The Tech Giants Growing Behind China's Great Firewall
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The Tech Giants Growing Behind China’s Great Firewall

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The Tech Giants Growing Behind China's Great Firewall

The Tech Giants Growing Behind China’s Great Firewall

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Every day, your feeds are likely dominated by the latest news about Silicon Valley’s biggest tech giants.

Whether it’s Facebook’s newest algorithm changes, Amazon’s announcement to enter the healthcare market, a new acquisition by Alphabet, or the buzz about the latest iPhone – the big four tech giants in the U.S. are covered extensively by the media, and we’re all very familiar with what they do.

However, what is less commonly talked about is the alternate universe that exists on the other side of China’s Great Firewall. It’s there that four Chinese tech giants are taking advantage of a lack of foreign competition to post explosive growth numbers – some which compare favorably even to their American peers.

Bizarro World

Like the “Bizarro Jerry” episode of Seinfeld, the Chinese-based tech giants look recognizably familiar – but markedly different – to the ones we know so well.

Alibaba

Likely the best known of China’s tech giants, Alibaba is the dominant online retailer in the country. The company had revenues of $25.1 billion in 2017 and is seeing that revenue grow at impressive speeds. In its most recent quarterly results (Q3, 2017), the company noted a 56% jump in revenue.

Amazon’s tough sell: Amazon does exist in the Chinese market, but it just has trouble competing with Jack Ma’s creation. Amazon has less than a 1% share of the e-commerce space in China, after a decade of trying to get a foothold. Further, Alibaba also runs AliCloud, which provides direct competition to Amazon’s AWS.

Baidu

Baidu is the largest search engine in China and also a leading player in AI. It’s the most visited website in China, and ranks #4 globally. The company will announce 2017 annual results in the coming weeks, after reporting a 29% jump in revenue in Q3 2017.

Google’s searching for a way in: Google was blocked in China in 2010 after refusing to filter search requests. However, since then, the giant has been able to take very small steps in entering the Chinese market – even though its signature search engine is still blocked, Google now has at least three offices in the country.

Tencent

Tencent has recently been in the news for its rapidly surging stock. The company, which owns the dominant social platform in China (WeChat), is now valued at over $500 billion. For those keeping tabs, Facebook is currently worth $550 billion.

It’s complicated: Facebook remains blocked by China, meaning that Zuckerberg and company can’t take advantage of a 1 billion plus market of people with growing buying power. Even if it found its way in, there are multiple social platforms in China and competition would be stiff.

Xiaomi

Dubbed as “China’s Apple”, Xiaomi is one of the world’s most valuable private companies. Things have been hot and cold for the ambitious smartphone manufacturer, but recently reports have surfaced that Xiaomi will IPO in the second half of 2018 for upwards of $50 billion.

Apple’s shine has dulled: Apple’s entrance into the Chinese market was once described as a success, but recently competition from domestic manufacturers has derailed that claim.

Crossing Over

After a new round of financing, Bytedance – a Chinese company specializing in short-form video – surpassed Uber as the most valuable startup in the world, valued at $75 billion.

bytedance tik tok

Unlike some of its peers, Bytedance has found success outside of China. Tik Tok, for example, has well over 300 million users world wide, and the company is making investments into other popular broadcasting platforms, such as Live.me.

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Ranked: Big Tech CEO Insider Trading During the First Half of 2021

Big Tech is worth trillions, but what are insiders doing with their stock? We breakdown Big Tech CEO insider trading during the first half of 2021.

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Big Tech CEO Insider Trading During The First Half of 2021

When CEOs of major companies are selling their shares, investors can’t help but notice.

After all, these decisions have a direct effect on the personal wealth of these insiders, which can say plenty about their convictions with respect to the future direction of the companies they run.

Considering that Big Tech stocks are some of the most popular holdings in today’s portfolios, and are backed by a collective $5.3 trillion in institutional investment, how do the CEOs of these organizations rank by their insider selling?

CEOStockShares Sold H1 2021Value of Shares ($M)
Jeff BezosAmazon (AMZN)2.0 million$6,600
Mark ZuckerbergFacebook (FB)7.1 million$2,200
Satya NadellaMicrosoft (MSFT)278,694
$65
Sundar PichaiGoogle (GOOGL)27,000$62
Tim CookApple (AAPL)0$0

Breaking Down Insider Trading, by CEO

Let’s dive into the insider trading activity of each Big Tech CEO:

Jeff Bezos

During the first half of 2021, Jeff Bezos sold 2 million shares of Amazon worth $6.6 billion.

This activity was spread across 15 different transactions, representing an average of $440 million per transaction. Altogether, this ranks him first by CEO insider selling, by total dollar proceeds. Bezos’s time as CEO of Amazon came to an end shortly after the half way mark for the year.

Mark Zuckerberg

In second place is Mark Zuckerberg, who has been significantly busier selling than the rest.

In the first half of 2021, he unloaded 7.1 million shares of Facebook onto the open market, worth $2.2 billion. What makes these transactions interesting is the sheer quantity of them, as he sold on 136 out of 180 days. On average, that’s $12 million worth of stock sold every day.

Zuckerberg’s record year of selling in 2018 resulted in over $5 billion worth of stock sold, but over 90% of his net worth still remains in the company.

