2020-08-16 DannyData小丹尼 | 艾丹尼旗舰店

Speaking of Alibaba, what is your first reaction? If you want to know someone from Ant Financial Services Group which is going public soon to pay off my Ant Credit Pay, please type 1. If you want Jack Ma “who is not interested in money” to empty my shopping cart, please type 2. 

Alibaba’s past success is analyzed by many people now, while I am more concerned about whether it can continue to be successful in the future, that is, can the middle and right half part of its business map and AliCloud also become Internet giants like Ant Financial Services Group?

In this episode, I will answer the question in three aspects: Apart from Taobao and Alipay, what is Alibaba’s next battlefield?

I’m Danny, I talk about tech and cars. As usual, all information used in my video is authentic and first-hand. You're welcome to disagree with my arguments, but don't doubt my sources.

First, I would like to correct a misunderstanding. It is often said: “Alibaba always says in a high profile that it wants to be a 102-year-old company, but it has only been founded for 20 years, only 1/5 of the road, so why did Jack Ma retire? Did he leave Alibaba behind? " 

当然不是,马云和阿里仍然有着紧密联系。大家要知道,马云可是“老退休人”了,2006 年,他将阿里巴巴公司总裁职位让给卫哲。2013 年,他辞任阿里巴巴集团 CEO交给陆兆禧, 2019 年 9 月将集团董事局主席交付给张勇。虽说马云总说自己退休,但马云仍然是阿里的最高权力中心合伙人制度中的“永久合伙人”,阿里的“合伙人制度”和前段时间从阿里合伙人除名的最年轻前任合伙人蒋凡,非常值得单讲一集,这个等我以后再详细聊吧,你们感兴趣吗?
Of course not. Jack Ma still has close ties with Alibaba. You should know that Jack Ma is a “veteran retiree”. In 2006, he gave up the position of president of Alibaba to Wei Zhe. In 2013, he resigned as the CEO and handed it to Lu Zhaoxi, and in September 2019, he handed over the chairman of the board of directors to Zhang Yong. Although Jack Ma always says that he is retired, he is a “permanent partner” in Alibaba’s  co-partnership system of the supreme power center. This “co-partnership system”, as well as Jiang Fan, the youngest former partner who was removed from Alibaba’s partners some time ago, is very worthy of a single episode. I’ll talk about this in detail later. Does it appeal to you? 

Back to our theme: what is Alibaba’s next battlefield? 

01 都给爷数字化

The first point: digitizing all.

Although Jack Ma, who is a little arrogant, said Alibaba has no rival, I just want to find some direct opponents for Alibaba. The first one: Wang Xing’s Meituan. 

You may wonder, "Well, Danny, I often hear from others that Alibaba’s biggest rival is Pinduoduo or Tencent? Why do you think it is Meituan?"

This is also related to Alibaba’s future growth points and business layout. The two biggest competitors of Alibaba’s domestic e-commerce business are indeed Pinduoduo and Tencent, but that of the Local Life business is Meituan. This is also the reason for Wang Xing frequently challenging Alibaba on Fanfou.com. 

Alibaba’s future growth point is my focus in this video. We all know that its past success was due to “e-commerce”, but the more important business for its future is “Local Life”, and the logic behind is that Alibaba is “digitizing” all the traditional industries. This is also an essential reason why Alibaba repeatedly emphasizes digital technology on various occasions. 

To help you understand Alibaba more deeply, here I would like to introduce a “Danny Defense and Enclosure Model”, of which the horizontal axis represents whether it is a “guard and defense” or a “happy valley enclosure” business. To put it bluntly, it is to defend the stock market or to develop the incremental market. The vertical axis represents “easy to monopoly” or “difficult to monopoly”. As for the in-depth analysis of monopoly, I have already talked about it in detail in the last episode of DannyData about Tencent, and you can watch it if you are interested.

I’ll use Alibaba’s business as an example and you’ll understand this model.

