Daniel Zhang at Davos: Make Mistakes, Embrace Change, Use Tech for Good

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Daniel Zhang at Davos: Make Mistakes, Embrace Change, Use Tech for Good

Alibaba CEO Daniel Zhang spoke at the World Economic Forum in Davos, Switzerland, on Thursday. Interviewed by WEF Chairman Klaus Schwab, the conversation centered on the so-called Fourth Industrial Revolution, driven by the rapid proliferation of digital technologies, as well as Zhang’s insights into Alibaba, its culture and how the company is putting artificial intelligence to work for both consumers and merchants. Below are some highlights from the interview.

On succeeding Jack Ma as chairman of Alibaba later this year:

“[Ma] said what he believed. But the most important thing, how to make other people to believe to get a result. So, he shared a vision in public, but from the heart, it’s results-driven. A lot of people see me and say, OK, you have a finance background, you must be results-driven. Yes, that’s true. But from the heart, I’m very passionate and mission-driven. And I think that’s the most important similarity and which can lead the company to the next journey.”

On Alibaba’s role in the Fourth Industrial Revolution:

“If you look at the context of the Fourth Industrial Revolution, actually it’s totally in line with what we envisioned [when the company was formed in 1999] and what our mission is ‚Ķ in the digital era, to make it easy to business anywhere ‚Ķ Today, we are all in the digital era. So, everybody is talking about how we can transform society and business in a digital way. I think these two things are totally in line with the context with the Fourth Industrial Revolution. And how to ‚Ķ use data technology, use the new technology to make a good transformation in this Fourth Industrial Revolution.”

On China’s rapid uptake of digital technology:

“To be honest, I do feel a gap [between China and many other countries when it comes to adopting digital technologies]. If people spend some time in China, living there for six months, I have high confidence that people will have the same experience. Take the example, like today living in China, you don’t have to take your wallet with you. You have your phone, you can do anything. You can make payment, you can buy some food, you can go to the cinema, you can take the subway. Anywhere you go, you just use your phone. But now, in developed economies, most people are still living with a credit card. But that’s a real example to show why we move faster in China because, actually, the credit card is not that well-penetrated in China even now. So, which means that we skipped pretty much the credit card society and into a mobile society. Just like today in some Southeast Asian countries, they just skipped the PC time and went directly to the mobile time. I think if we look at development of history, if the existing infrastructure is not good enough, it creates a new opportunity, which is you just go straight ahead to the next stage‚Ķ”

On young people and the internet:

“Young people today, they are living on the internet. That’s a fact ‚Ķ they are the generation living on the mobile internet. Just like when we were born, we thought electricity and lights were so natural. Today, the younger generation, Generation Z, when they were born, they think the iPad, the iPhone, is such a natural thing to be used. So, I think that’s today’s lifestyle.”

“We have a lot young people around us [at Alibaba]. Don’t be afraid to be challenged by young people. They may bring you some ideas you’ve never heard of. But don’t simply say no.”

On keeping pace with the Fourth Industrial Revolution:

“Whether or not you like it, it is happening. That’s the most important thing. So rather than questioning it or hesitating, I think we just go ahead and embrace this. To try to find a good way to use new technologies, to find a better use of AI ‚Ķ To be an innovator. The key thing is how to embrace the change, how to think differently and not just wait for something to happen.”

How Alibaba culture encourages this mindset:

“Today, we are facing a lot of uncertainties. We are in a fast-changing world and we also have a lot of questions about the future. But the key thing is we make concrete steps to move forward, we try. Trying is very important. Maybe this try results in a good or even bad result. But at least we tried, we know this is wrong. Then we can we can make some adjustments and try again. We always say, don’t be afraid of making mistakes. The more mistakes you make, the more corrections you have and you know the direction [to go from there].”

On the power of artificial intelligence:

“All Alibaba’s businesses are powered by artificial intelligence ‚Ķ all of our operations are powered by data technology ‚Ķ on our retail platforms, we give people a lot of recommendations based on personal preference. And we even use voice-recognition technology in our chat bots to enable customer service. This is part of our business. So, artificial intelligence, to us, is everywhere. We do believe that with the new technology we can create a better experience both for our customers but also to improve the operating efficiencies of the merchants.”

On Alibaba as a job creator:

“We try to make the technology more inclusive on our platform ‚Ķ the key thing at Alibaba is to be a good enabler. To enable the participants on the platform to do a better business ‚Ķ because of technology, we can help our merchants, our sellers, to have efficient operations on our platform. Because of this, we can help farmers from, for example, Rwanda ‚Ķ to sell directly to China. And one day of sales [on our platform] was equal to last year’s [total] volume [for them]. So, if we can connect the supply with the demand directly, we can create a lot of synergies. But the key thing is to make it more inclusive. When we do this, we can add more value in the whole value chain. For example, if you want to help the farmers ‚Ķ you can help them to sell enough products to the end customer, then you will comfortable to give them micro-lending, to help them to grow their business. If that’s the case, you can create a lot of value, synergies, for the whole society to make it even better.”

On prioritizing sustainability in Alibaba’s business operations:

“Today, what we do is not only just use the money to do some projects, as many other companies are doing, but what we do is leverage the commerce platform we built up. For example, we encourage the merchants on our platform to use green materials to do packaging. Also, we help people living in poverty areas to help them to create their business and to sell the organic agricultural products into the urban cities. So, to do it in a more sustainably way is always our view. But we do have a very, very strong commitment, again, to make this environmental-protection mission not only a job for ourselves, but also, because of us, we can initiate all of the participants on our platform to be part of is.”

On China’s growth potential:

“China has a lot of opportunities ‚Ķ China’s such a huge market with over 1 billion consumers. As long as the consumption power is there, the U.S., Europe, all of the world, people want to come to China because the opportunity’s there ‚Ķ So, the most important thing is the consumption power, which I believe today [will be] China’s strong, growing driver in the future. Because if you look at the real-wage increase in the past few years in China’s middle-class families, if you look at the household debts for Chinese families as compared to the U.S., actually it’s very low ‚Ķ the consumption power is there.”

AlibabaAlibaba GroupChinaChinese ConsumersDaniel ZhangEuropeSustainabilityTechnologyWorld Economic Forum
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