After 20 years of toil, tears and sweat, but most of all, guts and dreams of success, Jack Ma stepped down as the executive chairman of Alibaba. This was on 10th of September – Jack Ma’s 55th birthday, Alibaba’s 20 year anniversary and the Teacher’s Day in China.
Starting together with a team of 17 people in his apartment 1999, Alibaba Group now has a market value of over 460 billion USD, i.e. one of the top 10 worldwide, and over 110 000 employees. According to China Economy Weekly, Alibaba Group paid 516 00 million RMB in corporate tax, in 2018 alone, i.e. more than 100 million per day. When it comes to job creation, Alibaba-related businesses have generated more than 40,8 million jobs in China.
The secrets of Alibaba’s success?
In an extremely simplified way, we may say, Alibaba’s success represents an extremely favorable and timely combination of “being in the right place, with the right technology, the right business model and leadership”.
Hangzhou, a city that used to be an unknown “Shanghai backyard”, is now well-known worldwide as “Alibaba’s hometown”. As Jack Ma put it, Beijing loved state-owned enterprises, Shanghai loved multinationals. Alibaba was nobody in Beijing and Shanghai when it started its business. But they became Hangzhou’s “favorite baby”, building on the strong spirit of “grass-root entrepreneurship” and huge needs to explore the markets outside Hangzhou and outside China.
With Alibaba’s e-commerce platform, the grass-root entrepreneurs and grass-root entrepreneurship were rapidly transformed to “mass net-entrepreneurs” and “net- entrepreneurship”, creating new opportunities for many players throughout a consumer-driven value-chain that has been changed by new technologies and services. Alibaba’s digital platform is not only about transactions, but also for innovation. The new solutions and new services kick-started a true transformation process towards Jack Ma’s ideas of “Made in Internet”, “New Commerce”, “New Manufacturing” and “New Real Economy”.
Another important, but much less known success factor is Alibaba’s focus on women entrepreneurship and the unique opportunities from the digital economy to empower women entrepreneurs. At Alibaba’s e-commerce platform, women entrepreneurs already account for 49 percent of the total. The average annual revenue per women entrepreneur reached 200 000 RMB in 2018, which was an increase by 100 percent compared to 2014 and 30 percent higher than the average annual revenue per male entrepreneur. At the same time, a ratio of female employees above 33 percent is one of the KPIs for Alibaba Group.
What has Alibaba achieved?
Alibaba’s development path is one of the most illustrative and stunning examples of the scale and speed of China’s digital economy. Beyond the size in monetary terms, what has Alibaba achieved in the past two decades? In Alibaba’s own words, it has been a history of acceleration of innovation and simplification of life and business.
Alibaba in the future – more ambitious, more integrated and more value-driven?
Looking ahead, how will Alibaba move forward, departing from and beyond the legacy of Jack ma?
Technically, Alibaba will be even more ambitious. One example is Alibaba’s commitment to and investments in making break-throughs in China’s “Ka Bo Zhi” technologies. Alibaba has already launched its own semiconductor company ”Honey Badger” (known as Pingtou Ge in China). The AIoT era requires a more efficient design approach i.e. based on a basic framework/template, to customize chips that meet the application requirements and push them to market as quickly and precisely as possible. It breaks the limitations of the IP licensing business model in traditional general-purpose chips, which is costly, difficult to use, and with a long cycle. Instead, it will provide enterprises with full-stack technical capabilities for chip design. Also, Alibaba’s global research programme – the Discovery, Adventure, Momentum and Outlook (Damo) Academy – is expected to launch its first neural network chip in 2019 and is currently developing its own CK902 series of smart chips that will form the foundation of its internet of things infrastructure.
As the next step, Alibaba’s platform will be more integrated. The success of Alibaba’s “City Brain” has paved the way to integrate more systems of city life into the platform, which in turn can lead to a truly integrated “Digital Twin Eco-System”.
As a powerhouse for ideas and dreams, Alibaba will think more global and even bigger: Gathering 6 Nobel Prize laureates and 9 leading economists through its research platform Luohan Academy and in dialog with world-leading entrepreneurs, such as Elon Musk, Alibaba will continue to be strong voice on technology and society. As Jack Ma once said, “We feel the obligation that we should use our technology, our resources, and our people to help societies embrace the technological transformation and its implications”.
The digital world is not only full of opportunities, but also a challenging and complex world. And Alibaba is not an exception to this. The implications of technologies to people’s life, the implications of consumption, or more precisely, the sustainability implications of a consumption-driven economy need to be addressed seriously. Alibaba is a great success. But as Jack Ma said, technology can make a company competitive, but values and benefits created for people and the society make a company good and great.
In the future, Alibaba, and also many other Chinese companies will be aiming not only to be big and competitive, but also, good, great and greater…
Nannan Lundin & Linnea Yang