Richard Liu Criticizes Internet Monopoly: Unfortune for China if still BAT Decade Later

“The Internet is a natural monopoly industry, and if it is still dominated by Baidu, Alibaba and Tencent in a decade, it will be most unfortunate for China,” Richard Liu said at the release of Qihoo 360 CEO Zhou Hongyi’s new book in Beijing on November 19.

Liu attended the book release for Zhou’s “Game-Changer: Autobiography of Zhou Hongyi.” He said that like Zhou, he is a game changer in another field, and the two share a mutual appreciation.

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Previously, the Internet was subject to barbaric development without clear rules, Liu said. Things have improved in the past two years, but it has been more polarized and the flow has become more concentrated. It is the same globally: the Internet naturally trends toward monopoly.

“It’s hard to have a monopoly in traditional industries, at least without the help of an executive order or major event,” Liu said, “But the Internet creates natural monopolies. In the process, you inevitably have to conflict with others. We didn’t want to conflict with anyone, but when your throat is being strangled and the company is dying, people always struggle. You might say something, and the media will magnify it and call you a warmonger. However, our hand was forced.”

JD.com was not the first to the market with its business model.

“We happened to enter the e-commerce industry, and we survived after intense competition. When we entered the industry in 2004, we were nothing,” Liu said. In 2006, Liu and his team asked companies that published e-commerce rankings whether they could publish a Top 20 list: at the time, JD.com could not make it into the Top 10. After 2012, JD.com moved into second place in the industry. He regretted entering the industry too late. “If I had started an e-commerce company six years earlier (when I was 25 years old), I wouldn’t be called a ‘runner-up’ all the time,” he said.

China’s Internet is poised to enter a period of civilized development with fewer attacks, he said. This process may only take five years. If it takes 20 years, hundreds of millions of young people will be disappointed, he said.

“The world’s Internet industry is moving toward a monopoly, which is dangerous. So, businesses not only need to fight, but also need to keep calling on each other to move the industry forward. That will give countless new entrepreneurs a chance. If China is still dominated by Baidu, Alibaba, Tencent, JD.com or 360 in one or two decades, it will be most unfortunate,” Liu said.