Alibaba Vice President Xiao Lihua: In the next 5-10 years, many industries will be reshuffled! Digital intelligence drives new growth, early layout and early benefit!

      In July just past, the Laogao E-commerce Club held an annual e-commerce summit. At the Thousand People E-commerce Innovation Summit, we invited postdoctoral fellows from Tsinghua University, doctoral in management at the Chinese Academy of Sciences, distinguished professors/visit professors from many famous universities, vice president of Alibaba Group, and dean of Alibaba Cloud Research Institute to share the theme of "Full Speed ​​Reconstruction - Digital Intelligence Drives New Growth" to thousands of e-commerce entrepreneurs on the spot. From the future layout of Alibaba's new retail, it pointed out the direction of development for e-commerce people.

      This is Xiao Lihua's third time to share the scene at Laogao E-commerce Club. He said that he was once a merchant and understood very well that as a merchant, whether it is domestic e-commerce or cross-border e-commerce, the ultimate essence is actually to sell goods. However, in the past, everyone paid more attention to operations and sectors. Now with the advent of the era of dual-wheel drive of consumer Internet and industrial Internet, we should pay more attention to the new growth driven by digital intelligence driven by the dual-wheel drive of consumer Internet and industrial Internet.

The following are the highlights shared by Alibaba Vice President Xiao Lihua:

Why do we need to carry out full-link digital transformation and upgrading?

      Digitalization, as the name suggests, digitalization and onlineization are just the first step, and intelligence is the future.

      From the 2020 Tmall Double 11 global carnival season of 498.2 billion yuan, we can see that the orders for Double 11 in 2020 grew rapidly, the number of users grew very fast, and the receipt speed was faster than before. The consumption upgrade and the industry were comprehensively upgraded, thanks to the strong domestic demand momentum and digital innovation dividends, it has driven the further innovation growth of Tmall Double 11.

      Not only that, cross-border e-commerce, industrial Internet and factories have also been launched. More importantly, many new consumer brands such as Yuanqi Forest and Sandunban have emerged, and they are growing very fast. If it was said that in the past, it took ten to thirty years to achieve hundreds of millions of dollars, then now these brands can achieve hundreds of millions of dollars or even billions of dollars in a year, two, three years.

      Regarding the growth of last year's Double 11 data, Xiao Lihua summarized these reasons: the first is digital consumers of 1 billion, the second is China's huge supply side, the third is that the platform has made efficient and accurate matches, and finally the capital market is promoted.

      After Maslow's theoretical analysis of the demand hierarchy, we can tell us that the essence of human beings is actually social animals, and everyone is a consumer, so consumers are already online. How to enable your consumers and customers to find you quickly needs to be achieved through digital transformation.

      Now many traditional enterprises are transforming digitally, because digitally and online are the future. In the future, all enterprises will be digitally, but they are just using the tools and methods of the Internet to do these things well.

      Simply put, China's online consumer side digital capabilities are far ahead, but the digital level of supply-side is low. We still have huge room for improvement in retail experience, product personalization, and manufacturing flexibility. This situation forces the supply side to continuously reform and upgrade. While we are catching consumers and fans, we must ensure the competition at the end of the product supply terminal. If we do not pay attention to this aspect, there will be no future.

The business world with thousands of upgrades and outbreaks has arrived

      Xiao Lihua believes that it is far from enough for many businesses to spend a lot of time in the private domain. You must continue to expand your user pool, constantly use advanced tools and methods to accurately fish in the public domain, and refine fish farming in the private domain, so that you can have a greater future.

      Driven by the dual wheels of consumer Internet and industrial Internet, we are people-centered, from near-field to far-field to pan-field, and then to supply side, the physical world and digital world are integrating, and the era of ten thousand upgrades and explosions is coming. In the next ten years, we are very sure to tell you that many industries will do it again.

      In the past two or three years, we have seen a very obvious trend. Last year, the total retail sales of the entire society showed negative growth, but companies with better digital transformation can achieve high growth, which means that many companies will experience negative growth if they cannot keep up.

