Keynote "Alibaba: an ecosystem built on Cloud"

Keynote "Alibaba: an ecosystem built on Cloud"

okay ladies in general we move on we move on and shift our attention we're going to jump into the world of Alibaba Alibaba an ecosystem built on cloud and the next gentlemen on stage right now he's going to share with you his insights and ideas exactly on that gentleman who's responsible for helping businesses and consumers across key European markets access the Alibaba ecosystem and brings a wealth a true a true wealth of experience in global omni-channel retail e-commerce and marketing experience to his role ladies and gentlemen please welcome to the stage general manager of Europe at the Alibaba Group mr. Terry Vaughn beep ah thanks so hello everyone I am very happy to be here and share some thoughts with you I'm just enjoying these lovely carpets here this is not something you see every day when you're giving a speech that you've got some nice oriental carpets so I want to share my thoughts with you about Alibaba try to explain a bit about what we do at Alibaba and also touch on our cloud business so you know first of all Alibaba is a very complicated company it's a company that a lot of people have heard of but don't necessarily understand what it is we do so I'm gonna try to give you a sense of what that is one of the things that people have heard of when it comes to Alibaba is our founder Jack Ma our IPO and something called singles they won't say we're coming back to here in a second I first don't need our slides to change so a brief request to the Technic team I'm seeing my slides here but I have not seen my slides there if we could please fix that otherwise I'm happy to speak without the slides but I think it will be more enjoyable for our audience with the slides there we go all right so here you see two of the things I mentioned Jack Ma and our IPO 25 billion is the largest IPO in history so far but in reality Alibaba is much much more we started as a b2b listings business focused on helping young people in China participate in cross modern border trade this is back in 1999 cross-border trade was something for multinationals was something was very difficult to do and we found that through technology something called back then the internet very new at the time here and you could imagine a provincial city in China what that was like in 1999 that people through the internet could participate in global trade which otherwise would have been close to them so our mission is to make it if we really got a problem with the slides transition here there we go our mission is to make it easy to do business anywhere and this is actually the one theme that connects all the different parts together that we do we have in the meantime we are no longer to be to be business we do be to be C to C B to C B to B to C the newest one C to B cloud services financial services Olli trip Ally support there's a lot of things here for a lot of different groups and stakeholders but the one theme that ties those together is our our mission to make it easy to do business anywhere now we're a big company in the mean time the numbers speak for themselves four hundred eighty five billion dollars in GM v GM V is not revenue GM v his gross merchandise volume this is what our partners the brands we work with the companies we work with what they are selling on our platforms when we cross that number it did make us the largest retail platform in the world we have over 10 million active sellers on the platform 443 million active buyers is a very vibrant as you could imagine ecosystem we deliver almost 57 million packages every day and a very specific part about us we don't deliver them because we are very much interested in working with a ecosystem with the network of partners we work with hundreds of different companies there are over 1.4 million people in China who are delivering these packages every day they're not employees of Alibaba because for us this would not be scalable we don't want to have 1.4 million employees we have you know a much much smaller number than that but we want to enable the quality of delivery from order from ordering to the actual delivery and for that we work with these many partners we work with technology but we don't try to control the entire ecosystem end to end we have about 1 billion product listings live at any single point in time so the new China landscape so much has changed in China I think it's very hard to describe if you haven't experienced that yourselves for me was something I've been learning a lot a bit in the last year and a half since I joined the company but China has gone through such a development in the last 20 to 30 years in terms of the consumers ability to buy products to have the disposable income to invest in products but then have the selection and choice and the access to products to buy for themselves for their family members and this is driven this huge growth that we have been very privileged to participate in there's a number of factors that are helping to drive this one of them is the developments of the internet developments of e-commerce but another one is China has the highest savings rate of any country in the world the average savings rate if you measure savings as a percentage of GDP is about 23 24 percent in China that number is twice as high forty eight point eight percent is the savings quote in China so when you think of the sheer scale of China hundreds of billions of people who now actually have disposable incomes to buy products with and they're saving at twice the rate as we do here in Europe that's generating this disposable income that wants to purchase quality goods for the family for the family members to get a sense of the scale of China if you see this number this is predicting 2020 GDP you can see China orange is the current situation four point two trillion India 1.3 Germany here one point eight and the predicted growth China is predicted to grow by another two point three trillion now if you look at compare that to the right with Germany Germany one point eight if Germany grows another half a trillion then Germany as a total will be about two point two trillion so the way to think about this to get a sense of the scale is that China is basically going to add another Germany on top