{"id":35195,"date":"2018-11-13T19:54:21","date_gmt":"2018-11-14T00:54:21","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/how-alibaba-leverage-machine-learning-to-disrupt-retail-and-pathway-to-reimagine-online-to-offline-shopping-experiences\/"},"modified":"2018-11-13T23:10:16","modified_gmt":"2018-11-14T04:10:16","slug":"how-alibaba-leverage-machine-learning-to-disrupt-retail-and-create-pathway-to-reimagine-online-to-offline-shopping-experiences","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/how-alibaba-leverage-machine-learning-to-disrupt-retail-and-create-pathway-to-reimagine-online-to-offline-shopping-experiences\/","title":{"rendered":"How Alibaba leverage machine learning to disrupt retail and create pathway to reimagine online-to-offline shopping experiences"},"content":{"rendered":"<p><strong>Alibaba at the early stage<\/strong><\/p>\n<p>Founded in 1999, with a mission to make it easy to do business anywhere by leveraging innovation and technology, Alibaba created an online B2B marketplace platform (Alibaba.com and 1688.com) to match Chinese suppliers with businesses and later expanded its services to C2C and B2C via Taobao.com and T-mall.com, which are now two biggest e-commerce websites in the world. [3]<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/1-3.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-36116\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/1-3.jpg\" alt=\"\" width=\"516\" height=\"279\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/1-3.jpg 770w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/1-3-300x162.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/1-3-768x415.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/1-3-600x324.jpg 600w\" sizes=\"auto, (max-width: 516px) 100vw, 516px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><em>Exhibit 1<\/em>: Alibaba\u2019s Platforms [3]<\/p>\n<p><strong>The Use of AI<\/strong><\/p>\n<p>Alibaba\u2019s principle of \u201cCustomer-First\u201d [4] has allowed the company to focus on understanding customer&#8217;s behavior, identifying their latent needs and create value for them.\u00a0Alibaba has put AI at the center of its e-commerce operations, helping to extract customer insights and enhance their customer journey, while empowering merchants to operate efficiently [5]. Alibaba platform\u2019s key features are as follows:<\/p>\n<ul>\n<li><strong>Prediction for Personalization <\/strong>[6]<strong>:\u00a0<\/strong>Common pain point during the pre-purchase process for consumers is \u201cOverloaded Information\u201d, which complicate customers\u2019 decision process. Alibaba\u2019s smart product search and recommendation algorithm (\u201cE-commerce brain\u201d) use\u00a0customers\u2019 browsing data to predict consumer\u2019s shopping preference, suggesting relevant product based on their interests to resolve the pain point. For merchants, the algorithm also suggests product assortment, recommendations, pricing strategy, and inventory management enhance merchant\u2019s performance on the website<\/li>\n<li><strong>Accessible Customer Services:\u00a0<\/strong>One of the issues on online shopping experiences was access to customer services. Alibaba has developed \u201cAliMe\u201d [7], a 24\/7 chat bot for customer support, which now serves over millions of customer queries per day. AliMe understands more than 90% of customer inquiries and has significantly improved merchant\u2019s effectiveness, cutting half of the merchant\u2019s time on answering chats and spending more time to boost sales. [8]<\/li>\n<\/ul>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/2-2.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-35225\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/2-2-1024x386.jpg\" alt=\"\" width=\"640\" height=\"241\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/2-2-1024x386.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/2-2-300x113.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/2-2-768x290.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/2-2-600x226.