strategic Analysis Director of Touch Technology, the author of "The Empire of Mobile" and "The Global Journey of an iPhone"
[36Kr Original Article, Author: Guest]