Alibaba’s e-commerce business, Taobao and Tmall, belongs to “guard and defense + easy to monopoly”. It is easy to understand “guard and defense”. Of Alibaba’s 780 million Chinese consumers every year, 726 million are from Taobao and Tmall, accounting for 93%. You can see from DannyData that the number of annual active users is still growing steadily. 


It is also easy to understand “easy to monopoly”. You have seen that in recent years, almost all kinds of vertical e-commerce have been gathered or eliminated, and those who have survived are gradually subservient to giants, such as the NetEase Koala acquired by Alibaba. The only ones that can threaten Alibaba’s e-commerce are Pinduoduo and JD.com. 

Let’s go on to talk about the upper-right corner of “happy valley enclosure + easy to monopoly”. For Alibaba, the core business is “Local Life”, which consists of three parts. The first part is catering takeout, such as Eleme; the second part is new retail, such as Freshippo; the third part is service to home, such as Hellobike. Few companies can really compete against Alibaba’s “Local Life” business, only Meituan and the giant Tencent are decent and qualified.

In fact, it is difficult to monopolize the traditional catering and retail business itself, but if combined with the “digitization” that Alibaba has always emphasized, it will become easy to monopolize from a lower logic point of view. It is like the early mobile phone, which seemed to be a difficult market to monopolize, but through the lower level of iOS and Android operating systems, the entire mobile phone ecosystem has gradually become a market that is easy to monopolize.

The lower-right corner of the model, “happy valley enclosure + difficult to monopoly", mainly refers to autopilot, VR, AR and other new technologies, which is also the future business that is being laid out by Alibaba’s DAMO Academy, T-Head, and the most recent Ant Blockchain. I will talk in detail later in the third point. 

With the maturity of some new technologies, there may be a gradual transition from the lower-right corner of the model to the lower-left corner, namely, “guard and defense + difficult to monopoly”, such as Alibaba’s cloud computing. It is difficult to monopolize because of some unspeakable security reasons, so you can see that the “Danny Defense and Enclosure Model” is also dynamic.

Now you should understand why the biggest opponent of Alibaba’s “next battlefield” is Meituan, right? One of the mistakes often made by large companies is to deal with the attacks of new adversaries in their traditional ways, ignoring the layout of the future battlefield. The new opponent Alibaba needs to deal with is Pinduoduo, while the opponent for its future battlefield layout is Meituan. Alibaba’s executives certainly know this truth, because eBay, Oracle China, Amazon China, etc. were defeated by Alibaba in this way. Thus, it certainly does not want to make the same mistake as its opponents did. 

这里说到了阿里、拼多多和美团的关系,还有一个数据可以证明我的观点。阿里的电商有一项核心指标monetization rate,即货币化率,这个指标最早在阿里的招股书中就出现了。
Here we talk about the relationship between Alibaba, Pinduoduo, and Meituan, and there is another piece of data that can prove my point. There exists a core indicator, monetization rate, in Alibaba’s e-commerce, which first appeared in Alibaba’s prospectus.

The calculating formula is:

Monetization rate of e-commerce = platform revenue / platform GMV

By the way, I would like to explain the difference between platform revenue and platform GMV. Platform GMV, namely “Platform Gross Merchandise Volume”. All the money you spend on Taobao contributes to the platform GMV, part of which is earned by Alibaba, called platform revenue, including customer management revenue, other retail revenue, and commission revenue as you can see from DannyData.

With the rise of Alibaba’s new retail business in recent years, this formula has changed slightly:

Platform GMV = Overall GMV - New Retail Revenue

The monetization rate is a very important indicator. The magnitude of its change represents the cost of Alibaba’s resistance to Pinduoduo. Although both are engaged in “10-billion-subsidies”, 10 billion yuan is nothing to Alibaba’s e-commerce business. As a matter of fact, Alibaba’s monetization rate has had no obvious changes in recent quarters, indicating that the cost of its resistance to Pinduoduo is not as big as imagined. Instead, it pays more in the contest in terms of Local Life with Meituan. 

