Amidst the ongoing US-China Trade war hitting a new low – creating the worst mess for the global trade and economy – Jack Ma, Chairman of Alibaba Group has a huge challenge staring at him even after announcing his retirement: How to future-proof the US$ 400 billion+ company and give it a direction for growth? While Alibaba’s eCommerce and Financial businesses are on a steady growth path, the investors are keenly looking at its technology business – Alibaba Cloud – where the company has shown enormous surge – somewhat similar to that of its US-based rival AWS.
Many questions emerge from Jack Ma’s recent investor’s address – his first after announcing retirement.
- What would be the new avenues for growth for the company?
- Can Alibaba Cloud, the booming technology platform, become the next growth engine for and also help it innovate or reinvent the business models in other domains?
- Can Alibaba change tracks with the help on an in-house army of technologists and data scientists by redefining the ways it approaches the new sectors like energy, and manufacturing besides its traditional strongholds like retail, ecommerce and finance?
A couple of days ago, while addressing a large global gathering of technology users and analysts at The Computing Conference 2018 in Hangzhou, China, Ma gave a glimpse of how he looks at the future not just to counter the trade war between the two arch rivals but also to augment tech-assisted growth.
“Industry is going through a shift from IT (information technology) to DT (digital transformation). IT provided the benefits but those were limited to the boundaries of an enterprise. DT is benefiting a larger ecosystem, addressing problems of larger magnitude. To be relevant and competitive, the Industry has to embrace the digital platform approach or run the danger of hitting the end of road,” he said.
In line with the country’s ambition to embrace machine learning/AI and become the world leader in AI research by 2030, Alibaba has also a lot going in its AI, IoT and Big Data research labs, which the company is readying to exploit in the 5 NEWS that defines the new Alibaba: new retail, new finance, new energy, new technology and new manufacturing.
For any industry or organisation to grow and make a formidable impact on people’s lives, it is critical to harness the power of data. You need to collect the right data from the right the source (that’s IoT) apply logic and algorithms to it (that’s AI) and harness the value (big data analytics).
Alibaba seems convinced that its future lies in how it harnesses the real value from its technology research and use it for its advantage in the new sectors like renewable energy, manufacturing, and retail.
“The meaning of IoT is no more Internet of Things; its Intelligence of Things. Similarly, Big Data isn’t about the volume of data but the computing of data into insights,” said Jack Ma.
Industries globally are aiming at upping the customer experience from where it is today. The goal is to track the lifecycle of both the product and customer so that the latter can be serviced better, in a more personalised way. This requires a new level of thinking. “In future, we won’t see specialised manufacturing or specialised services industries. Both will merge. While assembly lines are getting extremely automated and robots are becoming more efficient to do the jobs once done by the humans, the new service-oriented manufacturing is defining the future. If manufacturers focus on service innovations, we will see a different manufacturing industry that will disrupt the existing one,” said Ma.
Future manufacturing will be entirely based on Internet and that will help industry to counter the traditional trade wars, which is currently being waved and is detrimental for the industry and global economy. “The new enterprises, specially the SMEs should ride the wave of technology revolution and take advantage of digital transformation to survive the trade wars,” he said.
Ending his short visionary speech, Jack Ma also underlined the need for innovation and how it will play a decisive role in the future of industry. “No one has time to correct the past. But we all have the responsibility to correct the future, the hope and the new ideas. Innovation is the only key to it. Innovation is about understanding the challenges and creating a path which can fight the fight the forces which obstruct the future,” he concluded.