Digital Economy 5.0 — Breaking Down Geographical Borders
Date: 22-05-2019
Digital Economy 5.0 denotes the breaking down of geographical borders and different sectors through the introduction of modern technology, marking the need for a shift in strategies to succeed in the rapidly transforming business landscape.
As of 2018, Alibaba has become the equivalent of the 22nd largest economy in the world and aims to become the 5th largest global economy by 2036. Speaking to more than 100 PMEs from NTUC UFLX on 21 May 2019, SIRS Digital Commerce Lead David Lee shared some of his insights to what has made Alibaba such a successful company, and what will propel them further as they strive towards their 2036 goals.
In his analysis, David identified 5 key points that makes Alibaba a global force to reckon with.
1. Complete online and offline integration
The digitalisation of the economy has resulted in many business owners moving their sales and marketing strategies online, often neglecting the importance of the offline segment. Rather than focusing only on a single aspect of the business, Alibaba instead closes the gap between the online and the offline in what Jack Ma terms as “New Retail”. The concept of New Retail redefines the role of each space in the consumer journey – an online journey that emphasises on interactive, engaging content, an offline journey that focuses on experiential marketing, and a seamless movement between the online and offline spaces. Hema Xiansheng Supermarket, with its seamless integration of technology in the shopping experience, is a perfect showcase for Alibaba's vision of New Retail.
2. Seamless, end-to-end logistics
One key challenge that retailers face in moving to an online space is the logistics and fulfilment of goods and services to consumers. The integration of Alibaba’s services with Cainiao, an end-to-end fulfilment service that leverages sophisticated technology such as the Internet of Things (IOT) for automated picking and packing, down to last-mile delivery of orders. Synergising automation and Big Data, Cainiao takes on logistical challenges during the 11.11 Global Shopping Festival with ease, delighting countless end-consumers with the speed, efficiency, and accuracy of order fulfilments.
3. Marketing powered by Big Data
With the plethora of available platforms and services under the Alibaba Group, marketing services has become key in ensuring the success of their partners and merchants. Alimama, the marketing arm of Alibaba Group provides a full suite of marketing services, ranging from search marketing, display marketing, and programmatic marketing, powered by Big Data to ensure that a brand’s messaging is effectively communicated to the target audience.
4. Payment and financial services
With a valuation of US$150 billion, Ant Financial is China's most valuable financial technology company. Known formerly as Alipay, Ant Financial provides financial services from payment of goods, to loans, insurance, and investments for consumers, integrating the crucial element of a convenient payment gateway to their range of services.
5. Artificial intelligence and machine learning technologies
Finally, all the above is further optimised through cutting edge artificial intelligence (AI) and machine learning (ML) capabilities. For instance, through machine learning, Alibaba is able to determine the optimal product listing format for maximum conversion. Artificial intelligence then enables the product listing to be automatically adapted into the individual consumer’s preferred format.
What does this mean to my retail business?
The changes that come along with the transformation of the retail industry may sound daunting, but it also presents an unprecedented opportunity for retailers.
SIRS provides a range of courses by the Alibaba Business School, equipping business owners and digital professionals with the latest skills and knowledge to thrive in this increasingly competitive and challenging landscape. Contact us today to find out more.