Huainan is an orange, Huaibei is a hedgehog, the East is a money-printing machine, the West is a gold-swallowing beast. Author Yang Zhichao Editor Yuan Ye Musk has never hidden his envy of Tencent, and he has always taken WeChat as the development goal of X. In his eyes, X is more than just a U.S. microblog. In his eyes, X is more than just an American microblogging service, and he hopes to carry the needs of socializing and living. According to his own disclosure, X will support chat, telephone, point-to-point payment and other functions, obviously in a comprehensive standard WeChat. WeChat business is good, but Tencent is also a bit envious of Musk’s U.S. Internet market. In the third quarter results meeting, Tencent management bluntly said that China’s AI revenue will not be as explosive as that of the United States. Although Tencent has a strong AI big model and enterprise service layout, they don’t think they can eat the AI dividend as big as Microsoft and Google. In addition to the stock price trend, in 2024, China and the United States Internet also showed more differences China’s BBS leader closed down, the United States BBS leader completed the listing. Chinese e-commerce platforms make a lot of money, while American e-commerce platforms can only rely on cloud services to provide profits. Throughout 2024, in addition to advertising this hard currency, the most profitable business in the United States and China Internet almost do not overlap. Obviously, Copy to China’s time has long passed, Huainan for orange, Huibei for Hovenia, the same seed in two pieces of land to open the fruit is too different. The relationship between China and the United States Internet is not just a kind of catching up or surpassing, but on a different fork in the road, the significance of learning from each other has become smaller and smaller. 01 Eastern money printing machine, western gold swallowing beast Musk does not do the game, otherwise his envy of Tencent is one more point. Although the black myth Goku is the biggest surprise in the Chinese game world in 2024, but commercially, the biggest success of Chinese games in 2024 comes precisely from outside the black myth, outside the 3A game. Tencent’s product matrix, centered on handheld games, has demonstrated a commercial ability that goes far beyond buyout 3A games. In the second quarter, Tencent’s local game revenues grew 9 year-on-year, and again in the third quarter, up 14 year-on-year. Far outpacing the growth rates of other major game companies around the world. Various 5- and 10-year old games and old IPs are still gaining momentum and earning record revenues. Tencent’s various old games have not shown any signs of decline. In the past few quarterly results meetings, Tencent’s management kept repeating the term “evergreen games”. The other side of the evergreen is to eat the old capital, for the current Tencent game, eating the old capital is already very profitable. The largest game company in the United States EA in the player community has a nickname American Tencent, but its performance is not like Tencent as soaring. In the third quarter, EA’s revenue grew only 8, at the same time net profit fell 26, two consecutive quarters suffered a profit decline of more than 25. EA is in transition, the old IP model is being tested by the market. In early 2024, EA announced five layoffs. And in 2023, EA has already experienced two large-scale layoffs. In terms of business model, there is clearly a gap between the so-called American Tencent , and the real Tencent. Compared to Ubisoft in 2024, EA has seen better days. Although Ubisoft is headquartered in France, according to financial data, the North American market accounted for up to 60 percent of its revenue, only 10 percentage points lower than Tencent’s share of games in China. But the U.S. market hasn’t given Ubisoft a good return, with Ubisoft’s stock price having slashed compared to the same period last year due to a severe decline in performance. Rumors of a takeover have also arrived, with multiple sources simultaneously revealing that Ubisoft may sell off its own business assets in 2025, completing a split and reorganization. The gaming company, which is highly regarded in the eyes of gamers, could become history. Figure Ubisoft’s revenue structure One of the reasons for the huge gap is the difference in business models. Although both are game makers, Tencent and Ubisoft have very different business models. The former is more like an Internet company, making money through traffic and selling virtual goods, while the latter is in the 3A buyout game market, which is more like the business of a movie studio, full of development costs and investment risks. Europe and the United States game makers also desire more lucrative handheld game market, but their host game development earlier, the market has long been mature, handheld game scale is limited. According to Xsolla’s prediction not long ago, the total revenue of mobile games in 2024 will reach 98.7 billion dollars, but 34.6 billion dollars of which are in China, 65 billion dollars are in Asia, as the world’s largest consumer market, North America in the hand game market is only 25 billion dollars. The good news is that in 2024, the U.S. handheld game market will continue to grow, and according to Xsolla’s projections will grow by about 25 percent, which is more than $20 billion enough to guarantee that it will become a fertile ground for handheld games. The bad news is that not all of these dividends will necessarily be captured by local companies, especially the big local players. The strong Chinese market has given birth to strong Chinese handheld games, which have a strong competitive advantage in the global handheld game market. Leaving aside Tencent, NetEase, and Miha Tour, which have been attacking overseas, Whiteout Survival by Dot Dot Interactive has long dominated the list of domestic games going overseas in 2024. As of the third quarter alone, the number of global downloads exceeded 90 million, and the cumulative revenue exceeded 1.3 billion dollars. On the other hand, due to the strength of console and PC games in serious games, the US handheld game market is heavily concentrated on casual games. As per dot com data, casual games are the number one category in the US gaming market. In this kind of category, it is more difficult for the giant’s traffic advantage and capital advantage to be brought into play. Observing the U.S. handheld game revenue rankings, it is not difficult to find that they are filled with a large