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Alibaba’s business remodeling

DIGITAL VENTURES January 29, 2019 3:33 PM

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Last January, Zhang Yong, CEO of Alibaba Group, shares his vision about Alibaba group’s business remodeling. We observed that the Alibaba group has undergone continuous business restructure.  

It has been 2 decades since Jack Ma founded Alibaba. Today, Alibaba is the largest “consumer-based platform” in the world. Alibaba’s main e-commerce platform in China is Taobao and Tmall. Taobao is a platform for retail businesses while Tmall is a platform for brand name businesses.

 

 

From a consumer service perspective, formerly, Alibaba’s business model highlighted bringing offline products to online sales via e-commerce. Today, Alibaba has expanded its business to digital and entertainment products (such as music, games, online clips, e-book, etc.). Alibaba invested in Youku (a famous Chinese website for video clips) and Alibaba Pictures (Alibaba’s movie production company). Also, they have extended the business to the service sector. They invested in Ele.com (the largest food delivery service in China), Fliggy (air ticket and hotel booking service), and Taopiaopiao (cinema ticket service).

 

From a business service perspective, formerly, Alibaba highlighted assisting businesses in their “sales operations”. They have provided a channel for products from small and large businesses to easily and speedily reach consumers via the e-commerce platform. This is coupled with an efficient payment and logistics service. Also, they serviced marketing via big data analysis from their large pool of consumer data.

 

However, today, Alibaba is striving to become a “tech company” and “information company” that will provide businesses with solutions. This will range from “sales operations” to “technology system” and “work management system” for businesses.

In the past, Alibaba invested heavily in the cloud technology that, today, Alibaba Cloud has stepped up as a leader in the cloud service in China. They provide businesses with “technology systems” such as data storage on the cloud, relational database, and big data processing.

 

Alibaba has also launched Dingtalk which provides businesses with an “organization management system”. Dingtalk is an application that supports group chats as well as voice and video conference calls for organizations. Moreover, workflow systems such as leave or payment requests via the application are also available. In comparison, Dingtalk is a chat application for organizations similar to Slack which is rather prevalent in western countries.

 

 

As a result, Alibaba’s present business model has become an open model that connects various sections together. It has become a massive ecosystem which is a solution for consumers and business in the digital economy.

As mentioned earlier, from a consumer service perspective, Alibaba has shifted from just putting offline products on sales via the online e-commerce platform. They have gradually embraced digital and entertainment products as well as the service sector. From a business service point of view, Alibaba shifted from focusing on servicing “sales operations” via the e-commerce platform, logistics, and payment system. They have gradually extended to servicing in “technology systems” via Alibaba Cloud and “work management systems” via Dingtalk.

Today, Alibaba doesn’t view themselves as an “e-commerce company” like in the past. They see themselves as a “technology company” and information company” who utilizes and optimizes resources from the huge number of consumers and businesses on the Alibaba platform.