and Germany is not a small economy so that is the size of scale the opportunity that we see in China next slide if we may there we go we go back one so one point to one point four billion people in China we all know China's very large but what's really interesting is the amount of people who are online 763 million online users of those six hundred and twenty million mobile mobile is big everywhere well bile is big here in Germany mobilized big in the US but it's it's on a scale in China that is quite quite different so if in the u.s. typical share of gmv of an e-commerce site might be about thirty percent coming through mobile devices in China this is about 67 to 70 percent on our site where we're a bit of ahead of the curve it's now up to over 80 percent of the business is done on a mobile device people don't buy through laptops and desktops they buy through their mobile device the internet for them is a mobile device but you see there's another six hundred million people there who are not currently participating in this consumer development in this consumer revolution and this is why we have one of our strategies one of our long-term global strategies at Alibaba is what we call rural Taobao we want to enable the 600 million Chinese who are not in access to this activity to be able to also purchase online so what we've turned as a goal so we want to open 100,000 village level centers very simple could be a single room with a single person but they have a strong internet connection and we've worked out a logistical solution where someone orders something from them in the village we will deliver we will ensure that it gets delivered to that one address we cannot deliver to the entire village but we can find a way to deliver that single address so this is actually quite a bit of organizational work it's quite a bit of operational work to make this happening it's very rudimentary compared to how all of us experience ecommerce every day but for these 600 million Chinese that we're trying to help access this is a revolution in terms of their ability to buy online and to sell online so farmers are able to take the goods they produce and sell them to other Chinese or around the world using the same system from the goal of a hundred thousand villages we're now up to about thirty thousand villages this is a long-term ongoing piece of work as I mentioned we've been very successful as the market leader in the in the b2c space in China so you can see here with market share of 56 percent why is this important because it gives us the ability to really take innovation take the ideas we want to do ways we want to help change how commerce is done and enable Chinese buyers and sellers to actively engage with buyers and sellers around the world this gives us the ability to fuel that growth as I mentioned the beginning we are a complicated company we have about 25 different business units seems me every time I go to China I was there last week I'm going to get in a few weeks every time I go we've launched yet another new business unit but to give you a sense of that you see on the left-hand side our digital median entertainment things like yoku yoku is the YouTube of China Alibaba music aisle eSports you see browsers the number one mobile browser in China as well as in India and elsewhere in Southeast Asia in the middle you have our core commerce businesses so things like team all Taobao was our c2c platform team all is what we work with quite a bit team all global this is things like taking the high quality German brand and been able in it to sell on our platform to Chinese consumers who want to spin the disposable income on that sort of quality made in Germany and on the right hand side you see local services and then at the bottom you see the Foundation's we have very strong foundations one is our financial services Ally pay is the largest mobile payment solution in the world we have over 450 million people actively using that to pay their bills be it the rent their electricity bills or the taxi or the movie theater or the coffee at Starbucks it is an omnipresent in China often now in some cities like our capital of our headquarters Hangzhou you don't really need a wallet you can pay for everything in your daily needs using your mobile phone we have all Imam our Big Data Platform chai now this is our logistical z' algorithm that i referred to before and right here at the bottom the foundation of the whole thing which is our ally cloud ally cloud is something that we built not because we said oh let's launch yet another ally let's launch another business unit it's a great business a growing business all of that's true that's not the reason we launched it's another reason that we got into the cloud business the reason we got into the cloud business is because we had a need as a business to be able to scale I'll give you an example afterwards where no one else could provide us with a scalable technology to operate ecommerce at the size and scale that we do so we went often built it ourselves after we did that we realized actually we have something very very powerful here that we would also like to share with other partners and enable others to use it and again this tied it back to our mission statement to make it easy to do business anywhere cloud solutions having an effective and powerful cloud solutions is one of the key ways we help others make it easy to them for themselves to do business so some key facts about early cloud established in 2009 as I mentioned they're out of our own need for something that large we are the number one public cloud in Greater China we are growing very well and very very quickly over 2.3 million customers of those 765,000 paying customers we have done a partnership here in Europe and Germany with Vodafone and working with them to help us bring our solution to customers here in Europe also working with customers directly where pioneer in big data and ie technologies Espada is a solution we have built which is a super computational engine building and investing in technology is something that we do again when we think about the long term Alibaba is a company that really does have a very strong business but part of that is we invest and where do we want to be 5 10 15 years from now and we invest in technologies that we want