number of small companies Overseas companies. It is difficult to find overlapping vendors in the top ten, and the market is very fragmented. Figure 2024 H1 U.S. Handheld Game Inside Purchase Revenue Ranking, Data Source Dot Data The U.S. game market has another form of good business Game platform. This is a business similar to the Apple tax, charging fees to game developers, and there is a natural advantage in profit margins. In this business, buyout games are more developed in the U.S. market is much ahead. Take Black Myth as an example, combining several public data, Steam became the absolute main sales platform for the 2024 Chinese game Black Myth, and when the total sales exceeded ten million, the estimated sales of Wegame, a domestic platform, were only about one million according to the pass rate and the number of people who passed the game. It’s so strong even among domestic games, not to mention other games. In this business of tax collection, the U.S. market shows its own advantages. 02 Ali’s e-commerce feeds the cloud, and Amazon’s cloud feeds the e-commerce Near the end of the year, Apple released the App store’s annual list. Three of the top four are related to Musk The fourth place ChatGPT, Musk was one of its co-founders, and at the same time ChatGPT is xAI’s biggest competitor. Tiktok, in third place, was the subject of a direct message of support from Musk, who in April 2024 flagged a ban on it. Threads, in second place, was somehow created by Musk It was Musk’s drastic changes to Twitter that saw a loss of users and advertisers, and Meta launched Threads at just the right time. But none of them were the biggest winners in 2024, Temu was. The e-commerce platform won the top of the download charts for the second year in a row, and became the app with the most new users in the world. image source App Store Throughout the year, Temu almost cloaked itself globally In Brazil, Temu became the fifth-largest e-commerce platform In France, Temu’s monthly activity reached 12 million In Germany, Temu even has 16.3 million monthly activity But these are still unable to resist the But these still can’t match the money-sucking power of the Chinese market. Pinduoduo’s three-quarterly report shows that advertising revenue, mainly from domestic e-commerce, is as high as 49.4 billion yuan, almost the same as the revenue from transaction service fees, totaling about 140 billion yuan in the three quarters, with the growth rate consistently at a high level. Throughout 2024, the biggest label for domestic e-commerce may have been fierce competition, but at the same time, its strong profitability was somewhat overlooked. In 2024, China’s top ten most profitable Internet companies, e-commerce accounted for three and a half Ali Jingdong Pinduoduo. On top of that, there’s ByteDance, an internet company that uses both advertising and e-commerce as its main source of revenue. After all, China is the world’s largest e-commerce market, multiple third-party data show that its market size accounts for roughly half of the world. The same business in the U.S. market has become a drag on the giant’s profits. In the third quarter, Amazon’s online store sales grew 7 2, but did not beat the 15 global e-commerce market growth. Competitors from China are a growing concern for Amazon, which has launched Haul, a discount store similar to Pinduoduo, in an attempt to counter the cross-border e-commerce four dragons from across the ocean. Profitability, Amazon’s online retail business, which has revenues of more than $100 billion, generated less than $10 billion in operating profit in the third quarter. Amazon e-commerce profits are low is not a secret, after all, its model is heavier self-owned stores, but the platform type eBay performance is not good, three quarters, the United States e-commerce second brother eBay net profit year-on-year decline of 51 , after a quarter of a substantial decline in profits again. Comparison of Amazon and Alibaba, can clearly find the e-commerce business in the two markets are different. From the point of view of business composition, Alibaba and Amazon is almost copy and paste out. Their core business is made up of e-commerce cloud, but the profit performance is very different. Alibaba side, e-commerce is a complete money printing machine, the third quarter Natural quarter, the same below Taotian Group’s EBITA reached 45 . Ali cloud side, although EBITA margins reached a record high, but only 9 , too much worse than e-commerce. And on Amazon, the comparison of the ability of these two businesses to absorb money is reversed Cloud services AWS is too strong, Amazon e-commerce profitability is much worse. While AliCloud’s operating profit is only 9, AWS’s operating margin is perennially as high as 30 , and has reached 38 1 in the third quarter of 2024. Of Amazon’s $17 billion in operating profit, $10.4 billion was contributed by AWS, bearing in mind that AWS’ revenue is only $27.4 billion, while Amazon’s e-commerce business Online store platform Advertising revenue is nearly $100 billion. That’s a huge gap in profitability, and it doesn’t seem like the same business at all. In the U.S., though, there’s one type of e-commerce that’s doing very well in 2024, even better than it’s doing in China And that’s branded independents, and retailer independents. In Walmart’s third-quarter results, global e-commerce sales jumped 27 percent, driving a 55 percent increase in revenue for the old company. In addition, retailers such as Costco Target are also reaping the benefits of the e-commerce channel. 03 Finding Its Own AI Path This business characteristic of Amazon is a bit of a disadvantage in the e-commerce era, but switching to the AI era makes it smell good. At the Q3 results meeting, Tencent’s management expressed a helplessness China doesn’t actually have a very large ToB market, the SaaS ecosystem isn’t that active in China, and in short, China’s AI revenues aren’t going to explode like they have in the US. As China’s Internet leader, Tencent seems to have given up on the US AI market as its benchmark. In fact, not all U.S. companies have found a good business model for AI, and it is equally difficult for Silicon Valley companies that lack a cloud service layout to make money by AI. Zuckerberg, who holds the second largest amount of computing power, also admitted at the 2024 quarterly results meeting that it may take years for investors and companies to see the results of their investment in large models of generative language. But it’s also true that there are a lot of internet