      The ultimate goal of business is efficiency. On the one hand, it is the experience of consumers and on the other hand, it is the efficiency and benefits of business operations. It seems to be people and goods, but the digital and intelligent economy is deeply reconstructing its connotation. Especially the traditional retail sector, in terms of time and space, is very different from e-commerce, so this issue needs to be considered from an operational perspective.

      In his sharing, Xiao Lihua said that what remains unchanged in the people and goods yards is demand, the essence of business is the matching of buying and selling and supply and demand, and what has changed is the concept, method and method! People have higher demands for products and services, and we must also improve human efficiency and timeliness to improve consumer satisfaction. Otherwise, consumers are God and are just empty words.

How do benchmark companies that are at the forefront do?

      The new retail era is a new era of consumer-centricity, leading by smart brands, supporting fast and flexible supply chain, integrating online and offline full-channel and efficient operation. Xiao Lihua believes that the whole ecology of the upper and lower, internal and external, must be connected, including supply chain system, brand, etc., so that there are repeat customers and room for premium.

      Of course, if the company is made more digital, intelligent prediction, intelligent distribution, intelligent replenishment, and intelligent scheduling, this is the technical level, the corporate vision, mission, values, and cultural team sectors are still at the bottom of the company. In essence, we must build an endless ecosystem and efficiently match consumer life with our merchants' business. This is the foundation of digitalization.

      Through the analysis of cases such as Bosideng, Joyoung, Nature Tang, Liangpinpuzi, Mengniu, Feihe, etc., we see that behind the performance growth of these brands, whether it is the connection between public and private domains, or online and offline Taobao, Pinduoduo, JD.com, DingTalk and other platforms, the data middle platform and Alibaba will be connected to serve the entire network and all channels, and realize the digitalization of the entire link.

      "Digital transformation is a process with a starting point but no end point, a process of continuous construction . These companies have done a very solid job. These leading companies are investing in the future. Our e-commerce companies must also think about the future." Xiao Lihua said in his sharing.

Industrial Internet has entered the 4.0 stage

      The essence of business is a marathon long-distance race without a finish line, not how fast the first three laps run. When doing business, your strategy must be good. None of your brand building, your product design, your development, production, manufacturing, logistics, supply chain system, your design, and your IT system can be lacking. Xiao Lihua proposed that some of these can be established by themselves, and some can be found with partners, and they will encounter different problems at different stages of development and need to continue to grow.

      The consumer Internet and industrial Internet are connected to the end, and the industrial Internet is also constantly upgrading. From the platform for release of 1.0 information, to the platform for transaction matching in 2.0 stage, to the combination of logistics and finance in 3.0 stage, it has entered the 4.0 stage of industrial Internet in the second half of 2020.

      The 4.0 stage is the part of sustainable development, which means that the technology and upgrade of blockchain will be further upgraded, including brand incubation, design and development of new products, flexible manufacturing, full network and all-channel layout, and talent optimization.

Why achieve digital-driven growth?

      The essence of business is another word: business, trading and supply and demand, but the biggest problem is that high inventory and high valuation coexist. After the epidemic, we have entered the post-epidemic era. Many companies have made a good arrangement to combine short-term response and medium- and long-term solutions, so it is very important in terms of growth. Digital and intelligent driving can allow you to match B&C more efficiently and accurately.

      Why grow? Xiao Lihua believes that fast development is not a problem; medium development begins with some problems; slow development is not a problem! Therefore, sustainable high-quality growth is the bottom line. If you don’t grow, everything is nonsense.

      In terms of growth, traditional stores consider more store efficiency and square footage efficiency. Xiao Lihua believes that the more important thing in the future is human efficiency and timeliness. We who do e-commerce must pay attention to your per capita output. If you don’t have per capita output, it will be a disaster.

      Our traditional offline stores mainly rely on phone calls, text messages, emails, official accounts, and WeChat groups. These methods used to work, but they may not be effective today. We must jump out and embrace a larger technology-driven business world.

Five-part songs on how enterprises carry out digital transformation and upgrading

      For us, the biggest enlightenment in 2020 is that all stores must be transformed and upgraded. You can be a live broadcast room, a experience store, or a forward warehouse, and your business must undergo earth-shaking changes, otherwise you are just selling goods.