to enable our partners to use so something like super computational engine sounds very very sexy it's very expensive it's very resource intensive this is not something that our partners themselves would necessary to be able to do I'll be talking a little bit later about things like artificial reality virtual reality augmented reality these are things we build because we want to enable our partners to test them with their customers so we now have over 14 data centers for our cloud business around the world what are the ones we launch most recently is here in Germany in Frankfurt to enable us to have local cloud storage facilities and we have a large number of solutions you can see the list here this is a very very high-level list you know what I think about cloud solutions and cloud products and I am certainly not an expert in this area and I don't know how many people in the room are but when I speak to a lot of people it's very hard to imagine what is a cloud product if I was to ask you know a group of 10 people and at a cafe what is actually a cloud product most people would probably say that's storage right I can store things up in the cloud it's not on the server it's maybe cheaper it's more accessible but you know there are literally limitless types of cloud solutions and cloud products and cloud services you're just seeing a very very simple list here and every time that someone uses a cloud solution they're using that cloud solution for a very specific purpose if they decide to scale that up 10x you're going to have to change the solution you're gonna have to improve it if they decide to say go from using the cloud for storing financial data to storing marketing data we're going to have to sit down and improve that solution it is limitless and it's in its applications but it also means it really depends on what exactly are your goals and needs with cloud solutions and how can we help to architect a solution that fits your needs at that scale for that type of data I mentioned before the third thing that is famous for Alibaba one of the three things that people do not have Alibaba this is our so-called singles day sales promotion 11:11 every year it is the largest sales promotion the largest sales event in the world several times larger than Black Friday in the US and here in Europe this last 11th of November we did over 17 point eight billion dollars in gmv in 24 hours a large number of that bean for international brands selling to Chinese consumers and as you see up here on the top right one of the things I mentioned before 82% of that sales of those sales being done through mobile devices completely different scale of the mobile application we couldn't do this without our cloud solution we built a li cloud in order to enable us to be able to do exactly this sort of event at scale so at the peak times of this promotion we were doing over up to a hundred and seventy-five thousand transactions per second we were processing up to 120,000 orders per second there's no way we could have turned to someone else and say can you set that up for us we got a big sales promotion going on in a couple of months you know can you bring in the solutions and hardware for us to do that we have to build it ourselves we have to build it in a scale because every year these numbers are going up dramatically so for us it's a great it's a great privilege to be able to build these kind of solutions but then to offer them for our partners and our customers to also use I mentioned before virtual reality augmented reality some of the things we were doing here if you see on the top on the top left we have our virtual reality bi plus something you can actually try out here at the say but at our stand at the at the Vodafone pavilion this isn't about our thinking two or three years from now most people will be doing their purchases through virtuality I don't believe that's the case that's not why we do things like this why we do things like this or aquatint relative see here on the bottom right as part of our promotion for double 11 we enabled consumers to play a game on their cell phone it was basically chasing our logo and and earning points to do so but they did it in 30,000 physical stores so we enabled this to be done in 30,000 different stores spread across China and over 70 million people played this game leading up to our promotion so why is this important again it's not because shopping is going from being bricks and mortar to being ecommerce to be mobile commerce to now be an augmented reality to tomorrow being virtuality that's not the point the point is the consumers are very quickly becoming very sophisticated and they want to try these different things but for an individual brand to go off to China and build their own augment reality game would be very difficult would be unnecessarily expensive so what we do as a platform as we say let us build those for you and then you as a brand can try it out and see how does your consumer in China engage with virtual reality how does augmented reality help you connect better to your consumer in some cases it will be strong at some paces it will be irrelevant but we're enabling you to test that using our technology we are also doing things like live Fashion Show six million people view this fashion show where they were able then to see the product purchase the product comment about the product and social media again it is a reality that is blending between normal reality virtual reality and augmented reality Daesan Johanna show you a little video on our virtual reality watch anime so Digimon hey where did you come from cigarettes out yo now that you're here welcome to the big app I'm gonna go basis she wasn't hi and welcome to Macy's the largest department store took about miyajima tight see which one Mary goes on when you pour over Cory the median go cow Gabrielle to you back again now we could we could have a good debate on you know the actor activeness of that particular purse that was being purchased through virtuality but you know I'm not the target audience it's not a certain person I would buy but it's also not the point the point is being able to test this sort of thing enabling our partners to try it out and see how it works with their consumer this is what it's about because the consumer is more