Five Reasons Why Alibaba is a Data (Not E-commerce) Company

Five Reasons Why Alibaba is a Data (Not E-commerce) Company

Five Reasons Why Alibaba is a Data (Not E-commerce) Company
Alibaba Group, the world’s largest e-commerce company, will soon strike the word “e-commerce” from its lexicon, says Alibaba Executive Chairman Jack Ma.

The problem, as Ma sees it, is that e-commerce, as distinct from traditional retailing, is rapidly becoming an outmoded concept as online and offline retailing become fully integrated. But what can you call Alibaba if not an e-commerce company? With its rapidly growing cloud-computing business and its initiatives in fintech, logistics, Big Data, the Internet of Things, artificial intelligence and virtual reality—many of which were outlined at an Alibaba-sponsored computing conference held in Hangzhou, China, last week—even “technology company” doesn’t seem to cut it.

Alibaba officials are making the switch to “data company.” This is because, in a nutshell, “Data is the blood of the new economy,” explained Alibaba Group CEO Daniel Zhang recently. Alibaba collects massive amounts of data on its e-commerce marketplaces, through mobile wallet Alipay, and from from digital entertainment sites and social media properties operating within in its ecosystem. “We use data to refuel (our) business and refuel the participants in the ecosystems to help our partners to do business easier anywhere in this fast-changing digital world,” Zhang said.

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Effectively mined and analyzed, data enables businesses large and small to better understand markets and consumer behavior, improve products and user experiences, and even anticipate the wants and needs of individual customers. As a Morgan Stanley analyst recently noted, Alibaba has laid the foundation to transform itself into “a leading data commerce company that leverages big data/cloud computing to upgrade all of its businesses, ecosystem partners, and customers.”

Here are five ways Alibaba is using data today:

Alibaba uses the vast store of data it collects from its 423 million active buyers to generate personalized storefronts and product pages when consumers shop on Taobao Marketplace or Tmall.com. The feature is called “A Thousand People, A Thousand Faces,” and merchants are using it to deliver not just product recommendations based on a visitor’s shopping history but also individualized virtual-storefront homepages geared for particular types of shoppers.

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