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/2-2.jpg 1867w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><em>Exhibit 2<\/em>: Example of Alibaba\u2019s AI-powered Chatbot in different languages [9]<\/p>\n<ul>\n<li><strong>Automated fulfillment operation:\u00a0<\/strong>Fast and reliable delivery are top of mind concerns for online shoppers. <a href=\"https:\/\/www.youtube.com\/watch?v=egvb_e4tsec\">700 robots at Cainiao<\/a>, Alibaba\u2019s logistics arm, are processing orders from load to unload, running by zero employees. The process is so efficient to allow delivery without 72 hours. [10] In term of delivery, Alibaba also used drones for some deliveries. Meanwhile, the company is also testing a delivery driverless vehicle (G Plus) with a built-in navigation system that relies on LIDAR to create a 3Dmap. Alibaba expects the G Plus will begin commercial production by the end of this year [11].<a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-36077\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-1-1024x683.jpg\" alt=\"\" width=\"445\" height=\"297\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-1-1024x683.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-1-300x200.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-1-768x512.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-1-600x400.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-1.jpg 1200w\" sizes=\"auto, (max-width: 445px) 100vw, 445px\" \/><\/a><\/li>\n<\/ul>\n<p style=\"text-align: center\"><em>Exhibit 3<\/em>: G Plus, Alibaba&#8217;s Deliver Driverless Vehicle [9]<\/p>\n<p>According to Jack Ma \u201cLarge-scale computing and data are the father and mother of AI.\u201d [6] AI at Alibaba is, therefore, very effective as the company has unlimited capital to invest in large-scale computing, supporting with huge sets of transaction data from the platforms.<\/p>\n<p><strong>Alibaba\u2019s next move:<\/strong><\/p>\n<p>Alibaba\u2019s next step is to sustain existing value and expand globally. The company has the\u00a0ambitious target of creating 100 million jobs, supporting 10 million profitable businesses and serving 2 billion consumers across the world \u2013 one-third of the global population \u2013 in the next 20 years [12].\u00a0 I agree with Alibaba\u2019s strategy to enter offline retail as it embraces more opportunities to pursue the company\u2019s mission, creating more spaces for SMEs to grow. Alibaba will continue to thrive by leveraging data and AI as its competitive advantage over typical brick and mortar store.<\/p>\n<p>In this next move, I would recommend Alibaba to continue their investment in AI for omnichannel retail experiences, yet what is more important is to also invest in AI talent management. As AI becomes increasingly beneficial to every industry, the world is now facing AI talents shortage [13]. According to Exhibit 4, Alibaba is not yet among the top companies, investing in AI talent. To succeed in the long run, AI talents will be keys to advance innovations. Alibaba should start to invest in people from now on &#8211; attracting, developing and retaining AI talents.<\/p>\n<p>Nevertheless, this becomes a challenging mission as the employment market is very competitive among giant tech firms. In this case, what are possible solutions for Alibaba to attract AI talents to sustain its omnichannel mission?<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-4.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-35226\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-4.png\" alt=\"\" width=\"558\" height=\"314\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-4.png 960w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-4-300x169.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-4-768x432.png 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/3-4-600x338.png 600w\" sizes=\"auto, (max-width: 558px) 100vw, 558px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><em>Exhibit 4<\/em>: Global AI Talent Pool Heat Map [14]<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/4-3.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-35233\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/4-3-1006x1024.png\" alt=\"\" width=\"516\" height=\"526\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/4-3-1006x1024.png 1006w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/4-3-295x300.png 295w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/4-3-768x782.png 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/4-3-589x600.png 589w\" sizes=\"auto, (max-width: 516px) 100vw, 516px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><em>Exhibit 5<\/em>: Top 20 Companies investing in AI Talent [15]<\/p>\n<p>(800 words)<\/p>\n<hr \/>\n<p>Citations<\/p>\n<p>[1]\u00a0Team, CIW. 2018. &#8220;Total Retail Sales In China Hit US$5,781 Bn In 2017, Over 19% From Online&#8221;.