New retail was put forward by Jack Ma in 2016, which enables a seamless engagement between the online and offline world through data technology. The emerging strategy is expected to connect the online presence, offline retail experience and logistics service, and has been the most important focus of Alibaba during recent years. (Read more about Alibaba's New Retail initiatives) We collected two speeches from the CEO of Alibaba Group and Chairman of Alibaba Academic Committee, in which they have explained the new retail concept from different perspectives.
Zhang Yong, the CEO of Alibaba Group, attended the 2017 Global Netrepreneur Conference, and raised a profound question in his speech: how the netrepreneurs should embrace the new technologies, new infrastructure, and forge ahead into the future of New Retail. The answer was to go back to the nature of business, he said. In essence, business was all about People, Goods and Places. In the right place and at the right time, customers find the commodity that interests them, which is how every business ought to operate. New Retail is the renewal of this concept, together with big data, upgraded technologies and innovative financial tools.
Zhang Yong thought that although the online and offline integration and the sharing economy were experiencing rapid and significant changes, one thing would stay constant in these tumultuous times: social division of labour and cooperation. He pointed out that: “all the netrepreneurs start from just a small aspect in the value chain for customers, but when at one point they do extraordinarily well, they will definitely win. Because even if you can only do one thing in the value chain, no matter whether it is in manufacturing, design, customisation, sales or services, you can develop further through the strong power generated from the efficient division of labour and cooperation. ”
Zeng Ming, Chairman of Academic Committee of Alibaba Group as well as the Dean of Education at Hupan University also talked about new retail in his impressive speech at the 2017 Computing Conference.
“New Retail is one of the five topics that Jack Ma raised to meet the new economy, which also includes new retail, new manufacture, new finance, new energy source and new technology. New retail is just a small part in the business chain, so we have to analyse it from a perspective involving manufacture, financing and supply chain, or it will be hard for us to understand the latest changes in the industry.
The essence of new retail is new technology: data and algorithms are playing an increasingly important role in today’s production. They are the driving force of advanced productivity that differs from the traditional one such as steel or electricity at industrial times. The future of New Retail depends on the most up-to-date technologies, such as data, algorithms and artificial intelligence.
Though people are engaging in heated debates about the integration of online and offline, it would be more important to discuss concepts on which this should be based and what ways we should adopt to realise the integration. Innovation is never an easy thing; to subvert traditions is a big challenge. But luckily, there are huge opportunities for China where the middle class is expanding, the economic development is soaring and the process of upgrading consumption is under way, all of which will generate more space and potential for the development of the new retail industry.
If we have figured out the premises, it will be much easier to understand New Retail, which, in short, is the recombination of the traditional, vertical, closed supply chain in the traditional industrial age and leads to a completely new network of social cooperation.
What if we consider this issue a little bit further, like what will happen in the commercial world in the future? Thanks to 20 years of hard work exploring the internet and commercial industry, we have now got a clearer picture of the coming business transformation. All business will become more intelligent in the future and we will be welcoming an era of smart business.
Just by looking at several of the world’s most valuable companies such as Google, Amazon, eBay, LinkedIn, Twitter, Facebook, you will find that they are all smart business enterprises. It is obvious that everything is being rapidly more intelligent with the advance of internet, cloud computing and big data. And this change is based on two very core mechanisms: one is network integration which refers to a more open reconstructed network, the other is intelligent data which is helping us to make more accurate data-driven decisions.
An example of that: when our customers log into Taobao every day, they will be presented with a daily-updated personalised recommendation. It is impossible to complete this work manually and it all depends on the powerful intelligent machine and search engine.
In a nutshell, enterprises in the future will be relying on smart business; network integration and intelligent data will be the two most important features of the new commercial civilisation.”
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