Alibaba, TenCent, Baidu and the top ten most disruptive mega-platforms

I was surprised to read The Economist this past week complaining that the idea of the business platform is confused by overuse. There is confusion, but that's mainly because of the way people in the West construct their view of the global economy.

When we see the global economy, we see continuity. But our vision is clouded by hope. It would be comforting to think changes in the global balance of power will come gradually. But actually it is going to hit us fast.

Within four years the shape of global trade will have changed completely.

If you take a view of the future based on the obvious presence of discontinuity then platforms are not at all confusing. They are very clearly the cause and the vehicle for the coming disruption of global trade.

Platforms have been quietly restructuring global trade for some time, as I explain in Platform Disruption Wave.

Again going back to that Western perspective, US and EU governments are hardly registering the transformation.

Trade negotiations led by the United States have been centered on TPP and TTIP. That is so 1970s. Worse, these are the new multilateral trade agreements that exclude China.

You cannot trumpet new trade agreements that exclude the country whose trade position already dominates supply chains and will dominate a lot more.

China is not going to allow sit back while TPP and TTIP become some perverse version of trade realities. China is taking a number of steps to use its own spending power to promote platform-based trade as an alternative to traditional trade mechanisms.

Look at the way it is driving overseas sellers into e-commerce trade in the free trade zones. The $182 billion committed to broadband Internet. The $6.4 billion invested in Internet logistics support.

China is determined to champion platform disruption. All four of its major web companies (the BATs plus JD.Com) are headed in that direction. And they are being charged with developing interior trade routes as well as global trade.

By pivoting trade around platforms, in place of multilateral agreements, China gains greater influence in all other trade related services. For example finance, logistics, Cloud computing, and payments.

Policy is the next battlefield. Where it leaves business is a big question.

In five years time a new wave of e-commerce giants will straddle the planet controlling $3-4 trillions in direct to consumer trade along with clever but scary IP programs.

These are attempts to turn goods (grain, tractors) into intellectual property that farmers rent - like Monsanto's global seed rental and John Deere's agribusiness products.

They also show you what platforms are really about - leveraging third party assets (in this case farmland now owned by the platform) in new ways.

Who comes out on top? What would a top 10 of the next business platform look like?

Alibaba, rival JD.com, potentially TenCent and Baidu, Rakuten, John Deere, Monsanto are clear favorites to join a top 10 global platform list.

The latter two seem oddly placed along e-commerce regulars but business is changing fast and these two are pioneers.

Amazon.com, Xiaomi, IngDan, DeutchePostDHL, WalMart, eBay are likely to feature.

Deutsche Post is already setting its sights on becoming an e-commerce platform in order to tie up the logistics end of their business. Walmart is busy recruiting so that it can accelerate into cross border e-commerce.

China Construction Bank, HDFC, SAP, Ericsson, Hitachi, Hyundai could be up there too because they are all doing stuff that illustrates their awareness of a much radicalised future where core competency is no competency and where what counts is daring to be very different from yesterday's companies.

Google might make a showing in this list and some would argue that Facebook must be there too, but these platforms are too entrenched in advertising to compete big time in global cross-border trade (OK, Google Play gets some kudos!)

Apple in four years time will still be undecided about its role in a global marketplace, defined by companies (those who are not Apple!) who stretch themselves well outside their comfort zone.

But keep an eye on this space. We are watching trade being redefined by platforms. We are watching wealth creating activity being transformed.