Alibaba CTO Jeff Zhang touted his company’s big data analytics prowess during an address at the Alibaba Technology Forum in Seattle, saying the retailer's ability to synthesize data from its consumer e-commerce sites (as well as payments and microblogging sites in which it's invested) gives it a competitive edge.
Zhang demurred from an opportunity to describe Amazon as a competitor, saying Alibaba's primary business model of being a middleman between sellers and buyers is different from Amazon's, and that Alibaba is not "terribly clear on Amazon China's plans."
Alibaba opened its first U.S. office in Seattle two year ago, and moved to nearby Bellevue last fall. It now has about 40 engineers working on different projects there, but has not announced any plans to expand its presence.
If Alibaba isn't "terribly clear" on Amazon China's plans, then maybe it should take a closer look.
Zhang's comments on Amazon are interesting and coy, given that Alibaba and Amazon are often described as competitors, and that Amazon in fact does run a marketplace business that seems to be particularly popular among Chinese sellers, according to a recent survey that suggested 62% of Chinese e-retailers sell products on Amazon.
While Alibaba has an incumbent's edge in the world's largest retail market, it should not sleep too long on the e-commerce giant that already has taken over the rest of the world. That attitude also should extend to Alibaba's small presence in the U.S.—just down the road, so to speak, from Amazon. Certain Chinese companies have been very tentative in establishing offices in the U.S. and participating in the U.S. market, but at some point it seems that Alibaba will have to commit to a larger presence and a more detailed plan for this market, because what's the point otherwise?
Regarding analytics, many e-commerce companies and retailers of all types have a pretty intense focus on data analytics these days, so Alibaba certainly hasn't invented that capability. But very few companies have as much data to draw on from as many platforms as Alibaba.
With such a deep well of data, Alibaba should be able to craft world-class shopping experiences for its end customers and world-class selling capabilities for its seller partners. Counterfeit fraud reports that long have shadowed Alibaba, however, might be inhibiting the company's potential to do that, and might also be keeping Alibaba from really going toe-to-toe with Amazon. Zhang said Alibaba is using some of its data processing systems to monitor and screen for counterfeits.
Regarding other technologies, it sure sounds like Alibaba is interested in some of the same innovations as Amazon, among others, are. It's probably going to get a whole lot harder to insist that Alibaba and Amazon aren't competitors.