Ding Talk, Alibaba’s messaging app, aims to change business

About 15 years ago, Alibaba Group’s founders led by Jack Ma laid out a simple mission to guide what was then just a small e-commerce startup launched in Ma’s apartment in Hangzhou, China. Alibaba, the founders decided, would always strive “to make it easy to do business anywhere.”

Today, Alibaba Group is a global internet conglomerate—and it’s not always easy to see that “easy to do business” principle at work in the company’s diverse subsidiaries and disparate investments in sectors such as entertainment, sports and artificial intelligence. But one initiative hews closely to the “make it easy to do business” mantra: Ding Talk, a fledgling app that Alibaba says currently is the No.1 enterprise messaging app in China.

Unveiled in January 2015, Ding Talk today serves more than 2.4 million Chinese businesses and organizations in sectors such as e-commerce, manufacturing, education and finance, providing them with a growing slate of business-centric functions including group and personal chat, conference calling, e-mail, and cloud-based storage. The latest version, Ding Talk 3.0 released this week, adds features aimed at improving business-to-business communications and collaboration.

While 2.4 million businesses (Ding Talk does not disclose total individual users) may not seem like a large number in a country where the leading chat app, WeChat, has some 800 million users, China’s enterprise messaging market is in its infancy. Roughly 200,000 new businesses are adopting Ding Talk each month and evidence from other markets suggests there is plenty of room for growth. In the U.S., for example, workplace communications app Slack grew so quickly it became the fastest-growing business app ever, the company claims.

In a way, Ding Talk owes its existence to the popularity of WeChat. To boost its social-networking presence, Alibaba in late 2013 decided to launch a competing chat app called Laiwang. To set its app apart, the Laiwang team looked into adding features that were useful not so much in the social sphere as in the workplace—an area in which Alibaba boasted some expertise, having for many years provided an internal instant-messaging service called WangWang that has been used by millions of buyers and sellers on its e-commerce marketplaces.

Laiwang never gained critical mass. But based on initial Laiwang research into enterprise apps, Alibaba saw a market for a purpose-built communications tool for people’s work lives. In May 2014, a group of 20 people, including product managers and engineers, began work on Ding Talk in Jack Ma’s old apartment at Hupan Garden, which is still in use as an incubator for key Alibaba development projects.

Team members needed to fight for elbow room in the 150-square-meter space. Some worked on couches or on the balcony in long shifts fueled by take-away food. The typical startup atmosphere fostered a sense that “all means of retreat had been cut off, so we needed to fight and win,” said Allen Zhang, a Ding Talk product manager and one of the original 20 team members. Eight months later, in January 2015, the first version of Ding Talk was unveiled.

The team has since grown to around 180. It’s a group with an ambitious agenda far beyond providing just a messaging app for the workplace. Millions of China’s small-and medium-sized enterprises (SMEs) are still operating in the pre-digital era. It’s not unusual for employees to turn in handwritten leave requests and many companies still rely on paper-based address books.

Ding Talk is trying to usher them into the 21st century by serving as a cost-efficient, multi-purpose enterprise IT portal providing not just communications but also cloud-based services such as approval processing and document storage.

Based on a “freemium” model, basic services of Ding Talk cost nothing, but users need to pay small fees if their usage of, say, conference-call minutes or cloud storage surpasses the standard allotment. Ding Talk has an open API (application programming interface), meaning independent software developers (ISVs) can use Ding Talk as a foundation to create additional applications and solutions.

The goal is to create a platform for low-cost, mobile-optimized, cloud-based corporate IT solutions, freeing companies from the costs of building or buying software and maintaining their own servers for data storage and communications. So far, more than 30,000 developers have been working on the open API platform to create custom solutions for more than 200,000 individual businesses in 80 industries. “We want to bring the technologies and strengths that Alibaba uses to run its business to more SMEs,” said Zhang.

To that end, the Ding Talk works with large companies such as conglomerate and investment group Fosun and department store chain Intime on tailor-made solutions that integrate their existing back-office software. The Ding Talk team—product managers, engineers and designers—also visits smaller clients to better understand market needs and build new functionality.

Hangzhou Compass, a 200-employee IT company selling both hardware and software, was Ding Talk’s first client. “My employees used to find me in their own ways, by text, by QQ or by WeChat,” said Hangzhou Compass CEO Shi Nan. “I needed to monitor several portals to make sure I didn’t miss any important messages. I told Ding Talk’s team that I wanted one app for working,” Shi said. Collaboration the Ding Talk team resulted in the creation of an integrated communications app that also functions as the company’s internal expense, legal and HR approval systems.

Hangzhou Compass also used the app to resolve employee complaints that the company’s system of clocking in and out at work using a fingerprint-recognition device resulted in a daily bottleneck because everyone had to use the device at the same times of day. “The queue was always very long at the last minute, making employees who arrive on time to be late,” said Shi.

The system was replaced by a Ding Talk feature that allows employees to clock in by mobile phone when they get within a certain distance of the company. Bonus: in addition to making flexible working hours for individual employees feasible, the Ding Talk solution has eased the monthly chore of tracking attendance, a task that previously took three people three days to accomplish. Now it’s automated. Attendance records can be output in seconds.

Ding Talk is currently is not turning a profit, but Zhang says it is still early days. “It’s easier to make money with business products than products for consumers because business apps are stickier,” he said. “It’s not possible for companies to move everything to another system overnight.”

Ding Talk’s ambition doesn’t end in China. There’s an English-language version, although functionality has yet to be localized to foreign markets. “Five or six years ago, Chinese tech companies duplicated lots of innovations from the West,” Zhang said. “Now it’s different, we have many original ideas. We hope our product and new way of work can be leveraged by overseas companies.” If enough SMEs think Ding Talk makes it easy to do business anywhere, Zhang’s hope could become reality.