tech companies in Silicon Valley making big money through AI. Putting aside the seller Nvidia, Microsoft’s total revenue in fiscal year 2024 reached $245.1 billion, a year-on-year increase of as much as 16 , and net profit increased by 22 . According to Microsoft’s management’s latest projections, the AI business will bring them $10 billion in operating profit in the second quarter of fiscal year 2025 next quarter. Leveraging Office Windows Browser A longstanding presence in cloud services, Copilot has found a plethora of entry points to cash in on its capabilities. Google can’t match Microsoft’s market position in cloud services, but has benefited from AI just as much. In the third quarter, Google’s cloud revenue grew by nearly 35 year-on-year , far exceeding the advertising business by 12, and has become Google’s most powerful growth engine. Google attributes the performance of its cloud business to AI, and the Gemini big model has been integrated into Google’s full-stack product line, generating revenue through subscriptions in all areas. But the revenue growth and profit growth figures for several domestic cloud services are clearly much too small, and indeed, as Tencent said, it’s hard to see explosive growth in the earnings reports of the big players’ cloud services. But Chinese Internet companies are also exploring their own AI business models, which may not be without their own advantages. Tencent, for example, the Internet giant with a very diverse business, is taking ecology as the keyword for its own AI layout. According to its responsible person in an interview with the media Yuan Yuan is just an outlet for Tencent’s hybrid big model. Tencent’s internal is not all in the big model, but the big model is inside any product. Figure Under the huge business ecology, there are countless possibilities for Tencent’s AI technology, AI charting Although there is no richness in cloud services like Microsoft, WeChat’s layout in the C end is spread over the content Advertisement Social Life Life and finance This kind of ecology can’t be compared even with Meta and Google. Of course, the mature business model is too early to say for Meta and Mixed Big Model, but this kind of AI layout that is completely immersed in a huge ecosystem obviously has more possibilities than a single AI application. Jitterbug is also another way to enter the AI toy market, conspicuous bag , BubblePal has become a hit. Jitterbug, also including Alibaba in the field of AI, an advantage is that they have e-commerce Content constitutes a huge advertising ecosystem, and AI can improve the conversion efficiency Google has proved that this is feasible. 04 Where There’s Good Business There are many other areas where the US and Chinese Internet are showing opposite trends in 2024 The hormonal side of the economy. The recent hit OnlyFans raked in $6.6 billion in revenue a year, growing at a rate of 19 , while on the other side of the spectrum, Stranger has seen consecutive declines in revenue and profit. On the long-form video side, Lovecraft’s results are under pressure to grow, with its latest net profit coming in at just $229 million, but Nifty’s stock has hit record highs in the face of short-form video offerings like TikTok Reels. The latest quarterly earnings have reached $2,364 million, with a net profit margin of more than 20 , a truly excellent business. Chart Over the past year, the stock price trend of Lovecraft on Nifty Down also reflects the trend of their profits OTA side, Ctrip’s results shine, net profit jumped more than 40, the third quarter of 15.8 billion yuan of revenue under the creation of 6.765 billion yuan of net profit. But Booking’s profit growth is somewhat stagnant. On the social media side, Reddit successfully went public in March 2024, and although it briefly experienced a bust, its stock price has now more than tripled its pre-IPO value. As an old business model, Reddit’s business performance is anything but old. In the third quarter, Reddit’s revenue grew 67 87 year-on-year, making it profitable for the first time since its inception, and daily users grew 47 year-on-year. And Reddit’s user structure is still unusually young. At the same time that young people in China have embraced short videos, even middle-aged and elderly people are no longer in favor of BBS in 2024, young people in the United States is still a massive influx of a kind of old community, this huge difference is really difficult to explain. Although it is impossible to explain the reasons for the formation of all the differences, but one thing is certain, China and the United States Internet do not have to envy each other, there will always be good business in every market. Header image credit AI Mapping
Huainan is an orange, Huibei is a hedgehog, the East is a money printer, the West is a gold swallowing beast.
Author Yang Zhichao Editor Yuan Ye
Author Yang Zhichao
Edited by HARANO
Musk has never hidden his envy of Tencent, and he has always taken WeChat as a development goal for X. In his eyes, X is more than just a US microblogging site, and it is also expected to carry socialization and life needs. According to his own disclosure, X will support chat, telephone, point-to-point payment and other functions, obviously in a comprehensive standard WeChat. WeChat business is good, but Tencent is also a bit envious of Musk’s U.S. Internet market. In the third quarter results meeting, Tencent management bluntly said that China’s AI revenue will not be as explosive as that of the United States. Although Tencent has a strong AI big model and enterprise service layout, they don’t think they can eat the AI dividend as big as Microsoft and Google. In addition to the stock price trend, in 2024, China and the United States Internet also showed more differences China’s BBS leader closed down, the United States BBS leader completed the listing. Chinese e-commerce platforms make a lot of money, while American e-commerce platforms can only rely on cloud services to provide profits. Throughout 2024, in addition to advertising this hard currency, the most profitable business in the United States and China Internet almost do not overlap. Obviously, Copy to China’s time has long passed, Huainan for orange, Huibei for Hovenia, the same seed in two pieces of land to open the fruit is too different. The relationship between China and the U.S. Internet has not only been a kind of catching up or surpassing, but also embarked on a different fork in the road, and the significance of learning from each other has become smaller and smaller.
