The evolving magic of Ma’s data management

HAN WOO-DUK
The author is a senior reporter of the China Lab.

On November 11, 2023, China celebrated the Singles Day shopping festival. About 639 million orders were made in China on one day, and most of them were sent within 24 hours. A customer in the northern Heilongjiang Province placed an order for a pair of Nike shoes made in Guangdong Province in the south in the morning and got it delivered in the afternoon. How was it possible?

“We have passed the age of information technology and headed to the age of data technology,” said Alibaba founder Jack Ma in 2014. While other companies were occupied with fast data processing, Ma focused on securing customer data. Alibaba’s big data accurately predicted demand for goods, enabling the company to bring products to the distribution center in each region in advance. He made 3,000-kilometer distance between Heilongjiang and Guangdong disappear.

In 2016, Ma discussed “new distribution.” The core ideas are an integration of online and offline, fast shipping and 100 percent settlement through its own payment system. Alibaba’s grocery brand, Hema Xiansheng, engaged in a shipping war under the slogan, “A radius of 3 kilometers delivered within 30 minutes.” To keep the principle of “no vegetables stored overnight,” he drove merchandisers to the farming regions. Since financial information is added through the payment system, Ma’s data has become more reliable.

When he was talking about “new distribution,” Pinduoduo founder Colin Huang claimed, “We will eliminate distribution altogether.” Established in 2015, the ecommerce platform for agriculture lowered prices by directly connecting costumers to manufacturers (C2M), and lowered prices further through a joint purchase system. His business model requires no warehouse or merchandiser, which allows the company to lower prices. Huang, a Google alum, utilized AI in sorting big data early on. Data has become more precise.

The latest trend in Chinese e-commerce is “shopping by recommendation.” Customers searching and purchasing a product in a shopping platform is outdated. Now, platforms select products that customers are likely to buy and send the information to their phones. The recommendations are shown when searching for news, watching shorts or playing games. Once you buy a product, related products are recommended. Data has developed to the level of controlling customer’s spending psychology.

That’s how “Ma’s data” evolved. Chinese platforms like AliExpress and Temu — one of the biggest issues in Korea today — are the descendants. Armed with data DNA, they are relentlessly expanding market shares. The data technology era Jack Ma declared 10 years ago is becoming a reality right before our eyes.