sophisticated the consumer here in Germany the consumer in China they are more sophisticated than we all can keep up with technology wise because we have to spend lots of effort lots of money to enable new technology the consumer doesn't the consumer doesn't spend any time thinking about this we have teams who spend months building exactly this sort of thing and that a consumer will try it out and he will form an opinion within seconds and at those seconds he is progressing so much faster than our own technology teams can keep up with so it's so important to be testing these ideas to figuring out how your brand wants to use this sort of technology and sometimes you will and sometimes you won't Internet of Things a big buzzword but it's something that's really really happening and when you think of all these smarts the smart home smart wearable smart education all these different things and also just what the Internet of Things and cloud computing enables you to do as a business and how it is going to change many business models simply by the sheer endless possibilities that is opening up it reminds me actually of a story a recent interview with our founder Jack Ma he was being questioned by a journalist at the g20 in Hangzhou and the journalist was saying Jack Alibaba you're an e-commerce company platform why are you doing all these other things why are you doing cloud and financial services and payment services and all these different things B to C C to C you know you guys should just be focusing on e-commerce right and at Jack looked at the journalist and said he says you know think back to the 19th century when electricity came and really changed so much of the world no one asked the guy using electricity to do light bulbs versus electricity to power a factory versus electricity to enable people to work or do other things at night which would not have been possible before no one said your electricity guy you should do only electricity why are you doing these other things because electricity enabled you to do anything we see it the same way what we are not an e-commerce company we are an e-commerce platform and many other things we don't see that as what defines us what we're trying to do is using something called the Internet to be able to innovate and do things that help us make progress against our mission to make it easy to do business anywhere and the internet and cloud services and things like the Internet of Things and smart homes and smart this this is a good example that there are literally endless possibilities of what a business and what a consumer can do using applications via the Internet that's how we see it that's what we see as our limitation which is almost nothing as opposed to being in a niche to say you should just be doing e-commerce one of the things we are doing with our cloud services is a service here in the in Hangzhou Hangzhou beautiful city about two and half hours from Shanghai where our founders came from where our company was founded where our companies headquartered to this day and we're doing a service there where we're using our cloud solutions and technology that we have built in order to try to improve the flow of traffic hangzhou like any other city today has big traffic problems growing growing growing more and more cars so we built a solution connecting the cameras with the cloud in order to be able instead of having it be done manually to improve the flow of traffic and see if there are no cars there there's no reason for the light to change seems very simple to us the technology to make it happen is much more difficult what we've been able to achieve here so far is an improvement of traffic flow of over 11% traffic is flowing 11% Apple for Apple measurement than it was before we introduced the system so it's just one of many examples of how we can use cloud solutions to make things easier or better we're very happy to be working with a lot of clients here in Europe with our cloud solutions a couple of examples with Schneider Electric we're helping them to do their own energy management systems using our cloud we work with Philips in many different ways also including in cloud solutions and you know as I mentioned our partnership with Vodafone we are doing many many different things but we see ourselves as being very much at the beginning the cloud business I was discussing this earlier today with the journalist the cloud business is so young the cloud business and industry is so much at the beginning of what it's going to be we've all been hearing about it for years so it feels quite normal but it's not cloud is very very new I said I was discussing before many people don't even really understand what is a cloud product what is a cloud solution so I see this as something we see this is something that it's very much the beginning of how it's going to develop and change much of how we do business and much of how we live so with that I would like to close you know I think it's very important as we think about how ecommerce is changing cloud business is changing how our world is changing specifically how consumers are changing and they're changing as I mentioned faster than we are able to do faster than we're able to keep up this is why innovation is so exciting we don't see innovation as a business opportunity we say innovation as a way to pursue our mission but we do it where we see there's the biggest gap we don't go into a business simply because we say we're very strong we have a great market share we can go in and take a good share of that business that's not how we think what we think is we're trying to make it easy to do business here's a gap here's something that's very difficult no one is addressing that let's go in and address it when we do it often leads to very good business we are business and not a charity but we're starting with the opportunity where is something difficult that we can make it easy let's go in and do that and if we succeed it will be a good business model if we don't we will then try another way to make it easy so I'll leave you with those thoughts thank you very much for your time and wishing you all a very interesting day here it's a bit thank you ladies and gentlemen Terry won't be brass thank you so much

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