At a time when data is consistently being hailed as the new oil and payment systems have disrupted commerce, Chinese internet and e-commerce giant Alibaba has reiterated that the core for the big picture internet landscape in the world is ‘data’ and the company is trying to create that data from the real ecosystem.
“The key thing is to embrace the change. The world is changing so fast. Today we are saying that everybody is connected by the mobile internet and tomorrow, everything is connected. We are now moving into IoT, and the Internet will change. And today, when we do payments, people are surprised that in China, in the Southeast Asian markets, people enjoy this mobile wallet payment. But tomorrow, I think that maybe there is no need for mobile wallets. Everybody, every eye, is a wallet. So we can imagine that this day will be coming soon,” said Alibaba CEO Daniel Zhang said in an interview during the consumer goods forum global summit.
Asked, what was next for Alibaba as a company, he noted that all the company does is create data from a real business situations — payment, marketing behavior, logistic flow etc. “With the power of data, we enable our partners to do a better job. It allows doing business everywhere,” Zhang pointed out.
The stress on data and online payments is understandable as Asian internet penetration is growing and 34.9 per cent of the region’s population have smartphones with most of the consumers using it to pay for goods and services. Alipay, an independent online payment platform by Alibaba offers these payments solutions with its e-wallet.
Among other players who have jumped into the payments business are low-cost carrier AirAsia, which in March this year launched its digital payments arm, BigPay and has set its eyes on Southeast Asia’s cross-border remittance and lending businesses, a space that has already witnessed heightened interest from regional and foreign players.
Around the same time, the digital financial services space in Southeast Asia saw ride hailing company Grab announce its fintech business Grab Financial that will include services like mobile payments, lending and insurance for its drivers. It was the time when Alipay had also announced its entry into the region’s five new markets.
Further, the ensuing trade war between America and China seems to not have wavered the confidence that the Jack Ma-founded company has as Zhang noted that the company rides on the strength of China’s large consumption-based economy and growing middle-class incomes. “As long as consumption power is here, other will try to come to this opportunity of consumption,” said Zhang when asked if the trade war had impacted Alibaba in any way.
Speaking on Alibaba, he said the company realized in 1999 that the internet is the next big thing. The company reached a scale of $760 billion in merchandise last year. “The key to Alibaba is how they enable partners to do business better, rather than buying out its partners and trying to sell to customers. It’s the power of the ecosystem they built up,” he said.
Alibaba has invested $3.8 billion this year, placing the company as one of the leading investors in Asia along with other Chinese firms like Baidu and Tencent. Alibaba invested $2 billion and $2.9 billion within a 4-month period in Southeast Asia’s e-commerce company Lazada Group and Chinese hypermarket operator Sun Art Retail Group respectively.
How do you differentiate yourself in an increasingly global market?
Alibaba has a different philosophy. We try to help businesses, providing our service of payment of logistics to help them do their business. Rather than buying, and handling business with customers, we want to be a platform for them to connect. Yesterday we were moving very fast into brick and mortars. The purpose of these kinds of investment is that brick and mortar can create investment. They only need to be upgraded. If we can empower by data then we can do a lot of different things. We can improve the efficiency of operations. Based on the behavior of people around the store, we know what they want.
How has the trade war between America and China impacted Alibaba?
If you look at the big picture of China’s economic landscape, it transformed from investment driven to a consumption-driven economy. Chinese government announced that there be more imports. China will import $8 trillion of goods within the next 5 years. Much of this $8 trillion will be from consumer goods. This states of China’s open door and also the empowerment of the country. China is always the opportunity. First, China wants more global imports and second is to create consumption. As long as consumption power is here, other will try to come to this opportunity of consumption.
What is next?
The key thing is to embrace the change. The world is changing so fast. Today we are saying that everybody is connected by the mobile internet and tomorrow, everything is connected. We are now moving into IoT, and the Internet will change. And today, when we do payments, people are surprised that in China, in the Southeast Asian markets, people enjoy this mobile wallet payment. But tomorrow, I think that maybe there is no need for mobile wallets. Everybody, every eye, is a wallet. So we can imagine that this day will be coming soon.
Our core thing for this big picture is data. All we do is create data from real business situations– payments, marketing behavior, logistic flow etc. We want to create data form the real ecosystem. With the power of data, we enable our partners to do a better job. It allows doing business everywhere.