Musk has never hidden his envy of Tencent, and he has always taken WeChat as the development goal of X. In his eyes, X is more than just an envy of Tencent. In his eyes, X is more than a U.S. microblogging, and hope to carry social and life needs. According to his own disclosure, X will support chat phone point-to-point payment and other functions, obviously in a comprehensive benchmark WeChat.
WeChat business is good, but Tencent is also a bit envious of Musk’s U.S. Internet market. In the third quarter results meeting, Tencent management bluntly said that China’s AI revenue will not be as explosive as that of the United States. Although Tencent has a strong AI big model and enterprise service layout, they do not think they can eat as big an AI dividend as Microsoft and Google.
In addition to the stock price trend, in 2024, China and the United States Internet also showed more differences China’s BBS leader closed down, the United States BBS leader completed the listing. Chinese e-commerce platforms make tons of money, while American e-commerce platforms can only rely on cloud services to provide profits.
Throughout 2024, in addition to advertising this hard currency, the most profitable business of the Internet in China and the United States almost do not overlap.
Obviously, Copy to China’s time has long passed, Huainan for orange, Huibei for Hovenia, the same seed in two pieces of land to open the fruit is too different. The relationship between China and the U.S. Internet has not only been a kind of catching up or surpassing, but also embarked on a different fork in the road, and the significance of learning from each other has become smaller and smaller.
01 Eastern money printing machine, Western gold swallowing beasts
Musk does not do the game, otherwise his envy of Tencent is one more point. Although the Black Myth Goku is the biggest surprise in China’s gaming industry in 2024, commercially, the biggest success of China’s games in 2024 comes precisely from outside of the Black Myth, outside of 3A games. Tencent’s product matrix, centered on handheld games, has demonstrated a commercial ability that goes far beyond buyout 3A games. In the second quarter, Tencent’s local game revenues grew 9 year-on-year, and again in the third quarter, up 14 year-on-year. Far outpacing the growth rates of other major game companies around the world. Various 5- and 10-year old games and old IPs are still gaining momentum and earning record revenues. Tencent’s various old games have not shown any signs of decline. In the past few quarterly results meetings, Tencent’s management kept repeating the term “evergreen games”. The other side of the evergreen is to eat the old capital, for the current Tencent game, eating the old capital is already very profitable. The largest game company in the United States EA in the player community has a nickname American Tencent, but its performance is not like Tencent as soaring. In the third quarter, EA’s revenue grew only 8, at the same time net profit fell 26 percent year-on-year for two consecutive quarters suffered a profit decline of more than 25 percent. EA is in transition, the old IP model is being tested by the market. In early 2024, EA announced five layoffs. And in 2023, EA has already experienced two large-scale layoffs. In terms of business model, there is clearly a gap between the so-called American Tencent , and the real Tencent. Compared to Ubisoft in 2024, EA has seen better days. Although Ubisoft is headquartered in France, according to financial data, the North American market accounted for up to 60 percent of its revenue, only 10 percentage points lower than Tencent’s share of games in China. But the U.S. market hasn’t given Ubisoft a good return, with Ubisoft’s stock price having slashed compared to the same period last year due to a severe decline in performance. Rumors of a takeover have also arrived, with multiple sources simultaneously revealing that Ubisoft may sell off its own business assets in 2025, completing a split and reorganization. The gaming company, which is highly regarded in the eyes of gamers, could become history.
Musk does not do games, or his envy of Tencent has to be one more point.
While Black Myth Goku is the biggest surprise in Chinese gaming in 2024, commercially, the biggest success of Chinese gaming in 2024 will come from precisely outside of Black Myth, outside of 3A games. Tencent’s product matrix, centered on handheld games, has demonstrated a commercial ability that goes far beyond buyout 3A games.
In the second quarter, Tencent’s local game revenues grew 9 year-on-year, and again in the third quarter, up 14 year-on-year. Far outpacing the growth rates of other major game companies around the world. Various 5- and 10-year old games and old IPs are still gaining momentum and earning record revenues. Tencent’s various old games have not shown any signs of decline. Tencent’s management has been repeating the term “evergreen games” at its earnings meetings over the past few quarters.
The other side of the evergreen is to eat the old capital, for the current Tencent game, eat the old capital is already very profitable.
The largest game company in the United States EA in the player community has a nickname American Tencent, but its performance is not like Tencent as soaring. In the third quarter, EA’s revenue grew only 8, at the same time net profit fell 26, two consecutive quarters suffered a profit decline of more than 25.
EA is in transition, the old IP model is being tested by the market. In early 2024, EA announced five layoffs. And in 2023, EA has already experienced two large-scale layoffs. In terms of business model, there is clearly a gap between the so-called American Tencent , and the real Tencent.
Compared to Ubisoft in 2024, EA has seen better days. Although Ubisoft is headquartered in France, according to financial data, the North American market accounted for up to 60 percent of its revenue, only 10 percentage points lower than Tencent’s share of games in China. But the U.S. market has not given Ubisoft a good return, due to the serious decline in performance, Ubisoft’s share price compared to the same period last year has been cut.
Rumors of a takeover have also arrived, with multiple sources simultaneously revealing that Ubisoft may sell off its own business assets in 2025, completing a split and reorganization. The gaming company, which is highly regarded in the eyes of gamers, could become history.
