Alibaba and the 40 services: the embodiment of ambient commerce!
In its quarterly results (announced 08/20/20), Alibaba reported doubling its net profit to $ 6.7 billion and revenue growth of 34% (22 billion dollars) year on year! If the SARS epidemic of 2003 was the year of the launch of its Taobao marketplace, 2020 during the Covid 19 period seems to stimulate online sales of its two platforms Taobao and Tmall.
If the turnover is mainly due to the Chinese market (in total 75% achieved via its brands Taobao.com and Tmall.com) and the excessive democratization of live shopping (Taobao Live), O2O (Offline to online), Alibaba via AliExpress (international counterpart to Taobao and Tmall) is also trying to conquer the Western world by planning to recruit up to 100,000 influencers. Alibaba recently launched its 1st AliExpress pop-up store in France.
Since 2003, the Chinese giant has developed with extreme attention to the customer through its market places (Taobao, Tmall). This attention is now paid day after day as closely as possible to the life of the citizen. Alibaba is above all a real service ecosystem supported by its Alipay mobile payment solution launched in China in 2004! It relies on a veritable service empire, operating in a multitude of different professions including finance, health, smart home, tourism, distribution and IoT. Alibaba has everything to offer “life packages” that will encompass all aspects of everyday life, namely the “life industry”.
The Fact: Alibaba, the company inseparable from the lives of millions of Chinese.
Over the entire 2019-2020 fiscal year, ended in March 2020, Alibaba recorded sales of $ 71.98 billion, an increase of 35% over one year.
If the pandemic, lockdown and social distancing have forced consumers to turn to retail platforms, it is also due to Alibaba’s omnipotent presence and constant innovation in Chinese people’s lives. When Daniel Zhang, successor to the iconic Jack Ma, says “The world is moving towards ‘digital first’ and ‘digital everywhere’. We believe that our infrastructure and our means will allow us to play an important role in this movement “, these are not empty words.
Beyond pure commerce – Alibaba is the father of O2O (Online to Offline) – they have also participated in the fight and research against Covid 19.
Indeed, as of February 11, 2020, the Chinese government partnered with Alibaba to develop a color-coded health rating system (called Alipay Health Code) that tracked millions of people every day. Citizens were required to sign in to Alibaba’s Alipay app, which now accounts for nearly 55% of China’s mobile payment market in a country where nearly 90% of the population uses an electronic wallet. Only people who received a green QR code were allowed in public areas.
Upstream, Alibaba, under the Alibaba Cloud brand, developed an AI system capable of detecting COVID-19 on a tomographic scan of a patient’s chest in 20 seconds, with an assumed accuracy of 96%. The system was trained on images and data from 5,000 confirmed cases of COVID-19, and is said to be in use by at least 1,000 health facilities in China already.
Alibaba with its financial arm (Ant Group), its ambient retail (O2O) embodied by its various retail platforms, its cloud computing offer (Alibaba cloud) and IoT (AliOS Things), its health entity (Alihealth) and Smart city (Brain city) is becoming inseparable from the lives of millions of Chinese.
Ant financial the matrix of the empire
Founded in 2014, the financial arm of Alibaba, Ant Group (already 10th largest banking market capitalization in the world) has revolutionized mobile payment with its Alipay application, which has become the means of payment representing 55% of the Chinese market (800 million active users). where nearly 90% of the population uses an electronic wallet. If, unlike in Western countries, payments do not generate profit in China, they are first and foremost a source of customer data, subsequently making it possible to refine contextualized service offers or more concretely to propose cross-selling of loans and savings products. Digital payment marks the start of a continuous and long-term customer relationship thanks to the wealth of information collected.
Thanks to the plethora of customer data on its platforms, Alibaba wants to develop personalized services in its physical stores like its flagship brand ‘Ultra connected’, and symbol of New Retail and the O2O (Online-to-Offline model) Freshippo (more than 200 brands). Alibaba is convinced that the use of its digital wallet ‘Alipay wallet‘ will break the rules by making the customer journey more fluid (fewer checkouts and increased use of ‘scan pay and go‘ and ‘smile to pay’) and interaction with products (AR use, product recognition).
Terry Von Bibra, (European manager of Alibaba) did not hesitate to redefine the consumer: “The consumer does not care about online and offline,”; “No consumer in the world gets up in the morning and says‘ I’m going to buy some shoes “online”. The latest successes of Taobaolive and Freshippo are the perfect illustrations.
