In an in-depth piece, the business journal has published an analysis by Alibaba insider, Ming Zeng, looking at what the firm does differently from most businesses, beginning with its detailed collection of data and sophisticated APIs that ensure smooth interaction across the company’s interests.
Though the business began in 1999, it was not until 2007 that the company formed the idea of creating an “ecosystem” rather than just an e-commerce website. As such, the company set about building a strategy that would offer “all the resources … that an online business would need to succeed”.
“Alibaba today is not just an online commerce company. It is what you get if you take all functions associated with retail and coordinate them online into a sprawling, data-driven network of sellers, marketers, service providers, logistics companies, and manufacturers”, Ming writes. In short, the company has become Amazon, eBay, Paypal, FedEx, and a manufacturer all at once.
It also details the company’s entry into an untapped loan market in China, which typical financial institutions had so far resisted. Ant Financial used the ecosystem’s behavioural data to analyse potential borrowers. “Indeed,” Ming writes, “every action taken on our platform, affects a business’s credit score.” The organisation’s power is staggering.
To get there, the company needed to build a platform that drew data from every possible customer exchange and software that was capable of serving individuals.
Finally, Ming talks about the adaptation in leadership when talking about fast-changing companies developing totally new ideas.
“They cannot describe concrete steps to realize their companies’ goals because the environment is too fluid and the capabilities they will require are unknowable.
“Instead, they must define what the firm seeks to achieve and create an environment in which workers can quickly string together experimental products and services, test the market, and scale the ideas that elicit a positive response.”
Sourced from Harvard Business Review