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Alibaba’s – Big Data eCommerce Revolution

June 30th, 2016

Alibaba BigData CommerceAlibaba started as an eCommerce Company. Since 2009, senior management has set a goal of transforming Alibaba into a data company. Its data ecosystem is built to collect, process, and utilize all types of user data to improve the customer experience and facilitate commerce. In the last two years, it has successfully become a mobile commerce company that connects digital commerce, media, and entertainment. The foundation is set to transform Alibaba into a leading data commerce company that leverages big data / cloud computing to upgrade all of its businesses, ecosystem partners, and customers.

In the last two years, Alibaba has successfully become an mCommerce (mobile commerce) company, in our view. The success of its mobile transition and ongoing buildup of its mobile ecosystem has set the foundation for the company to become a leading data commerce company and, ultimately, a data company.

One must appreciate the fact that Alibaba has businesses that connect the entire value chain of digital marketing and digital commerce, offering a one-stop solution for brands and merchants. More important, its Unified ID asset tracks and analyzes the digital footprint of its users across screens and platforms. With 500mn+ Unified IDs, it now covers the majority of China’s Internet users. Alibaba is a beneficiary of a much larger addressable revenue pie; we believe it helps its merchants to enhance distribution, marketing, and productivity efficiency.

According to Jack Ma, the competitive dynamics and success of Alibaba’s business units are typically determined in the third year after launch, by the seventh year, these businesses would likely either have reached breakeven and / or have turned profitable and by the 10th year, there would be meaningful revenue and / or earnings contribution from these businesses. Based on this logic, AliCloud will become one of the most significant value drivers by F20; it will follow Ant Financial in the coming three years.

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