New-generation businesses

"The world’s largest taxi firm, Uber, owns no cars. The world’s most popular media company, Facebook, creates no content. The world’s most valuable retailer, Alibaba, carries no stock. And the world’s largest accommodation provider, Airbnb, owns no property. Something big is going on."

"But business relationships do not stay stable, particularly if there are huge profits involved. So now we would see the battle of the existing interfaces, with each extending beyond their initial footprint to try to win more territory. So Facebook goes into news, Twitter into television and so on. And because they can be so profitable we will see more and more challenger interfaces, each trying to find some way to get their icon on to your mobile phone or iPad."

The above are taken from an article published in 2015. Today we can see evidently how these 'new generation' intermediary companies have changed the way we used to do things - in a relatively short time-span, and have became an integral part of our life. From a business perspective, I am intrigued with keywords of 'not owning'. These successful businesses rode on technology (connectivity and interfaces), required relatively low start-up cost and cannot be truly valued based on their hard assets. Yet they are generating extraordinary amount of profits compared to traditional businesses of similar capitalization.

From investors' perspective, how many of us were astute enough to recognize values in these businesses at their infancy? We only came to recognize the brands and values in their services when the media or our friends started talking about them. E.g who knows iPhone will become the big 'in' thing when it first launched 10 years ago (2007), bought Apple's shares and held them till today?

What's changing for the fin sector?

"A SURVEY by management consultancy Bain & Co highlights the inroads that big established technology giants could make on turf traditionally occupied by retail banks.

While many traditional retail banks see financial technology (fintech) firms as the primary disruptors to banking, said Bain, "it seems like the established technology players have emerged as the bigger, more immediate threat to retail banking."

On the other hand, large technology firms have the advantage as they are already accessible to most - which put them in a better position to extend their corporate brands into banking, he added. "Many also already sell payment services, credit cards and loans, so it's plausible they will offer a suite of retail banking services in the near future." "


Besides fintech firms, other familiar brands like Grab are also trying to fight on the same turf by extending their Grabpay for use at other merchants. Personally, I do not like having my money 'locked up' in multiple pay-portals e.g grabpay, ezlink, kopitiam card, cash card etc, so I will only top up when the values run low to near zero. Other cashless payment options are emerging faster than I can catch on - Android pay, Paylah, PayNow, DASH, mwallet. Since I have not tried any of those, I cannot comment on how much more convenience they offer over conventional credit cards and the perks of use.

As for how much impact that would have on the retail banks down the road and who shall be the next giant of cashless service - it awaits to be seen.

Online shopping

When the above businesses collaborate, you can see their effect on the online shopping wave like mentioned here.

Speaking of 'not owning', here are some of the popular shopping portals that own no goods - eBay, Amazon, Taobao, Lazada, Qoo10 and Shopee. It is all about UI friendliness over merchandising, range of brands and prices over specialty selling.

Being price-conscious, I like comparing then buying from whichever site that gives me a better deal (and better still if there is promo code!) in the comfort of my home. However, online shopping may not be all-satisfying when you need an item urgently, care about the physical 'feel' or when the hue matters.

Healthcare on the go - trending and 'close to my heart'

I graduated from and work in the healthcare sector. So the merger of healthcare, technology and now even with e-commerce is something worth a closer look. I believe its emergence will very much fall in line with the need of aging population and preventative healthcare.

About the up and rising AliHealth in China:

Alibaba Health Information Technology Limited (the “Company”) and its subsidiaries (the “Group”) have been committed to developing Internet technology and establishing a service ecology platform to provide industry partners with technical capabilities such as big data, cloud computing, artificial intelligence and Internet of Things, as well as service capabilities such as operational, quality control and customer service capabilities. Now, the Company concentrates on developing pharmaceutical e-commerce, product tracking system services, intelligent medicine, and health management businesses.



In conclusion, the similarity in all the above booming new-generation businesses is that they are offering consumers trustworthy services at greater convenience than traditional businesses. Who knows perhaps in the near future, we would see a new 'Apple' introducing AI, driver-less hover cars and robots to our daily life.


Recommended reading: Growth Stock.


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