Manufacturing and logistics
If New retail is above all the symbol of ambient retail, Alibaba wants to go faster in the back office and at the production level. On 09/24/2020 Alibaba unveiled its factory dubbed Xunxi Digital Factory (established in 2018) as part of its “New Manufacturing” program, whose matrix is consumer-centric production by leveraging cloud computing, IoT and AI or Alibaba cloud. For example, it will be possible to have a tailor-made production method, which is based on real-time consumption data and market trends, aggregated from the various Alibaba commerce platforms (Alibaba. com, Hemo, AliExpress and Taobao…). Alibaba wants to be the spearhead of consumer-to-manufacturer (C2M)! According to the latter, this advance will reduce production costs by 20 to 30%!
Alibaba has its own Canaio logistics entity which must manage 200 million parcels daily. Beyond its automated warehouses, its own aircraft fleets, its deliveries by drones, the latter has just launched an autonomous delivery system ‘Xiaomanlv‘ which can transport around fifty packages at a time and carry out around a hundred kilometers in a single charge. The latter have been extensively tested during containment.
After transforming retail and consumption, Alibaba through its subsidiary Fliggy (integrated into Alipay) is revolutionizing tourism with its reservation platform in hotels around the world. Likewise, Alibaba has created its own hotel, FlyZoo Future Hotel, where robots serve meals, meet customer needs, and where all formalities are carried out through Alipay and a facial recognition system. Fliggy on September 25, 2020 joined forces with the Louvre to broadcast a live virtual tour of the palace and its famous masterpieces.
Alibaba is also a true healthcare entity covering all trades: from research, medical consultation to home delivery of medication. For example, through the Alipay application it was possible to have a free teleconsultation during the pandemic. Of course Alihealth played a major role in developing the color-coded health assessment system (called Alipay Health Code) that tracked millions of people every day during the Covid 19 pandemic.
First launched in September 2016 by Alibaba Cloud, City Brain is mainly used to improve traffic flow, make live traffic forecast and detect traffic incidents. All of the data comes from video cameras.
To date, traffic offenses are reported with an accuracy of 95%. According to Jing Zhi, deputy head of the Zhejiang Province Public Security Department, the system has more than 110 autonomous warning capabilities and 1,300 traffic lights controlled by AI.
Alibaba introduced City Brain in 23 other cities including Suzhou and Guangzhou in China, as well as some cities in Malaysia. It works to move from managing the urban flows of existing cities, to building the cities of the future where education, culture, the environment, health (Alypay health code) and social scoring are the flagship projects.
Alibaba has set up an urban planning laboratory with the municipality of XiongAn, to help its transformation into a digital city. As a reminder, Alibaba is tasked by the government with creating the smart city of tomorrow! According to Yang Baojun, president of the Chinese Academy of Town Planning and Design, “all levels of change in the city will be operated by AI”
City Brain‘s slogan is flawlessly clear: “Utilizing comprehensive real-time city data, ET City Brain holistically optimizes urban public resources by instantly correcting defects in urban operations. This has led to numerous breakthroughs in urban government models, service models, and industrial development. “
Beyond integrating its ALIOS operating system into numerous vehicles across China in order to deliver these contextualized services, Alibaba is also a dynamic player in the auto market! For this Alibaba is the shareholder of Xpeng considered with Nio as the counterpart of Tesla in China. Finally, like Amazon with the acquisition of Zoox, Alibaba has invested heavily in the start-up AutoX (a young Chinese manufacturer of autonomous cars) which already has autonomous taxis in the city of Shanghai. One can think that the latter will pass under the fold of Didi Car (the Chinese Uber) entity of Alibaba.
Smarthome and ambient services
Alibaba plans to invest 10 billion yuan ($ 1.15 billion) to accelerate the integration of AI and its IoT supported by its smart speaker, Tmall Genie. These enhancements will include the integration of Alipay mini-apps as well as more content and services from Alibaba’s larger ecosystem that spans leisure, healthcare, online shopping, education and of course shopping. smarthome.
A few concluding words
Alibaba thus pre-empts all the interstices of our moments of consumer life under the guise of Artificial Intelligence (Alibaba cloud) and IOT (ALIOS). Daniel Zhang’s empire wants to make our journey of life as consumer and citizen more fluid under the guise of ambient services. Based on its omnipotent platform (inexhaustible source of data),
Alibaba brings together all the components of ubiquitous daily support! This is all the more edifying, as Alibaba affirms the power of its digital ID (Internet Finance Authentication Alliance) and wants to generalize it across the whole country.