\u00a0<i>China Internet Watch<\/i>. https:\/\/www.chinainternetwatch.com\/23364\/retail-2017.<\/p>\n<p>[2]<i> 11.11 Global Shopping Festival 2017<\/i>. 2017. Ebook. China: Alibaba. https:\/\/www.alizila.com\/wp-content\/uploads\/2017\/11\/Factsheet_11.11-Global-Shopping-Festival-Master-Fact-Sheet_finalfinalfinal.pdf?x95431.<\/p>\n<p>[3] Anadiotis, George. 2018. &#8220;Alibaba: Building A Retail Ecosystem On Data Science, Machine Learning, And Cloud | Zdnet&#8221;.\u00a0<i>Zdnet<\/i>. https:\/\/www.zdnet.com\/article\/alibaba-building-a-retail-ecosystem-on-data-science-artificial-intelligence-and-cloud\/.<\/p>\n<p>[4] &#8220;Customer First \u2013 Or Shareholder First? | CBMC International&#8221;. 2018.\u00a0<i>Cbmcint.Com<\/i>. https:\/\/www.cbmcint.com\/customer-first-or-shareholder-first\/.<\/p>\n<p>[5] Mitchell, Vanessa. 2018. &#8220;Alibaba: New Retail Model Goes Beyond E-Commerce&#8221;.\u00a0<i>Cmo.Com.Au<\/i>. https:\/\/www.cmo.com.au\/article\/644175\/alibaba-new-retail-model-goes-beyond-e-commerce\/.<\/p>\n<p>[6] &#8220;At Alibaba, Artificial Intelligence Is Changing How People Shop Online | Alizila.Com&#8221;. 2018.\u00a0<i>Alizila.Com<\/i>. https:\/\/www.alizila.com\/at-alibaba-artificial-intelligence-is-changing-how-people-shop-online\/.<\/p>\n<p>[7] &#8220;Chatbot Engine Behind Alibaba\u2019S Alime Customer Service Bot&#8221;. 2018.\u00a0<i>Medium<\/i>. https:\/\/medium.com\/@alitech_2017\/better-e-commerce-customer-service-from-alime-to-you-656e34934f66.<\/p>\n<p>[8]\u00a0Yu, Eileen. 2018. &#8220;Alibaba Smartens Up Chatbot Ahead Of 11.11 Shopping Festival | Zdnet&#8221;.\u00a0<i>Zdnet<\/i>. https:\/\/www.zdnet.com\/article\/alibaba-smartens-up-chatbot-ahead-of-11-11-shopping-festival\/.<\/p>\n<p>[9]\u00a0&#8220;Alibaba\u2019S Customer-Service Bot Upgraded Ahead Of 11.11 | Alizila.Com&#8221;. 2018.\u00a0<i>Alizila.Com<\/i>. https:\/\/www.alizila.com\/alibabas-customer-service-bot-gets-upgrade-ahead-of-11-11\/.<\/p>\n<p>[10] Nathani, Komal. 2018. &#8220;This Firm Opens China&#8217;s Biggest Robotic Warehouse For Single&#8217;s Day Shopping Demand&#8221;.\u00a0<i>Entrepreneur<\/i>. https:\/\/www.entrepreneur.com\/article\/322539.<\/p>\n<p>[11]\u00a0&#8220;Alibaba Made A Driverless Robot That Runs 9 Mph To Deliver Packages&#8221;. 2018.\u00a0<i>The Verge<\/i>. https:\/\/www.theverge.com\/circuitbreaker\/2018\/5\/31\/17413836\/alibaba-driverless-robot-deliver-packages-speed.<\/p>\n<p>[12]\u00a0&#8220;Jack Ma Wants To Create 100 Million Alibaba Jobs &#8211; Inside Retail Asia&#8221;. 2018.\u00a0<i>Inside Retail Asia<\/i>. https:\/\/insideretail.asia\/2017\/06\/12\/jack-ma-wants-to-create-100-million-alibaba-jobs\/.<\/p>\n<p>[13]\u00a0&#8220;The AI Talent Shortage \u2013 Nikolai Yakovenko \u2013 Medium&#8221;. 2018.\u00a0<i>Medium<\/i>. https:\/\/medium.com\/@Moscow25\/the-ai-talent-shortage-704d8cf0c4cc.<\/p>\n<p>[14]\u00a0&#8220;Global AI Talent Pool Report&#8221;. 2018.\u00a0<i>Jfgagne<\/i>. http:\/\/www.jfgagne.ai\/talent\/.<\/p>\n<p>[15]\u00a0&#8220;Automation Jobs Will Put 10,000 Humans To Work, Study Says&#8221;. 2018.\u00a0<i>Fortune<\/i>. http:\/\/fortune.com\/2017\/05\/01\/automation-jobs-will-put-10000-humans-to-work-study-says\/.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alibaba has leveraged Artificial Intelligence (AI) to disrupt China Retail Industry for the past 19 years. Nevertheless, 81% of retail consumption in China still comes from the offline channel [1]. Realizing the importance of offline presence, the giant online e-commerce shifts its gear towards Omnichannel strategy. In 2017, Alibaba opened futuristic groceries stores, Hema, offering 30-minute deliveries and facial-recognition payment. In the same year, T-mall pop-up stores are introduced in collaboration with over 100 domestic and international brands, promoting inventive &amp;amp;amp;quot;Retailtainment\u201d shopping experiences [2]. While offline stores around the world are suffering, the giant e-commerce leveraged AI and made a brave move to enter the physical world in an innovative means. Or this will be another significant retail disruption, reinventing offline shopping