For example, you can see from DannyData that Alibaba had a very rare negative free cash flow in the first quarter of 2020, and the cash flow generated by operating activities also dropped significantly. Seemingly, it was because of the impact of the epidemic as everyone knows, but on the other hand, it was also due to the expansion of Alibaba’s new retail business, which is an important battleground to compete with Meituan and involves a big consumption of inventory and assets.


According to Alibaba’s 2020 financial report, 70% of the newly added annual active consumers came from less developed areas. Many of them first touched Alipay through Local Life before gradually using other services of Alibaba, such as Taobao, Tmall, Eleme, and so on. As Zhang Yong said in the earning conference: 

“Together with Alipay, we will first digitize them and further turn them into consumers, which is the integration strategy of Alibaba’s digital economy.” 

At the end of 2019, for another example, 48% of Eleme’s new consumers came from Alipay APP.

Now that it comes to the relationship between Alibaba and Meituan, we have to know that Alibaba in fact once invested in Meituan in the Series B Round, but later the two sides fell out, with a very complicated reason. Generally speaking, Alibaba wanted to recruit a general, but becoming a general of Alibaba certainly could not meet Wang Xing’s ambition and ability. If you want to know how extraordinary his deep thinking is, please watch Episode 2 of DannyData.

In fact, Alibaba’s Local Life and Ant Financial Services Group which will go public soon are inextricably linked. You can see from the financial report that Alibaba holds 33% of Ant Financial Services Group’s shares, and the second and third largest shareholders are all related to Jack Ma. 

Moreover, the new chairman of Alibaba’s “Local Life” taking office at the beginning of this year is the CEO of Ant Financial Services Group, Hu Xiaoming, whose stage name is Sun Quan. He had debated with Laojiang before. This is also easy to understand because there is a natural super-strong relationship between Local Life and Alipay. I’ll go into details later when I talk about Ant Financial Services Group. Are you interested? Please type “interested” if you are. 

I have a good news to share with you all. DannyData data visualization applet and website are now online! You can choose to become a paid subscriber and experience multi-company comparison, advanced charts and exclusive community services at a price of less than one yuan a day. Compared with the data visualization tools on the market that charge you a lot, we set our price offer in good conscience. Simply search “dannydata” in the applet or enter dannydata.com online to experience it now.


02 全球化甭想躲

The second point: there is no way to hide from globalization. 

Alibaba’s insistence on globalization is no longer news, which you can better understand after taking a look at the core strategic objective in Alibaba’s financial report. Alibaba has achieved the 2020 goal set by Alibaba five years ago: more than $1 trillion in total transactions.

After that, the primary goal in 2024 is to “advance our globalization strategy,” and that in 2036 is“serve 2 billion consumers worldwide.” 

We can see from the financial report that it is still more than 1 billion shorts of the goal of 2 billion consumers around the world. 

These two primary goals are both about Alibaba’s globalization, so we can see how vital its globalization is to the next battlefield. 

Indeed, there is no need to say much about globalization’s benefits, especially this kind of constant emphasis like Jack Ma: 

Jack Ma: This era is shifting from IT to DT.

DT, Data Times, means that the marginal cost of data storage and replication is almost zero, which means that there is a multiplication effect in data exchange. The more people use it, the higher the value will be. 

Here, I would like to make a prediction. After sanctioning Huawei, ByteDance, and other Chinese Internet giants, other countries will also sanction Alibaba, with a focus on Alipay and AliCloud. You can see whether I am a prophet or a perpetual motion machine of being proven wrong.

We have to admit that compared with Silicon Valley, Chinese technology companies still have a significant gap in globalization. The earliest obstacle is the differences between languages and cultures. For example, as a world language, English does have its advantages for globalization. However, with the advent of digitization, this linguistic and cultural gap will gradually narrow, as Alibaba said in the financial report: 

“The world is moving towards digital-first, with digital coverage in an all-round way.”