Figure Ubisoft’s revenue structure
One of the reasons for the huge gap is the different business models. Although both are game makers, Tencent and Ubisoft have very different business models. The former is more like an Internet company, through the traffic Virtual goods sold to make money, while the latter is located in the 3A buyout system game market, is more like a movie company business, full of development costs and investment risks. Europe and the United States game makers also desire more lucrative handheld game market, but their host game development earlier, the market has long been mature, handheld game scale is limited. According to Xsolla’s prediction not long ago, the total revenue of mobile games in 2024 will reach 98.7 billion dollars, but 34.6 billion dollars of them are in China, 65 billion dollars are in Asia, as the world’s largest consumer market, North America in the hand game market is only 25 billion dollars. The good news is that in 2024, the U.S. handheld game market will continue to grow, and according to Xsolla’s projections will grow by about 25 percent, which is more than $20 billion enough to guarantee that it will become a fertile ground for handheld games. The bad news is that not all of these dividends will necessarily be captured by local companies, especially the big local players. The strong Chinese market has given birth to strong Chinese handheld games, which have a strong competitive advantage in the global handheld game market. Leaving aside Tencent, NetEase, and Miha Tour, which have been attacking overseas, Whiteout Survival by Dot Dot Interactive has long dominated the list of domestic games going overseas in 2024. As of the third quarter alone, the number of global downloads exceeded 90 million, and the cumulative revenue exceeded 1.3 billion dollars. On the other hand, due to the strength of console and PC games in serious games, the US handheld game market is heavily concentrated on casual games. As per dot com data, casual games are the number one category in the US gaming market. In this kind of category, it is more difficult for the giant’s traffic advantage and capital advantage to be brought into play. Observing the U.S. handheld game revenue rankings, it is not difficult to find that they are filled with a large number of small companies Overseas companies. It is difficult to find overlapping manufacturers in the top ten, and the market is very fragmented.
One of the reasons for the huge gap is the difference in business models. Although both are game makers, Tencent and Ubisoft have very different business models. The former is more like an Internet company, making money through traffic Virtual goods sold, while the latter is in the 3A buyout game market, which is more like the business of a movie studio, full of development costs and investment risks.
Europe and the United States game makers also desire more lucrative handheld game market, but their host game development earlier, the market has long been mature, handheld game scale is limited. According to Xsolla’s prediction not long ago, the total revenue of mobile games in 2024 will reach $98.7 billion, but $34.6 billion of them are in China, $65 billion in Asia, as the world’s largest consumer market, North America in the hand swim market is only $25 billion in size.
The good news is that in 2024, the U.S. handheld game market will continue to grow, according to Xsolla’s projections will grow by about 25%, and the market size of more than 20 billion U.S. dollars is enough to guarantee that it will become a fertile ground for handheld games.
The bad news is that not all of these dividends will necessarily be captured by local companies, especially the big local players. The strong Chinese market has given birth to strong Chinese handheld games, which have a strong competitive advantage in the global handheld game market. Leaving aside Tencent, NetEase, and Miha Tour, which have been attacking overseas, Whiteout Survival by Dot Dot Interactive has long dominated the list of domestic games going overseas in 2024. As of the third quarter alone, the number of global downloads exceeded 90 million, and the cumulative revenue exceeded 1.3 billion U.S. dollars.
On the other hand, due to the strength of console and PC games in serious games, the US handheld game market is heavily concentrated on casual games. As per dot com data, casual games are the number one category in the US gaming market. In this kind of category, it is more difficult for the giants to utilize their traffic advantage and capital advantage.
Observing the U.S. handheld game revenue rankings, it is not difficult to find that they are filled with a large number of small companies Overseas companies. It is difficult to find overlapping manufacturers in the top ten, and the market is very fragmented.
Figure 2024 H1 U.S. handheld game in-play revenue list, data source Dot Data
The U.S. game market has another form of good business Game platforms. This is a business similar to the Apple tax, charging fees to game developers, and there is a natural advantage in profit margins. In this business, buyout games are more developed in the U.S. market is much ahead. Take Black Myth as an example, combining several public data, Steam became the absolute main sales platform for the 2024 Chinese game Black Myth, and when the total sales exceeded ten million, the estimated sales of Wegame, a domestic platform, were only about one million according to the pass rate and the number of people who passed the game. It’s so strong even among domestic games, not to mention other games. The US market has shown its strength in this taxing business.
The U.S. game market has another form of good business: the game platform. This is a kind of business similar to apple tax, charging fees to game developers, with a natural advantage in profit margins.
In this business, buyout games are more developed in the U.S. market is much ahead. Take Black Myth as an example, combining several public data, Steam became the absolute main sales platform for the 2024 Chinese game Black Myth, and when the total sales exceeded ten million, the estimated sales of Wegame, a domestic platform, were only about one million according to the pass rate and the number of people who passed the game. It’s so strong even among domestic games, not to mention other games. The US market has shown its strength in this taxing business.
