May 20, 2020

Alibaba beats singles’ day sales – here’s why

Alibaba Group
Airbnb
Singles Day China
Jimmy Huang
2 min
Alibaba beats singles’ day sales – here’s why

Alibaba Group has accrued an eye watering $17.8 billion in sales following China’s Singles’ Day shopping festival. This blows last year’s $14.3 billion out of the water and shows that ecommerce will remain on its upward trajectory.

Jimmy Huang, of Warwick Business School, is an Associate Professor of Information Systems and has researched digital ventures in China. He commented: "We have now entered the 'experience economy' and Alibaba may well be tapping into this with their Singles Day campaign. Users are consuming products or services for more than just utility purposes. For digital ventures it is now a question of understanding your users and being able to provide products, services and apps that fulfil their experience expectations.

"As one of China's digital entrepreneurs told us, in the experience economy 'there is nothing more powerful than emotionalising your users'. Is this exactly what Alibaba has managed to do with the Singles Day - 'emotionalising their users'?”

He also explained that large digital ventures are able to exploit their user base to innovate. With one of the largest user bases in China, Alibaba is not just strong in its Singles Day sales, but powerful in virtually every business it enters. 

He added: "This is the emerging trend of 'user base-centricity'. Compared with our conventional emphasis on customers and customer base, there is a clear shift in focus towards users and user base. Even though not all users contribute to a firm's revenue, they are crucial sources for service innovation, performance improvement and business extension. Even when estimating a digital firm's market capitalisation, such as Alibaba, every user counts.

"Alibaba and its Chinese digital cousins are growing in very different ways to their US and global counterparts. There is a growing trend in China to fully maximise the revenue potential of digital ventures' user base through business extension.

Many global digital firms, he explained grow their user bases and revenue streams through internalisation, he pointed out but Chinese digital firms tend to grow by extending their product or service range.

Huang said: “By doing so, the needs and usage frequencies are increased, which directly enhances the 'stickiness' of their users. How often do you use Airbnb’s app? In China you might struggle to live without Alibaba’s apps even for a day. When some of the users told us that 'they live in the apps of Alibaba', you can understand why."

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Jun 9, 2021

Q&A: Professor Loredana Padurean, Asia School of Business

DigitalTransformation
AsiaSchoolofBusiness
smartskills
Leadership
Kate Birch
3 min
Teaching the MIT Sloan Executive Education program at Asia School of Business, Prof. Padurean talks innovation, smart skills and digital transformation

As someone who is creating Asia Pacific’s business leaders of the future, what do you believe are the essential skills leaders require?

In many ways, we need leaders who are Renaissance women/men or polymaths, as opposed to specialists of an industry or a field. A polymath is a person with profound knowledge, proficiency and expertise in multiple fields and today’s leaders have to be able to combine various ideas, look at problems in novel and useful ways, and develop a broad and yet still deep set of skills, talents, and knowledge.

You’ve coined ‘smart’ and ‘sharp’ as skills of the future. What are these?

They are replacements for ‘soft’ and ‘hard’ skills, a concept coined by a US Army doctor in 1972 who observed that his pupils had different skills: dealing with machinery required ‘hard’ skills, while dealing with people and paper were ‘soft’ skills. This concept has served us well since, but I find it too binary, not to mention the semantic implications of the words themselves.

Soft implies gentle, delicate, mild, quiet, tender, weak. However, there is nothing soft in navigating competing perspectives and cultures, handling and delivering critical feedback or dealing with office politics. Instead, I prefer to call these skills ‘smart’. Hard implies rigid, difficult, heavy, static. But how can we think of engineering or software development as static or rigid? I believe ‘sharp’ is more apt as such skills need constant updating or sharpening. 

I think it’s time to reflect on these classifications, because we can drastically change someone’s perspective by how we choose to talk about and frame something. 

How important are smart skills in leadership today?

Smart skills are more important than ever because we live in a world of extreme diversity: generational, ethical, value-based, gender, etc. Gone are the days when giving an order was an effective act of leadership. I personally work with people from five different continents and across five different generations, therefore as leaders, we need to know how to adapt, motivate, inspire and connect. We need to increase our investment in learning about them in action, especially as smart skills are more difficult to develop.

I believe that a successful leader today has to be both smart and sharp. Take cognitive readiness, one of my top 10 smart skills. In order to be cognitive ready, one has to master system dynamics, one of my top 10 sharp skills. Also, did you know that one of the primary reasons why digital transformation fails is not the absence of digital literacy, a sharp skill, but the need for more validation and adaptability, both smart skills. So, instead of thinking of these skills as binary, I prefer to think of them as the yin and yang; co-existing and complementing each other. 

So, you can teach leaders smart skills then?

Yes, you can, via a combination of the classroom experience, plus an action component supported by deeply embedded reflection. At ASB we call this Action Learning, and we teach it both in the MBA and in the executive programs. For example, in teaching a leader emotional maturity as a smart skill, first they need to learn what it is, and then act on it, before reflecting on what we did and how we did it. And then to repeat it, but this time with more expertise and awareness. It’s not easy, but that’s why my favourite mantra is ‘the job is easy, the people are not’. 

Discover Professor Padurean's successful skills for a digital transformation here

 

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