你可以简单理解为,全球化的前提不再是语言和文化,而是我在第一点所说的数字化变成全球化的前提,正如Scott在《the four》一书中所说:
You can simply interpret that the premise of globalization is no longer language and culture, but digitalization as I mentioned in the first point, as Scott said in his book The Four: 

“Global coverage does not mean conquering the world, but making corporate services digital enough, not being affected by local cultures.”

Therefore, the super companies like Huawei and ByteDance that have a lot of influence abroad are gradually emerging. Let’s go into details later when I talk about ByteDance. Are you interested in that? 

In my opinion, Alibaba’s biggest competitor to globalization is Amazon, and it has adopted a globalization strategy of “surrounding the cities from the countryside.“ For instance, it is starting from Southeast Asia and gradually spreading to global users through localized operating services. 

There, without a doubt, will be all kinds of setbacks in this process. For example, India is a big holdback in Southeast Asia, for it banned China’s 59 Apps at the end of June, you know.

In addition to the well-known e-commerce, Alibaba and Amazon will actually focus on chips, cloud computing, blockchain, and other earlier technologies on the battlefield of globalization in the future.

03 引领下一跳跃

That’s the third point I’m going to make: leading the next leap. 

If Alibaba wants to go global, it must lead the next leap, not just being a follower of technology like Chinese technology companies over the past few decades.

What does this mean?

Although our country’s technology is developing rapidly, and we are very proud as Chinese, we must admit that we did not lead the vast majority of technological leaps. We waited until the technological development slowed down, and gradually caught up with the world-class pace through the application of the large-scale market, which created two major problems: 

The first biggest problem: we often could not get the first wave of technology dividends, and were easily dominated by others. The mobile phone that everyone is familiar with is a typical example. After the emergence of the iPhone, Chinese mobile phone brands were everywhere, such as BIRD, SUBOR, NIECHE and so on, all these are now disappeared from the scene.

The second biggest problem: the throat of fate is holding Chinese companies. For instance, although Huawei, MIUI, OV, etc. in the mobile phone market are developing very well, they are still banned optionally by Android abroad, and there is indeed a severe impact on foreign sales. 

Thus, if Alibaba wants to do an excellent job of globalization, it must lead the next leap in technology, which is why there’s a lot of business losing money, and not stopping investing heavily. 

What’s more, you can see from DannyData that Alibaba’s revenue is just supported by “e-commerce core business”: 


If Alibaba wants to lead, it will undoubtedly be beaten by the leader. That’s why I predicted that the next one to be sanctioned by the United States would be Alibaba, typically those following leap technologies, such as cloud computing, chips, blockchain, and so on. Alibaba has already done well in many aspects. For example, AliCloud is already the third-largest cloud computing service provider in the world after Amazon and Microsoft. Ant Financial Services Group also has 1.3 billion global annual active users and strategic partners in nine countries. Still, Alibaba must not treat it lightly, because future adversity must be a regular program as well as a test of Alibaba’s adversity quotient.

Since Alibaba is likely to be sanctioned when leading the next leap, how can it break through that? 

Here is an idea——Systematic Operation. The Mongolian cavalry swept across Eurasia at that time, and Germany swept across Europe during World War II.  To be honest, they were not the best in individual combat; for example, Germany only had more advanced equipment in 1943-1944, but before 1942, German tank equipment was papered in front of the Soviet Union, so why did they win? Because they relied on the systematic operation, such as the well-known blitzkrieg. 

Therefore, if Alibaba wants to lead the next technological leap in the future, it must not fight alone, but rely on the strength of the system. 

For example, Alibaba’s Zhang Yong said in the teleconferencing: 

"In Alibaba, we put Cloud and Intelligence together. We don’t call this just a cloud service, but a cloud + intelligent service, which is our characteristic." 