02 Ali’s e-commerce feeds the cloud, and Amazon’s cloud feeds e-commerce.
Near the end of the year, Apple released the annual list of the App store. Three of the top four are related to Musk The fourth place ChatGPT, Musk was one of its co-founders, and at the same time ChatGPT is xAI’s biggest competitor. Tiktok, in third place, was the subject of a direct message of support from Musk, who in April 2024 flagged a ban on it. Threads, in second place, was somehow created by Musk It was Musk’s drastic changes to Twitter that led to the loss of users and advertisers, and Meta launched Threads at just the right time. But none of them were the biggest winners in 2024; Temu was. The e-commerce platform took the top spot on the download charts for the second year in a row, becoming the app with the most new users in the world.
Toward the end of the year, Apple released another annual list for the App store. Three of the top four are related to Musk The fourth-place ChatGPT, of which Musk was one of the co-founders, and ChatGPT, which is also xAI’s biggest competitor. Tiktok, in third place, was the subject of a direct message of support from Musk, who in April 2024 flagged a ban on it. Threads in second place was somehow created by Musk It was due to Musk’s drastic changes to Twitter that there was a loss of users and advertisers, and Meta launched Threads at just the right time.
But none of them are the biggest winners of 2024, Temu is. The e-commerce platform took the top spot on the download charts for the second year in a row, becoming the app with the most new users in the world.
Image source App Store
In a whole year, Temu almost in the global cloak and dagger In Brazil, Temu became the fifth largest e-commerce platform In France, Temu’s monthly activity reached 12 million In Germany, Temu even has 16.3 million monthly activity But these are still not able to resist the money-sucking ability of the Chinese market. Pinduoduo’s three-quarter report shows that advertising revenue, mainly from domestic e-commerce, is as high as 49.4 billion yuan, almost equal to the revenue from transaction service fees, totaling about 140 billion yuan over three quarters, with the growth rate consistently at a high level. Throughout 2024, the biggest label for domestic e-commerce may have been fierce competition, but at the same time, its strong profitability was somewhat overlooked. In 2024, China’s top ten most profitable Internet companies, e-commerce accounted for three and a half Ali Jingdong Pinduoduo. On top of that, there’s ByteDance, an internet company that uses both advertising and e-commerce as its main source of revenue. After all, China is the world’s largest e-commerce market, multiple third-party data show that its market size accounts for roughly half of the world. The same business in the U.S. market has become a drag on the giant’s profits. In the third quarter, Amazon’s online store sales grew 7 2, but did not beat the 15 global e-commerce market growth. Competitors from China are a growing concern for Amazon, which has launched Haul, a discount store similar to Pinduoduo, in an attempt to counter the cross-border e-commerce four dragons from across the ocean. Profitability, Amazon’s online retail business, which has revenues of more than $100 billion, generated less than $10 billion in operating profit in the third quarter. Amazon e-commerce profits are low is not a secret, after all, its model is heavier self-owned stores, but the platform type eBay performance is not good, three quarters, the United States e-commerce second brother eBay net profit year-on-year decline of 51 , after a quarter of a substantial decline in profits again. Comparison of Amazon and Alibaba, can clearly find the e-commerce business in the two markets are different. From the point of view of business composition, Alibaba and Amazon is almost copy and paste out. Their core business is made up of e-commerce cloud, but the profit performance is very different. Alibaba side, e-commerce is a complete money printing machine, the third quarter Natural quarter, the same below Taotian Group’s EBITA reached 45 . Ali cloud side, although EBITA margins reached a record high, but only 9 , too much worse than e-commerce. And on Amazon, the comparison of the ability of these two businesses to absorb money is reversed Cloud services AWS is too strong, Amazon e-commerce profitability is much worse. While AliCloud’s operating profit is only 9, AWS’s operating margin is perennially as high as 30 , and has reached 38 1 in the third quarter of 2024. Of Amazon’s $17 billion in operating profit, $10.4 billion was contributed by AWS, bearing in mind that AWS’ revenues are only $27.4 billion, while Amazon’s e-commerce business Online store platform Advertising revenues are nearly $100 billion. That’s a huge gap in profitability, and it doesn’t seem like the same business at all. In the U.S., though, there’s one type of e-commerce that’s doing very well in 2024, even better than it’s doing in China And that’s branded independents, and retailer independents. In Walmart’s third-quarter results, global e-commerce sales jumped 27 percent, driving a 55 percent increase in revenue for the old company. In addition, Costco, Target and other retailers are also making a lot of money in the e-commerce channel.
Over the course of the year, Temu has been a major force in almost every corner of the globe. In Brazil, Temu is the fifth largest e-commerce platform, in France it has 12 million monthly users, and in Germany it has 16.3 million monthly users.
But these still can’t match the money-sucking power of the Chinese market.
Pinduoduo’s three-quarterly report shows that advertising revenue, mainly from domestic e-commerce, is as high as 49.4 billion yuan, almost the same as the revenue from transaction service fees, totaling about 140 billion yuan in the three quarters, and the growth rate is always at a high level. Throughout 2024, the biggest label of domestic e-commerce may be the fierce competition, but at the same time, its strong profitability is somewhat overlooked.
In 2024, China’s top ten most profitable Internet companies, e-commerce accounted for three and a half Ali Jingdong Pinduoduo. On top of that, there’s ByteDance, an internet company that uses both advertising and e-commerce as its main source of revenue. After all, China is the world’s largest e-commerce market, and several third-party data show that its market size accounts for roughly half of the world.
The same business, to the U.S. market in turn become a drag on the giant’s profits.
