And how his company will transform the world of retail.
Alibaba Group executive chairman Jack Ma predicted three more decades of rapid technological change across industries in his latest letter to shareholders sent today.
“Throughout history, technological disruptions have followed similar trajectories: 20 years of technological disruption followed by 30 years of further rapid change as new technologies are applied throughout society,” he wrote.
Those three decades are what’s ahead. Both Ma’s and Alibaba CEO Daniel Zhang’s shareholder letters said for Alibaba baba , change would involve transforming alongside traditional retailers in a multi-trillion-dollar market.
“From our perspective, the most important opportunity on the horizon is not growing online sales in isolation but rather helping traditional retailers upgrade into a brand new retail model,” Zhang wrote. “The excitement is in leveraging internet-based approaches and new technologies to transform the [$4.5 trillion] China retail market to meet the demands of the ongoing consumer upgrade.”
Alibaba’s pitch would be inviting retailers into its ecosystem of online selling platforms, advertising venues (like its Youku Tudou video site), and cloud computing offerings.
Ma said the Internet’s effect on industry marks an inflection point as important as the introduction of electricity. “Over the next 30 years, with computing power as the new `technology breakthrough’ and data as the new `natural resource,’ the landscape of retail, financial services, manufacturing and entertainment will be transformed.”
Alibaba has defied skeptics since its 2014 IPO. In the latest quarter, sales jumped 59%. The company is expanding into southeast Asia, runs the dominate electronic payment system in China, spent billions on entertainment business like Youku, and partnered with traditional retailers like the Best Buy-esque Chinese retailer Suning.
Alibaba counts 430 million annual buyers across its platforms, or one out of three Chinese. More than three quarters of revenue from its Chinese e-commerce sites came from mobile users; before the IPO, it was a single-digit percentage, according to Ma.
“In 20 years, we hope to serve 2 billion consumers around the world, empower 10 million profitable businesses and create 100 million jobs,”Ma wrote.
The other topic both Ma and Zhang included in their letters was Alibaba’s expanding cloud business. Last quarter Cloud computing revenue grew 156% to $187 million, but it also lost $24 million.
Ma said Alibaba Cloud hosts more than one third of China’s websites, and similar to Amazon’s cloud business, is a growth hub.
“Supported by the twin pillars of cloud computing and Big Data,” he said, “our goal is to empower merchants with the ability to transform and upgrade their businesses for the future.”