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Ali CEO: What is Platform Economics?

By ESC Editorial Team, about 1 year ago Business
Ali CEO: What is Platform Economics?

On August 11th, after having taken the questions of the media, Alibaba Group’s CEO Zhang Yong talked about how the global influence of platform economics has increased and gave examples of platform companies like Amazon, Google, Facebook and Apple.


Alibaba, with a market value of 400 billion US dollars is also a typical platform company. “Indeed, no matter whether from the point of market value, influence or business boarders, Ali is now greatly involved in a lot of areas. This will have good effects, as well as frictions with the existing platforms. But in many cases, there were a lot of areas that have been needlessly complicated. After all, as the saying goes ‘the more friends the better’, Alibaba wishes more friends and partners in the platform economics too.”
 
There was a conflict between Alibaba and the Star Express company S.F. of which Zhang Yong said, “At that time, the conflict looked like a children’s fight, which confused the parents while the audience spread the gossip around ... I told Wang Wei (the founder of SF), that SF and Ali cannot be enemies, nor competitors, because Ali and SF are business partners. Untill now, most of the Taobao orders’ delivery services are provided by SF.”
 
Zhang Yong said, “What is a platform? A platform is not for there for companies to do what they want to do. We won’t call a free trade market as a platform. In the real platform, there are business rules, conduct standards, which are agreed and obeyed by all the parties involved using the platform. The platforms are known as open markets, I think that all the businesses ultimately lead to cooperation with mutual benefits, and there will be no open market existing with only one single party. I think it is hypocritical if there is only one side that gets the benefits in a partnership.”
 
Zhang Yong also talked about his understanding of the WeChat. The WeChat developers want to get into the retail market through a small programme. As a frequently used application by a huge number of people, Zhang Yong said, “it is relatively easy to get into the other areas from a user system and ecology, but the connection to all is a physical reaction. There is no chemical reaction happening as in the commerce, which can’t be developed from nothing.”

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