      The employees trained and empowered are our best spokespersons. Xiao Lihua believes that in normal times, we must fully activate every individual. These employees who are trained and empowered are our introduction agents because they understand our brand best, our products best, and our customers best. Especially in an era when everything can be broadcast and everyone is an anchor, every clerk who is qualified and empowered in training can be an anchor. The best way is to use 90% of the idle time, use upgrade incentive methods, and improve human efficiency and timeliness!

      In addition, we need to continuously create new growth momentum and find a new growth curve. The traditional way of traditional brand channels is king is only the first PART. The most important thing for new generation brands is to build the subsequent parts. Behind new products, new customers, new stores, and new organizations, digital methods and means are needed. Without digital and intelligent development methods, it is almost impossible to surpass it. Now the post-90s and post-95s have created many brands, such as Li Ziqi, Hua Xizi, Perfect Diary, etc., which can achieve hundreds of millions or billions in a few years, and basically follow this path.

      During the sharing process, Xiao Lihua also shared a new growth code that drives digital intelligence: new growth = (new products * new organizations * new customers) digital intelligence. In this formula, we can see that it must be customer-centric, focusing on your consumer assets, and the organization behind your product strength, including the entire growth and digital intelligence behind it. Every section in this formula is worthy of careful consideration by merchants.

      The Alibaba commercial operating system released in January 2019 connects all sectors of our logistics, capital, organizational flow, technology, etc., not only Taobao and Tmall, but we start from all dimensions of our business, and all sectors of brand, commodity manufacturing, channel marketing, retail services, business flow, logistics organization, and technology have achieved tool support.

      In Alibaba Cloud Intelligent System, we have summarized the experience of digital transformation through the process of internal and external digital transformation empowerment, and continuously polished and refined it in many customer cases, and finally formed the "five-part" methodology of full-link digital transformation, which has achieved one-stop full-link digital transformation from five aspects: infrastructure cloudization, contact digitalization, business onlineization, operation dataization, and decision-making intelligence. For each sector, we actually have a series of tools, methods and means, and you can choose according to your needs.

      Companies with a scale of over 100 million must pay attention to Alibaba's five middle platforms, one cloud, multiple terminals, and N industries. At the same time, starting from online and offline, private domain and public domain channels, open up the marketing matrix of full contact points, and continuously tap into more customers in the 1 billion people.

      Not only that, the entire supply chain end-to-end entire industrial chain must also diagnose all links, breaking through various pain points, breaking points, bottlenecks and weaknesses, and collecting different types of data to achieve the precipitation of digital and intelligent assets in the entire industrial chain.

Digital upgrades, early layout and early benefits

      Alibaba wants to make it difficult for the world to do business, and business is a matter of B&C, trading, supply and demand. Digital transformation is to improve consumer experience and improve commercial operation efficiency and benefits. Therefore, in the full-link digital transformation and upgrading, all sectors must be centered on consumers, and fulfill their contracts online and offline, all networks, all channels and all regions.

      3 points rely on technology and 7 points rely on operation. You can’t wait any longer. Digital transformation has accelerated among leading enterprises. This is not cost or investment, but a question of whether you have the qualifications to compete in the future. You must open up the Ren and Du meridians to prepare for the transformation of the digital and intelligent economy era. Tools can only solve local problems, and systems can solve system problems. We emphasize tool empowerment, organizational empowerment, and operational empowerment, which is all-round.

      The essence of management is decision-making. The future world is not driven by experience, but by data-driven + computing power-driven + algorithm-driven. This is the biggest difference between future organizations.

      The best time to plant a tree is 10 years ago, followed by now, and the same is true for digital transformation. The curtain has just begun for our digital and intelligent economic era. The transformation of digital and intelligent will be launched in the morning and will benefit soon.

      Everything has cracks, and that is where the light shines in. Can you poke a big hole along this crack, create a world of new products, and create a new era. In the future, will you subvert the dark horse that subverts others or the one that is subverted? It is worth everyone's deep thought.

      In the next 5-10 years, all industries will be repeated, and a large number of very excellent and great companies will definitely be produced. We look forward to the emergence of you.