In the third quarter, Amazon’s online store sales grew 7 2, but did not beat the 15 global e-commerce market growth. Competitors from China make Amazon more and more worried, Amazon launched a discount store similar to Pinduoduo Haul, trying to fight against the cross-border e-commerce four dragons from across the ocean.
Profitability, Amazon’s online retail business, which has revenues of more than $100 billion, generated less than $10 billion in operating profit in the third quarter. Amazon e-commerce profits are low is not a secret, after all, its model is heavier self-owned stores, but the platform type eBay performance is not good, three quarters, the United States e-commerce second brother eBay net profit fell 51 , after a quarter again a substantial decline in profits.
Comparison of Amazon and Alibaba, can clearly find the e-commerce business in the two markets are different.
From the point of view of business composition, Alibaba and Amazon is almost copy and paste out. Their core business is made up of e-commerce cloud, but the profit performance is very different. Alibaba side, e-commerce is a complete money printing machine, the third quarter Natural quarter, the same below Taotian Group’s EBITA reached 45 . Aliyun side, although the EBITA margin reached an all-time high, but only 9, much worse than e-commerce.
And on Amazon, the comparison of the ability of these two businesses to absorb money is reversed Cloud services AWS is too strong, Amazon e-commerce profitability is much worse. While AliCloud’s operating profit is only 9, AWS’s operating margin is perennially as high as 30 , and has reached 38 1 in the third quarter of 2024. Of Amazon’s $17 billion in operating profit, $10.4 billion was contributed by AWS, bearing in mind that AWS’s revenues are only $27.4 billion, while Amazon’s e-commerce business Online store platform Advertising revenues are nearly $100 billion.
This huge gap in profitability doesn’t look like the same business at all.
In the U.S., though, there’s one type of e-commerce that’s doing very well in 2024, even better than it’s doing in China And that’s branded independents, and retailer independents. In Walmart’s third-quarter results, global e-commerce sales jumped 27 percent, driving a 55 percent increase in revenue for the old company. In addition, Costco, Target and other retailers are also making a lot of money in the e-commerce channel.
03 Finding Your AI Path
This business characteristic of Amazon is a bit of a disadvantage in the e-commerce era, but switching to the AI era makes it smell good. At the Q3 results meeting, Tencent’s management expressed a helplessness China doesn’t actually have a very large ToB market, the SaaS ecosystem isn’t that active in China, and in short, China’s AI revenues aren’t going to explode like they have in the US. As China’s Internet leader, Tencent seems to have given up on the US AI market as its benchmark. In fact, not all U.S. companies have found a good business model for AI, and it is equally difficult for Silicon Valley companies that lack a cloud service layout to make money by AI. Zuckerberg, who holds the second largest amount of computing power, also admitted at the 2024 quarterly results meeting that it may take years for investors and companies to see the results of their investment in large models of generative language. But it’s also true that there are a lot of internet tech companies in Silicon Valley making big money through AI. Putting aside seller Nvidia, Microsoft’s total revenue for fiscal 2024 reached $245.1 billion, up a whopping 16 , with net income up 22 .
This business characteristic of Amazon is a bit of a disadvantage in the age of e-commerce, but switching to the age of AI makes it smell good.
At the Q3 results meeting, Tencent’s management expressed a helplessness China actually doesn’t have a very large ToB market, the SaaS ecosystem is not so active in China, in short, China’s AI revenues won’t explode as much as in the United States.
As China’s Internet leader, Tencent seems to have given up on the U.S. AI market as its benchmark.
In fact, not all U.S. companies have found a good business model for AI, and it is equally difficult for Silicon Valley companies that lack a cloud service layout to make money by AI. Zuckerberg, who holds the second most arithmetic power, also confessed at the 2024 quarterly results meeting that investors and companies are investing in generative language big models, and it may take years to see results.
But it’s also true that there are a lot of internet tech companies in Silicon Valley making big money through AI. Putting aside seller Nvidia, Microsoft’s total revenue for fiscal 2024 reached $245.1 billion, up a whopping 16 , with net income up 22 .
As per the latest projections of Microsoft’s management, the AI business will bring them $10 billion in operating profit in the second quarter of fiscal year 2025 next quarter. With its longstanding presence in Office Windows Browser cloud services, Copilot has found plenty of entry points to cash in on its capabilities. Google can’t match Microsoft’s market position in cloud services, but has benefited from AI just as much. In the third quarter, Google’s cloud revenue grew by nearly 35 year-on-year , far exceeding the advertising business by 12, and has become Google’s most powerful growth engine. Google attributes the performance of its cloud business to AI, and the Gemini big model has been integrated into Google’s full-stack product line, generating revenue through subscriptions in all areas. But the revenue growth and profit growth figures for several domestic cloud services are clearly much too small, and indeed, as Tencent said, it’s hard to see explosive growth in the earnings reports of the big players’ cloud services. But Chinese Internet companies are also exploring their own AI business models, which may not be without their own advantages. Tencent, for example, the Internet giant with a very diverse business, is taking ecology as the keyword for its own AI layout. According to its responsible person in an interview with the media Yuan Yuan is just an outlet for Tencent’s hybrid big model. Tencent’s internal is not all in the big model, but the big model is inside any product.
According to the latest projections of Microsoft’s management, the AI business will bring them $10 billion in operating profit in the second quarter of fiscal year 2025 next quarter. With the help of Office Windows Browser Long-term layout on cloud services, Copilot has found a large number of entrances to realize its own capabilities.