Of course, it also includes the Alipay + Local Life I mentioned earlier, as well as Ant Financial Services Group’s recently major movement - Ant Chain. Although I am not familiar with blockchain technology, I know that it is more than just throwing coins, and I can invite a big fish in the field of blockchain to come to the DannyPal program to tell you about it in the future. Does it appeal to you?

04 我的价值观

Today, I have finished talking about three points of Alibaba’s future battlefield:  digitizing all, there is no way to hide from globalization,  and leading the next leap, and then it comes to what I most want to talk to you about: my values. 

I am sure that everyone has seen Jack Ma’s speeches, and what is the most impressive sentence to you that he said? For me, it is: 

Sorry to be careless, but it’s actually this one: 

Jack Ma: “where is the opportunity? It is in the complaint. ”

In other words, what successful people have in common is that they are all optimistic. It also reminds me of a sentence: “optimists tend to succeed, while pessimists tend to be right.” To put it bluntly, if you want to find a reason you can’t make it, you can find thousands of correct answers, but the real winners are optimistic enough to face the challenge. 

We all know that the COVID-19 epidemic has brought us high losses, so there is no need to say more about this. I feel like focusing on how we treat this epidemic with an optimistic attitude. Optimism, certainly, does not require you to force a smile or giggle,, but to think more about what we can gain, such as the rapid development of online education and the reduction of tedious and lengthy offline communication meetings. 

As the CEO Hu Xiaoming of Ant Financial Services Group summed up:


“The epidemic is the best opportunity given to us by history, and also to China’s digital economy, because efficiency will be improved. China’s overall social efficiency will increase by 3% to 5% as a result of the epidemic. Therefore, we have to seize this huge opportunity for the transformation of the global digital economy."

This paragraph basically sums up the three points I have said before. 

Liu Cixin, the author of The Three-Body Problem , recently said in an interview: “the COVID-19 epidemic reminds us to avoid lineal thinking about the future.”

So, my biggest personal gain is to understand better that the world is non-linear, and our future is likely to live in a pond of raising black swans. 

In addition to sudden changes in the external environment, such as the epidemic, the “Black Swan” incidents may also be caused by human society, such as a major breakthrough in science and technology. We have already seen that artificial intelligence AlphaGo has surpassed the top human player Ke Jie in playing go. There will certainly be a more awesome Beta cat, Omega chimpanzee, and so on that surpass humans to do more in the future. 

As Bill Gates said: 

“We always overestimate what can be done in one or two years and underestimate that in five or ten years.”

Therefore, in the face of the non-linear changes in the world, it is all the more necessary for us to rearrange and recombine all kinds of possibilities, for example, science fiction provides us with a productive way of thinking and helps us to be more fully prepared. After all, the challenges that humanity needs to deal with in the future will certainly be more complicated than the COVID-19 epidemic. 

So what is the most difficult challenge for humanity to deal with in the future? I agree with what Lu Xun said: 

“The most difficult challenge for human beings to predict and deal with is not the impact of external nature, but the complexity of human nature.”

Well, I admit that Lu Xun did not say this, but I said. Human nature is the most elusive and tricky challenge to deal with. Just take a look at the various anti-human-common-sense operations of “Mr. Know-all,” and you will understand it. 

Finally, I will end with a clip from my favorite movie: Les Miserables: 

我是小丹尼,谈车说科技。如果你认为本集视频对你有帮助,别忘了帮我点赞关注,是我做好下集视频的最大动力。下集DannyData视频我会讲宁德时代,你想听我讲点什么呢?请给我留言。Techs Never Die,回见。
I’m Danny, talking about cars and technology. If you think this video will help you, please don’t forget to give me a like and follow me, which is the biggest motivation to do an excellent job in the next video. In the next episode of DannyData video, I will talk about CATL. What do you want to hear from me? Please leave me a message. 

Techs Never Die, see you next time.