Satya Nadella

Next is Satya Nadella, who sold 278,694 shares of Microsoft, worth $234 million. Despite this, the Microsoft CEO still holds an estimated 1.6 million shares, which is the largest of any insider.

Microsoft’s stock has been on a tear for a number of years now, and belongs to an elite trillion dollar club, which consists of only six public companies.

Sundar Pichai

Fourth on the list is Sundar Pichai who has been at the helm at Google for six years now. Since the start of 2021, he’s sold 27,000 shares through nine separate transactions, worth $62.5 million. However, Pichai still has an estimated 6,407 Class A and 114,861 Class C shares.

Google is closing in on a $2 trillion valuation and is the best performing Big Tech stock, with shares rising 60% year-to-date. Their market share growth from U.S. ad revenues is a large contributing factor.

Tim Cook

Last, is Tim Cook, who just surpassed a decade as Apple CEO.

During this time, shares have rallied over 1,000% and annual sales have gone from $100 billion to $347 billion. That said, Cook has sold 0 shares of Apple during the first half of 2021. That doesn’t mean he hasn’t sold shares elsewhere, though. Cook also sits on the board of directors for Nike, and has sold $6.9 million worth of shares this year.

Measuring Insider Selling

All things equal, it’s desirable for management to have skin in the game, and be invested alongside shareholders. It can also be seen as aligning long-term interests.

A good measure of insider selling activity is in relation to the existing stake in the company. For example, selling $6.6 billion worth of shares may sound like a lot, but when there are 51.7 million Amazon shares remaining for Jeff Bezos, it actually represents a small portion and is probably not cause for panic.

If, however, executives are disclosing large transactions relative to their total stakes, it might be worth digging deeper.

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The World’s Most Used Apps, by Downstream Traffic

Of the millions of apps available around the world, just a small handful of the most used apps dominate global internet traffic.

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The World’s Most Used Apps by Downstream Traffic Share

The World’s Most Used Apps, by Downstream Traffic

Of the millions of apps available around the world, just a small handful of the most used apps dominate global internet traffic.

Everything connected to the internet takes bandwidth to view. When you look at something on your smartphone—whether it’s a new message on Instagram or the next few seconds of a YouTube video—your device is downloading the data in the background.

And the bigger the files, the more bandwidth is utilized. In this chart, we break down of the most used apps by category, using Sandvine’s global mobile traffic report for 2021 Q1.

Video Drives Global Mobile Internet Traffic

The biggest files use the most data, and video files take the cake.

According to Android Central, streaming video ranges from about 0.7GB per hour of data for a 480p video to 1.5GB per hour for 1080. A 4K stream, the highest resolution currently offered by most providers, uses around 7.2GB per hour.

That’s miles bigger than audio files, where high quality 320kbps music streams use an average of just 0.12GB per hour. Social network messages are usually just a few KB, while the pictures found on them can range from a few hundred KB for a low resolution image to hundreds of MB for high resolution.

Understandably, breaking down mobile downstream traffic by app category shows that video is on top by a long shot:

CategoryDownstream Traffic Share (2021 Q1)
Video Streaming48.9%
Social Networking19.3%
Web13.1%
Messaging6.7%
Gaming4.3%
Marketplace4.1%
File Sharing1.3%
Cloud1.1%
VPN and Security0.9%
Audio0.2%

Video streaming accounts for almost half of mobile downstream traffic worldwide at 49%. Audio streaming, including music and podcasts, accounts for just 0.2%.

Comparatively, social network and web browsing combined make up one third of downstream internet traffic. Games, marketplace apps, and file sharing, despite their large file sizes, only require one-time downloads that don’t put as big of a strain on traffic as video does.

A Handful of Companies Own the Most Used Apps

Though internet traffic data is broken down by category, it’s worth noting that many apps consume multiple types of bandwidth.

For example, messaging and social network apps, like WhatsApp, Instagram, and Snapchat, allow consumers to stream video, social network, and message.

Even marketplace apps like iTunes and Google Play consume bandwidth for video and audio streaming, and together account for 6.3% of total mobile downstream traffic.

But no single app had a bigger footprint than YouTube, which accounts for 20.4% of total global downstream bandwidth.

CategoryTop Apps (Category Traffic)Category Traffic Share
Video StreamingYouTube47.9%
Video StreamingTikTok16.1%
Video StreamingFacebook Video14.6%
Video StreamingInstagram12.1%
Video StreamingNetflix4.3%
Video StreamingOther5.0%
Social NetworkingFacebook50.5%
Social NetworkingInstagram41.9%
Social NetworkingTwitter2.4%
Social NetworkingOdnoklassniki1.9%
Social NetworkingQQ0.7%
Social NetworkingOther2.9%
MessagingWhatsApp31.4%
MessagingSnapchat16.5%
MessagingFacebook VoIP14.3%
MessagingLINE12.1%
MessagingSkype4.1%
MessagingOther21.6%
WebGoogle41.2%
WebOther58.8%

The world’s tech giants had the leading app in the four biggest data streaming categories. Alphabet’s YouTube and Google made up almost half of all video streaming and web browsing traffic, while Facebook’s own app, combined with Instagram and WhatsApp, accounted for 93% of global social networking traffic and 45% of messaging traffic.

Traffic usage by app highlights the data monopoly of tech giants and internet providers. Since just a few companies account for a majority of global smartphone internet traffic, they have a lot more bartering power (and responsibility) when it comes to our general internet consumption.

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