Hi Quartz members,
That Alibaba is shaking up the world of global e-commerce should not come as a surprise. The rapid rise of the Chinese conglomerate has been admired and analyzed for some time now.
But Alibaba is entering a new phase. Coinciding with founder Jack Ma stepping out of the CEO position and passing it to Daniel Zhang, the company is in the process of extending its reach from B2B and B2C commerce to find ways to explore, extract, and refine the new oil of the 21st century: data.
To do this, Alibaba is putting its money behind a broad range of seemingly disparate businesses. Whether it’s supermarkets, bike-sharing services, automatic car washes, facial-recognition technology, or smart-city management systems (to mention just a few), Alibaba wants to be right at the point of contact between customer and company, ready to harvest the data generated from almost any transaction to create the intelligence that will inform the next move businesses make.
Of course, Alibaba is not doing this alone. In its own country, it squares off repeatedly against Tencent, maker of ubiquitous messaging/payment/you name it app WeChat. Tencent is not as large as Alibaba, but it too is moving aggressively to position itself at the center of China’s growing economy. The two companies wage repeated proxy wars using their investment portfolios; there’s hardly a company Alibaba has backed that doesn’t have a Tencent-backed rival as well.
This is a fast-moving and high-stakes competition, with ramifications well beyond China’s borders. Each company is looking to expand abroad, whether in southeast Asia or in places where Chinese infrastructure projects (tied to the country’s belt and road initiative) have established a presence farther afield.
But it’s that same relationship with the Chinese government that may create obstacles. It’s clear that notions of privacy are thought of differently by Chinese authorities than in some other countries. How will other governments feel about a data powerhouse from a political system that has shown a willingness to treat corporate and individual data as its own? Will Alibaba be able to expand as quickly as it wants if there are objections?
We’re going to spend this week looking at all these issues and questions. China-based tech reporter Michael Standaert has put together a field guide that will get you right up to speed on Alibaba’s present and future. It starts today with his state of play memo, which is also neatly condensed into a shorter cheat sheet for quick and easy reference. Later this week, Michael will look into the merchant side of Alibaba’s vast business, take a visit to the company’s supermarket chain, look at the key executives at the company, and a lot more.
I hope you enjoy the week’s offerings.
Sam Grobart
membership editor
PS – Don’t forget to join us today at 10:30am for a special CES-themed conference call. Two of our reporters, Ashley Rodriguez and Dave Gershgorn, spent last week in Las Vegas at the tech industry’s annual trade show. We’ll talk trends, gadgets, and forecasts for a half an hour. Join us at this link (or, if you want to listen in on your phone, call 1 888 240 2560 and enter meeting code 722 994 440).