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Focus on the main business can promote firm growth

China Daily | Updated: 2024-05-23 08:37
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A consumer walks past an advertisement of e-commerce platform Pinduoduo at a shopping mall in Shanghai. [Photo provided to China Daily]

In their recently released first-quarter financial reports, major domestic internet giants such as, Alibaba and Tencent have all registered revenue growths exceeding market expectations.

In the early days of internet development, domestic enterprises learned about competition and scale expansion. Some internet companies pursued offline development based on large-scale mergers and acquisitions, and invested a lot of capital to create "flows" in financial, educational, medical care, travel and other fields, resulting in disorderly competition and expansion.

Pinduoduo, a popular e-commerce platform, overtook Alibaba, which was once regarded as an unshakable e-commerce leader, in terms of market value, in November 2023, and Douyin, the Chinese version of TikTok, the video-sharing platform, has grown rapidly, posing a huge challenge to Tencent. Unlike other internet giants, Pinduoduo and Douyin focus on their main business and strive to expand their main business to overseas markets. The strategy of focusing on their main business has helped them gain advantages over competitors obsessed with the diversified investment expansion strategy.

Pinduoduo persists in its "preferential prices and good services" principle, which has helped it realize rapid market expansion. At the same time, providing better services and consumer experiences has also helped it attract new consumers while retaining old consumers. That has prompted Alibaba and to attach greater importance to also providing consumers with competitive prices and better customer experiences to consolidate their main business.

Enterprises should shift from pursuing scale expansion to a people-oriented strategy that focuses on innovation, efficiency and quality. To pursue bigger development, they should take aim at overseas markets and rely on scientific and technological innovation. The era of relying on "burning money" for development has passed, and the era of truly testing enterprises' competitiveness has come.


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