Google can’t match Microsoft’s market position in cloud services, but has benefited from AI just as much. In the third quarter, Google’s cloud revenue grew by nearly 35 year-on-year , far exceeding the advertising business by 12, and has become Google’s most powerful growth engine. Google attributes the performance of its cloud business to AI, and the Gemini big model has been integrated into Google’s full-stack product line, generating revenue through subscriptions in all areas.
But the revenue growth and profit growth figures of several domestic cloud services are obviously too small, indeed, as Tencent said, it is difficult to see explosive growth in the earnings reports of the big manufacturers of cloud services.
But Chinese Internet companies are also exploring their own AI business models, which may not be without their own advantages.
Tencent, for example, the Internet giant with a very diverse business, is taking ecology as the keyword for its own AI layout. According to its responsible person in an interview with the media Yuan Yuan is just an outlet for Tencent’s hybrid big model. Tencent’s internal is not all in the big model, but the big model is inside any product.
Figure There are countless possibilities for Tencent’s AI technology under the huge business ecology, AI charting
Although it is not as rich as Microsoft in cloud services, WeChat’s layout in the C-suite is all over the content Advertising Social Life Finance This kind of ecology can’t be compared even with Meta and Google. Of course, the mature business model is too early for Meta and Mixed Big Model, but this kind of AI layout that is completely immersed in a huge ecosystem obviously has more possibilities than a single AI application. Jitterbug is also another way to enter the AI toy market, conspicuous bag , BubblePal has become a hit. Jitterbug, also including Alibaba in the field of AI, an advantage is that they have a huge advertising ecosystem consisting of e-commerce content, and AI can improve the conversion efficiency Google has proved that this is feasible.
Although it is not as rich in cloud services as Microsoft, WeChat’s layout in the C-end is all over the content Advertising Social Life Finance This ecology is not comparable even to Meta and Google. Of course, the mature business model is too early for Meta and Mixed Big Model, but this kind of AI layout that is completely immersed in a huge ecosystem obviously has more possibilities than a single AI application.
Jitterbug is also another way to enter the AI toy market, conspicuous bag , BubblePal has become a hit. Jitterbug, also including Alibaba in the field of AI, an advantage is that they have a huge advertising ecosystem consisting of e-commerce content, and AI can improve the conversion efficiency Google has proved that this is feasible.
04 Wherever there is good business
There are many other areas where the US and Chinese Internet are showing opposite trends in 2024 The hormonal side of the economy. The recent hit OnlyFans raked in $6.6 billion in revenue a year, growing at a rate of 19 , while on the other side, Stranger has seen consecutive declines in revenue and profit.
There are many other areas where the US and Chinese Internet are showing opposite trends in 2024
The hormonal side of the economy. The recent hit OnlyFans raked in $6.6 billion in revenue a year, growing at a rate of 19 , while on the other side of the street, strangers have seen a continuous decline in revenue and profits.
On the long-form video side, Lovecraft’s results are under pressure to grow, with its latest net profit coming in at just $229 million, but Nifty’s stock has hit record highs in the face of short-form video offerings like TikTok Reels. The latest quarterly earnings have reached $2.364 billion, with a net profit margin of more than 20 , a truly excellent business.
Chart The share price trend of Lovecraft Up Nifty Down over the past year also mirrors the trend in their profits
On the OTA side, Ctrip’s results shone, with net profit jumping more than 40 percent, generating $6.765 billion in net profit on $15.8 billion in revenue in the third quarter. But Booking’s profit growth is somewhat stagnant. On the social media side, Reddit successfully went public in March 2024, and although it briefly experienced a bust, its stock price has now more than tripled its pre-IPO value. As an old business model, Reddit’s business performance is anything but old. In the third quarter, Reddit’s revenue grew 67 87 year-on-year, making it profitable for the first time since its inception, and daily users grew 47 year-on-year. And Reddit’s user structure is still unusually young. At the same time that young people in China have embraced short videos, even middle-aged and elderly people are no longer in favor of BBS in 2024, young people in the United States is still a massive influx of a kind of old community, this huge difference is really difficult to explain. Although it is impossible to explain the reasons for the formation of all the differences, but one thing is certain, China and the United States Internet do not have to envy each other, every market will always have good business.
On the OTA side, Ctrip’s performance shone, with net profit soaring by more than 40 percent, creating a net profit of 6.76 billion yuan on revenue of 15.8 billion yuan in the third quarter. But Booking’s profit growth is somewhat stagnant.
On the social media side, Reddit successfully went public in March 2024, and although it briefly experienced a bust, its stock price has now more than tripled its pre-IPO value.
As an old business model, Reddit’s business performance is anything but old. In the third quarter, Reddit’s revenue grew 67 87 year-on-year, making it profitable for the first time since its inception, and daily users grew 47 year-on-year. And Reddit’s user mix is still unusually young.
At the same time that young people in China have embraced short videos, even middle-aged and elderly people are no longer in favor of BBS in 2024, young people in the United States is still a massive influx of a kind of ancient community, this huge difference is really difficult to explain.
Although it is impossible to explain the reasons for the formation of all the differences, but one thing is certain, China and the United States Internet do not have to be envious of each other, every market will always have good business.
Header image credit AI Mapping
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