It took me 17 days in China through observing (my first China article) and meeting locals (my second China article) to realize that it is basically a checkmate for Europe. We are currently witnessing a phenomenon, where Internet giants from China and the US are becoming puppet masters of the future. I am talking about Alibaba, Amazon, Apple, Baidu, Facebook, Google and Tencent.
All these companies have an enormous user base and a payment solution, which is already spreading (or about to spread) all over the world. “So what?”, you may ask. When these payment solutions are widely adopted in a country, the Internet giants will – and in the case of Alibaba and Tencent in China, they already – know:
- What was bought?
- Where was it bought?
- When was it bought?
- How much was bough?
- Who bought it?
And so on. Artificial intelligence will also tell them ‘Why it was bought?’. Then the Internet giants combine a purchase history with an app usage history and voilà! At least I know whom to contact when I need to know something about me.
“Does it matter?”, you may ask. When the Internet giants know the answers to the questions above, national companies, which actually sell us products and services do not get the most important data, ‘who’ and ‘why’. Yes, national companies earn a “quick buck”, but the real long-term value – ‘who’ and ‘why’ – is lost forever. So, advising national companies to take Apple Pay in use or offer Alipay and to serve Chinese tourist is the only thing we can do anymore. Most of Europe lost its opportunity to spread nationally developed payment solutions in our countries. Luckily there are still some companies in the game, like Klarna, which has kept growing and attracting international investments (to see more online payment companies, see a list here).
Have we already witness this phenomenon?
Interestingly we have already witnessed this phenomenon. It is exactly the same play that destroyed media companies’ money-making machines: trading customer data for a “quick buck”. Firstly, in 1990s media companies opened doors to Google to get more visitors (and gave away their most important asset – data – to Google for free). Secondly, media companies repeated the mistake in the 2000s and opened doors to Facebook to get more visitors. The rest is history.
The next game (which is already being played) is artificial intelligence (AI) and ‘consumer in the middle of everything’. If the Internet giants win this game too, they will become the only puppet masters. What happens then? Pricing services according to individual’s risk level based on health, lifestyle and genome? Whatever it is, it will be great for the Internet giants. Perhaps it will be great for you too – if you are healthy, live a low-risk healthy lifestyle and have a good genome.
For me, the payment solution game is already over because of the Internet giants’ massive user bases. I truly hope that the AI and ‘consumer in the center of everything’ game is still on. In Slush 2015 I was very happy to hear that some European companies, like Zalando, are identifying themselves as tech companies. However, are the data, resource and scale advantages of the Internet giants too massive? Right now I believe so. Feel free to educate me on this – which European companies have a shot to be one of the winners in the AI and ‘consumer in the center of everything’ game and why?
I have nothing against Alibaba, Amazon, Apple, Baidu, Facebook, Google and Tencent. They have played this “chess game” brilliantly and I admire them for that. It would actually be brilliant to have an insider view on these topics. Now the questions are:
- Did (we) Europeans learn anything from this payment-related “butt whooping”?
- If (we) Europeans did learn something, what was that?
- If you think that (we) Europeans did not learn anything, what lesson was missed?
Thanks for reading!