Michael Evans on Innovative Ingredients for Alibaba’s Success
On June 22, Alibaba’s President Michael Evans will accept the 2020 Retail Innovator of the Year honor on behalf of the company. Below, he shares a few secrets to their success.
Alibaba is credited with connecting more than 700 million consumers with more than 200,000 brands and more than 10 million small businesses. That’s beyond impressive! What does the next decade have in store for you?
I am excited about our prospects over the next decade. If there is any debate or doubt about digitization in the past decade, the next 10 years will be a time for the world to adopt and execute the digital transformation. Against this backdrop, Alibaba will focus on implementing three core strategies to drive sustainable growth both in China and globally.
First, we will continue to expand our consumer base and diversify and grow product and services offerings to meet the needs of our consumers in all aspects of their daily lives.
Second, we will further enable our enterprise clients to serve their customers better, helping them adopt data technologies using Alibaba’s cloud computing and digital infrastructure. This will empower them to transform and digitize their entire operations including sales, transactions, logistics, product innovation, supply chain management and digital marketing to become true Internet companies in their own right.
Third, globalization, where I spend most of my time. There are two key pillars underpinning our globalization strategy:
- The first pillar leverages China’s massive consumer demand and diversified, flexible, robust and scalable manufacturing capabilities. Specifically, we connect brands, retailers and small businesses from around the world to the more than 700 million consumers on our platform. At the same time, we also enable Chinese manufacturers, small businesses and emerging brands to sell their products globally.
- The second pillar centers on building local businesses in key international markets where we engage continuously with local merchants and consumers across a vast array of products and services. Working closely with local partners to build and grow these businesses, our philosophy has been to share our capabilities, experience and technology to enable young entrepreneurs to build the next Alibaba(s) in their markets.
These three strategies will be the fundamental driving forces that help us realize our long-term goals of serving two billion consumers globally, creating 100 million jobs, and providing the necessary infrastructure to support 10 million small businesses to become profitable on our platforms.
With everyone looking to improve the way they sell, what are the most common questions you get from brand owners?
The most common questions we get are: how can I build a brand that stands out in China? How can I improve my brand’s direct connection to the Chinese consumer? And how can I sustain brand margin in the competitive China market?
The key to these questions is the use of digital technologies to drive brand building and customer acquisition, product innovation and a digitized, cost-efficient organization.
Brands today leverage consumer insights generated in Alibaba’s ecosystem to target consumer prospects, convert them to customers with our digital marketing capabilities and continue to drive loyalty and engagement with innovative technologies offered on our platform including livestreaming, use of key opinion leaders (“KOLs”), integration of short-form videos, and cross-brand collaborations and limited editions.
We are increasingly moving up the retail value chain and work closely with our brand partners to tailor product innovation for Chinese consumers by leveraging data insights generated across online and offline (including e-Commerce, local services, digital payments, and more). Together, we can reduce the time it takes to bring new products to market from the traditional 12-18 months to six months. We also enable our brand partners by digitizing their organizations. With various products and services offered on our cloud platform, we help brands establish digital communication and collaboration systems across their organizations as well their subsidiaries and suppliers to improve transparency and efficiency. We also empower brands’ store associates to manage their customers better and solve channel conflicts by motivating these sales associates to serve not only in-store customers, but also online buyers through digital payments and New Retail technologies.
Convenience and speed – two attributes that today’s consumers want more than ever. Can those needs be sustained?
We have no choice but to sustain and even enhance convenience and speed. In fact, the questions we ask ourselves every day are these: what will retail look like in the future; how can we help businesses go beyond online? How can we meet the increasing demand from our users for consumption upgrade and higher quality lifestyles in addition to convenience and speed of delivery?
To meet and sustain these needs, over the past few years, we have had an intense focus on what we call New Retail – the digitization of the retail value chain for a merchant’s online and offline stores, supply chain, operations, inventory, and logistics, to significantly enhance merchant operation efficiency and to provide consumers with a seamless shopping experience, anytime and anywhere, online and offline.
We have also invested heavily in local services platforms to offer consumers convenient on-demand services for food delivery, maps, movie tickets, travel and in-store dining as well as strengthening relationships with our merchants by improving their profitability and access to a rapidly expanding and broader customer base.
Finally, we added digital media and entertainment businesses to provide our users with original TV shows, movies, music and sports programs.
All of these businesses are powered by our enabling infrastructure including digital payments, logistics, cloud computing, and AI technologies. Taken together, we have created an Alibaba Economy designed to adapt and serve the ever-changing needs of our consumers and merchants.
Alibaba has made great strides in sustainability. What is your next environmental focus point?
Sustainability is core to our mission and embedded in our strategy and operations. It is not something we do as a side project or for philanthropy. Our entire business model is built on solving large-scale societal challenges, including: providing economic opportunity to less developed regions of China or other countries; providing financial services to the underserved; and solving problems for our brands and SMEs so they can succeed. Because of our scale, we have a responsibility to address environmental and social challenges and we have the ability to make a significant impact by bringing our entire ecosystem to bear. Below are a few examples:
- Our cloud business works with cities to help them better predict traffic flows and optimize traffic management systems to reduce congestion, thereby significantly reducing greenhouse gas emissions and air pollution.
- Our payment affiliate Ant Financial launched a powerful program in 2016 called “Ant Forest” which recently won the UN Champions of the Earth Award.
- Our logistics arm Cainiao has pioneered the use of algorithms to minimize packaging by optimizing both package size and material use. We apply AI algorithms to ensure delivery drivers are using the most efficient routes, replacing paper labels with e-shipping labels, working with businesses to use reusable delivery boxes, and optimizing delivery orders to ship more items per box.
- We are working actively to make re-commerce not only acceptable, but also desirable.Our re-commerce app, “Idle Fish,” is China’s largest secondhand marketplace. We’ve seen more than 30,000 tons of clothes, 9.4 million books, 1.2 million phones and more than 500,000 large home appliances recycled through the Idle Fish app in 2018.
Sustainability is a top priority for Alibaba, our customers, and for our brand partners today and for the foreseeable future. Stay tuned for more innovations from Alibaba on this front.
What’s your favorite article of clothing?
I don’t consider myself a fashion person, but I do love my pair of Levi's 501 jeans that were given to me at the 1984 Olympics. Levi’s designed custom 501 jeans with gold studs for every gold medalist in the 1984 Olympic Games. I still have mine and, believe it or not, they still fit! Alibaba is a TOP Olympics Partner so I will be in Tokyo for the 2020 Olympic Games and plan to wear them proudly.
Thank you, Michael, for these incredibly insightful answers!
To celebrate Fashion’s Future with us on June 22 — and honor Kenneth Cole, Ralph Lauren Corporation, Brandon Maxwell, Bravo/Project Runway, and Alibaba Group — secure your ticket or table! Follow along on Instagram and Twitter with #AmericanImageAwards.