Jack Ma says Alibaba will hit gross merchandise volume of $1tn by 2020
Jack Ma, Alibaba's executive chairman has made it very clear that Alibaba is not a company anymore but an economy.
Ma's target for Alibaba remains; to hit gross merchandise volume of $1tn in the fiscal year that ends March 31, 2020, as well as create 100 million jobs and serve 2 billion customers.
Jack Ma : "Alibaba to hit gross merchandise volume of $1tn in the fiscal year that ends March 31, 2020"
“Five years ago, when the Taobao and Tmall GMV just crossed $170bn GMV, which is RMB1 trillion, I had a crazy idea, I said,‘What if we could make $1tn by the 20-year anniversary of Alibaba, the year 2019—today we call it the 2020 fiscal year—we should meet the $1tn U.S. dollars?’” said Ma, "but I hate the exchange rate.”
The Chinese yuan, which was closer to six per dollar at that time is now perched closer to seven per dollar, “so we have a RMB1 trillion gap, which is not easy,” he added.
Long term value for Alibaba
Joe Tsai, Executive Vice Chairmans explained how Alibaba observes the latest trends in technology, product development and consumption to see how they might feed into the company’s operations.
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“The purpose is to build long-term value for Alibaba. Is this asset going to add to the overall value of the business? The only way to add value is to create synergies,” said Tsai.
Alibaba has positioned itself as an innovator and enabler of what it calls New Retail, the integration of online and offline commerce and the digitization of core retail operations. The company anticipates that internet technology and big-data analytics will spark nothing less than revolution that will rescue increasingly outmoded brick-and-mortar business models.
On company's AI plans Tsai added, “A lot of companies say they have an AI department. We don’t (say that) because AI lives in every part of our business,”
Tsai noted that AI “is only in the first inning of the game … We will be able to sprinkle lots of AI surprises into our core businesses to make our core businesses more valuable.”
On a shift from E-commerce to Entertainment
Yu Yongfu, the head of Alibaba’s Digital Media and Entertainment group, showed how the company is able to maximize the value of content by leveraging Alibaba’s vast ecosystem.
He pointed to “Once Upon a Time,” a fantasy drama licensed for viewing on Alibaba-owned video-streaming site Youku as an example. Alibaba Pictures has turned the show into a feature-length movie, slated for release next month, while Alibaba’s Tao Piao Piao is handling distribution and ticketing. And merchandise for the move is already being sold on Taobao and Tmall, totaling over RMB 300 million so far.
This merger of e-commerce and entertainment, where the value of content and intellectual property is maximized through advertising and consumer products, is of critical importance to Alibaba’s business model in this space, according to Yu.
“Today, content is very key, but ultimately, the winning strategy has to be beyond content,” he said.
Alibaba an e-commerce or a technology company?
Alibaba Group Chief Technology Officer Jeff Zhang said, “We are a technology company–we’re built on data. What all of our business units want to do with data comes down to us.”
“On Facebook, the ads are different for everyone but there are only 100,000 products. We have a billion so it requires a higher level of technology … that is much more sophisticated than on social media,” he added.
Without giving details, he claimed that the company is investing heavily in speech-recognition technology and this summer will unveil “a whole new series” of products based on a voice-controlled intelligent platform, products aimed at a variety of businesses and organizations such as the hospitality industry and education market.