BEIJING — Daniel Zhang, Alibaba’s chief executive officer and successor to Jack Ma, took the stage Thursday at the annual World Economic Forum in Davos, Switzerland, doling out advice about how to navigate the “fourth industrial revolution.”
As head of an Internet behemoth that has been at the forefront of the digital economy, Zhang talked about management strategy, the U.S.-China trade war, and the unique characteristics of the China consumer today.
Below is some of what he had to say.
On embracing the digital upheaval:
“Whether you like it or not, it’s happening. That’s the important thing, rather than question it or hesitate, we just go ahead and embrace this. We try to find a way, to find a good way, in terms of how to use new technology, how to better use AI. I think that’s the most important thing, to be an innovator. If not, someone else will be innovative and ahead of us.”
On how to handle uncertainty:
“Well, today we are facing a lot of uncertainties in how to win in a fast-changing world. We have a lot of questions about the future…but we try. Try is very important. Maybe the ‘try’ resulted in a not good or even bad result. But at least we know it’s wrong, we make some adjustments and we try again. Don’t be afraid of making mistakes, the more corrections you have, at least you know the direction.”
On a younger generation’s ideas:
“Don’t be challenged by young people by the ideas they bring us. Don’t just say no….We can enjoy the lifestyle they have, even if you don’t like it. If I have time, I enjoy live-streaming. People don’t just do listings to sell the products anymore. Ladies show how to do makeup and in one hour will sell tens of units. Maybe you don’t like it, but I have to enjoy this to understand why people like that, to have some curiosity. Then you will try to find some fun.”
On China’s advanced mobile society:
“Today, where we live in China you don’t have to take a wallet with you. You have your phone, you can do anything, you can make payments, you can buy food, you can go to the cinema. Anywhere you go, you’re just with a phone. When we talk about the developed economy, most people live with a credit card. That is a real example of why we move faster in China. Actually credit cards are not that well penetrated in China…we skipped the credit card society and went straight to mobile society.”
On the U.S.-China trade war:
“If you look at the trade war — the U.S.-China relationship — from China’s side, most Chinese people want to see a better and good resolution between the two countries. People all realize that these two worlds’ largest economies…can create value for all around, not just for these two countries, but many other countries.”
On China acting as a self-sufficient market:
“China itself has a lot of opportunities…and the most important thing is if we can make a better economy. It’s such a huge economy with over 1 billion consumers. If we can make the right conditions in the market, it’s a self-sufficient market, as long as the consumption power is here.”
As Zhang talked digital transformation, Luohan Academy, an open research institute by Alibaba Group Holding Ltd., released its first report highlighting the relationship between digital technology and economic growth. Launched during a separate event in Davos that was cohosted by the World Bank, the report highlighted the benefits of the “fourth industrial revolution,” and addressed the challenges it brings.
The report argued that digital platforms have created an economically and socially integrated ecosystem, where users and sellers alike can benefit from data and digitized information.
Although data is often stigmatized, the report acknowledged it as the primary resource that will drive innovation and enhance the digital ecosystem. “Put simply, data is a resource as essential to development as oil. We all know that oil will, one day, run out. Data, on the other hand, will never be used up, and the more people use it, the more valuable it becomes,” Jack Ma, founder and executive chairman of the Alibaba Group, said in the report.
Data enables technology to be more inclusive and accessible. To wit, China and other economies have jumped straight from a cash currency to mobile currency, with 60 percent of the population in low-income countries having access to mobile phones, according to the Luohan report. Thanks to the mobile phone, people in these economies don’t need to rely on credit cards and desktop computers.
Online shopping platforms have also allowed consumers living in non-commercial areas to shop across an average of 1,000 kilometers, as opposed to just a few kilometers. These out-of-town consumers rely more on e-commerce than those in richer regions.
Digital technology has also increased inclusiveness and has provided opportunities to people with disabilities. The Luohan report states that, “in 2016, 160,000 online stores on Taobao were operated by people with disabilities, creating 12.4 billion RMB in sales.”
Other benefits, according to the report, include ease of adoption, with “a low threshold of education and skills needed to take advantage of technology.” At the same time, the use of technology also raises the level of education. According to the report, mobile usage has increased literacy. E-commerce workers with junior high or primary school degrees earn close to those with college degrees, the report found.