Welcome back, we hope you had a great break if you’re based in China. As many of the 637 million trips were ending last week, so to was Jack Ma’s board position at Alibaba Group, as he took a further step back from the company he co-founded in 1999. Under Ma’s leadership, Alibaba became one of the world’s most dynamic companies and one of its most valuable – worth $826 billion as of yesterday, not to mention the $200 billion that Ant Group (of Alipay fame) could be worth after its imminent IPO.
In addition to building a giant ecommerce platform selling more than three times the value of goods as Amazon globally and a mobile payment system that is used by 81% of online Chinese, versus the 9% of Americans who use Apple Pay, Jack Ma also pioneered New Retail in China. This has become a blueprint for the future of retailing and established China as a testbed for retail innovation globally for companies such as Nike, Starbucks, Burberry and MAC.
Alibaba has also driven the uptake of in-video purchasing and livestreaming. Although livestream users appear to have peaked in China, it is starting to be adopted by US brands, and YouTube has just announced plans to create in-video shopping.
Beyond the digital world, Alibaba is also making in-roads in consumer goods categories in everything from food to fashion, utilising its enormous data pool to build and optimise its own products and brands. This will see it increasingly evolve from a partner to a competitor as well. Last month it gave small hints of where this is heading by unveiling its Xunxi Digital Factory in Hangzhou, a smart manufacturing facility which will support customised and demand-driven production. Creating competing brands and products is likely to be followed by China’s other data-rich, cashed-up tech giants, illustrated by ByteDance’s steps to start a coffee and cafe brand.
Few have contributed to China’s transition from a copycat to a global innovator more than Jack Ma (although many believe that his company has also supported IP-theft in China to flourish). Beyond Jack’s well-known uber-innovations, one of his most noticeable impacts has been contributing to the rise of China’s confidence and standing in global internet influence. This has seen China wielding more sway in setting international internet standards which, until recently, has been the preserve of a small group of industrialised democracies.
Alibaba has played a big part in China’s leadership in facial recognition, smart cities and some areas of AI, which are disciplines that are yet to be standardised. The global race for AI supremacy has illustrated just how far values differ between China and the West leading to different prioritises in AI algorithms. The disparity has seen increasing polarisation from standard setters and has contributed to the worsening ‘Tech Cold War‘ between China and the US.
Geopolitical issues aside, it is hard to not be impressed with Jack Ma’s achievements in just 21 years. It would be wise to keep an eye on him and the companies he founded as indicators of what is happening in China and what is likely to roll out in other markets of the world – both as enablers, but also as competitors. Contact China Skinny for help with that.
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