experiences&#8230;<\/p>\n","protected":false},"author":11941,"featured_media":36414,"comment_status":"open","ping_status":"closed","template":"","categories":[5075,2563,4271,1036,49,346,220,1082,4620,2746],"class_list":["post-35195","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-artificial-inteligence","category-brick-and-mortar","category-consumer-retail","category-digital-retail","category-e-commerce","category-machine-learning","category-omnichannel","category-talent","category-talent-acquisition","category-talent-management","hck-taxonomy-organization-alibaba","hck-taxonomy-industry-retail","hck-taxonomy-country-china"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Alibaba leverage machine learning to disrupt retail and create pathway to reimagine online-to-offline shopping experiences - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/how-alibaba-leverage-machine-learning-to-disrupt-retail-and-create-pathway-to-reimagine-online-to-offline-shopping-experiences\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Alibaba leverage machine learning to disrupt retail and create pathway to reimagine online-to-offline shopping experiences - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Alibaba has leveraged Artificial Intelligence (AI) to disrupt China Retail Industry for the past 19 years. Nevertheless, 81% of retail consumption in China still comes from the offline channel [1]. Realizing the importance of offline presence, the giant online e-commerce shifts its gear towards Omnichannel strategy. In 2017, Alibaba opened futuristic groceries stores, Hema, offering 30-minute deliveries and facial-recognition payment. In the same year, T-mall pop-up stores are introduced in collaboration with over 100 domestic and international brands, promoting inventive &amp;amp;amp;quot;Retailtainment\u201d shopping experiences [2]. While offline stores around the world are suffering, the giant e-commerce leveraged AI and made a brave move to enter the physical world in an innovative means. 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Technology and Operations Management","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/how-alibaba-leverage-machine-learning-to-disrupt-retail-and-create-pathway-to-reimagine-online-to-offline-shopping-experiences\/","og_locale":"en_US","og_type":"article","og_title":"How Alibaba leverage machine learning to disrupt retail and create pathway to reimagine online-to-offline shopping experiences - Technology and Operations Management","og_description":"Alibaba has leveraged Artificial Intelligence (AI) to disrupt China Retail Industry for the past 19 years. Nevertheless, 81% of retail consumption in China still comes from the offline channel [1]. Realizing the importance of offline presence, the giant online e-commerce shifts its gear towards Omnichannel strategy. In 2017, Alibaba opened futuristic groceries stores, Hema, offering 30-minute deliveries and facial-recognition payment. In the same year, T-mall pop-up stores are introduced in collaboration with over 100 domestic and international brands, promoting inventive &amp;amp;amp;quot;Retailtainment\u201d shopping experiences [2]. While offline stores around the world are suffering, the giant e-commerce leveraged AI and made a brave move to enter the physical world in an innovative means. Or this will be another significant retail disruption, reinventing offline shopping experiences...","og_url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/how-alibaba-leverage-machine-learning-to-disrupt-retail-and-create-pathway-to-reimagine-online-to-offline-shopping-experiences\/","og_site_name":"Technology and Operations Management","article_modified_time":"2018-11-14T04:10:16+00:00","og_image":[{"width":832,"height":284,"url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/Capture-18.png","type":"image\/png"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/how-alibaba-leverage-machine-learning-to-disrupt-retail-and-create-pathway-to-reimagine-online-to-offline-shopping-experiences\/","url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/how-alibaba-leverage-machine-learning-to-disrupt-retail-and-create-pathway-to-reimagine-online-to-offline-shopping-experiences\/","name":"How Alibaba leverage machine learning to disrupt retail and create pathway to reimagine online-to-offline shopping experiences - 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