Original link: https://www.latepost.com/news/dj_detail?id=1203
Alibaba’s main business spin-off a new holding subsidiary – Lingyang.
Lingyang started preparations in the second half of last year, and was officially registered and established at the end of last year. After 8 months of strategy, product, and organizational sorting, the brand was officially released today. Peng Xinyu, vice president of Ali Group and head of Ali Data Middle Office, serves as the CEO of Lingyang, and he reports to Ali CTO Cheng Li.
Lingyang currently integrates multiple teams such as Alibaba’s data center, business center, customer service system, and supply chain management system, covering almost all of Alibaba’s data intelligence-related enterprise service products. It is the unified export of Alibaba’s data intelligence services.
These teams were originally distributed in different business divisions and business groups, and reported to different Alibaba executives. For example, the data center and business center are reported to CTO Cheng Li; the customer service system is reported to CCO (Chief Customer Officer) Zheng Junfang.
“LatePost” learned that the idea of Lingyang becoming an independent company is not an idea determined at the beginning. It stems from a problem that Zhang Yong, chairman of the board of directors and CEO of Alibaba in 2021, is concerned about: how to help in the context of digital transformation Does the enterprise manage its own business well in all aspects and on multiple platforms?
Subsequently, among the three plans with low to high degree of integration, Alibaba management chose the one-step plan with the highest degree of integration and the most radical, and decided to make Lingyang an independent company.
Lingyang supports multi-platform and multi-cloud, providing enterprises with analysis and decision-making, marketing, order management, supply chain management and other services.
Changes in the environment are favorable for Lingyang to do more platforms now. Last year, China’s anti-monopoly was in full swing, and the “Personal Information Protection Law” and “Data Security Law” were promulgated at the same time. Peng Xinyu said that now the water level of each platform has reached the same level, the data should be given to the merchants, and the platform protection of the platform is very clear.
Peng Xinyu told LatePost that most SaaS products on the market are to improve the efficiency of a single link, while Lingyang applies data intelligence capabilities to all aspects of business operations, ultimately helping companies achieve growth.
The large and small subsidiaries established by Ali in the past can be roughly divided into two categories. One is Tmall, Taobao, Hema and Fliggy at the beginning of their establishment. They are wholly-owned by Ali, and employees hold the shares of the group. The second is Local Life, Cainiao, etc. They issue separate options to employees, and some of them have plans for external financing.
Lingyang is currently closer to the first category in terms of legal structure, but the multi-platform business positioning determines that Lingyang may have stronger independence in operation.
Lingyang did not disclose its revenue target for this year. Peng Xinyu said that by the end of this year, their primary performance target is to acquire a certain number of new customers.
One question, three solutions
A step-by-step derivation of independence
In July 2021, at a business meeting organized by Zhang Yong, a question was not concluded.
Zhang Yong’s business meetings often have thorny issues. They often involve important direction decisions or difficult organizational coordination. When the meeting is over, the questions often point to clear decisions, but not this time. After the meeting, Zhang Yong said to Peng Xinyu, who was in charge of the data center, “I leave this question to you to go back and study.”
The unresolved question is: How can Ali help merchants reduce operating costs, improve operating efficiency, and revive business during the epidemic?
Ali hopes to reduce the business threshold and cost of merchants on the Ali platform. But Taobao and Tmall’s fee reductions alone are not enough. Merchants are not only doing business on Ali.
The question Zhang Yong handed to Peng Xinyu for research is actually: how to help merchants reduce costs, increase efficiency and achieve growth in the complete business process and on various platforms?
Previously, several departments in Alibaba provided different vertical services for enterprise customers, including data center, business center, customer service center, Jusita for data hosting, Aoxiang for physical retail, etc. They are distributed in China Taiwan, customer experience and other business groups. Zhang Yong suggested that these businesses should be integrated to provide services to the outside world.
After the meeting, Peng Xinyu came up with three plans: one is to make overall planning by him, and each BU (business unit) to participate in collaboration; Products and services; third, products, teams, and markets are all integrated into a single business.
Among the three sets of plans, the first is the most conservative and closest to the status quo, the third is the most radical and one-step implementation, and the second is somewhere in between.
In September 2021, when Peng Xinyu took three plans and reported them to Cheng Li, Ali CTO, he thought that Cheng Li would choose the second one.
But Cheng Li chose the third most difficult option. This means that BUs with different goals and their own operations need to be fully integrated, and may even involve changes across business groups.
Two months later, Peng Xinyu reported the plan to Zhang Yong. Zhang Yong used a red pen to divide the whiteboard in two. On the left is “in-domain” and on the right is “out-of-domain”. In the Ali domain, that is, in the Ali business system dominated by Taobao and Tmall, Ali has ten capabilities such as membership, merchandise, marketing, customer service, and business analysis. However, outside the Ali domain, the capabilities they can provide for enterprises are not comprehensive. Discontinuous.
Peng Xinyu’s task is to translate the capabilities within the Ali domain to outside the domain.
It is understood that in fact, in 2019, Zhang Yong and Peng Xinyu had a similar discussion. At that time, Zhang Yong also drew two areas, the left is the Ali system, and the right is the customer’s offline and private domain channels, such as his own App, but does not include other Internet business platforms. In the picture drawn by Zhang Yong in November last year, there are more Douyin e-commerce and Jingdong in the “outside” part.
As a result of discussions at this meeting late last year, the new business should be neutral — multi-platform, multi-cloud; accordingly, it should be an independent company.
The market demand corresponding to Lingyang is that channels are becoming more and more scattered. In order to manage multiple channels, companies often use a variety of SaaS (software as a service) products, with a bunch of service providers standing behind them. But most products can only improve local efficiency. The company has invested a lot, but the problem has not been reduced, or even more.
Alibaba has started to build the data public layer since 2012. In 2015, it started the data middle platform in the overall strategy of large, medium and small front desks, and accumulated a series of capabilities and methods. As the head of the data technology and product department, Peng Xinyu and his The team participated in the whole process together. This department is one of the start-up teams of Lingyang.
In 2017, Alibaba began to rely on Alibaba Cloud to export its middle-end capabilities. But at that time, Ali’s integration was not enough. Zhongtai and Alibaba Cloud are not in the same business group, and Zhongtai belongs to the CTO line. At that time, there was a lack of an organization within Ali that could mobilize all the corporate service resources of the group – this is the reason for the establishment of Lingyang. From the perspective of positioning and goals, Lingyang not only wants to help companies do business in Ali, but also wants to help companies do business in other places, including competing platforms.
Teams do addition, products do subtraction
Zhang Yong said that business design and organizational design are two inescapable responsibilities of the No. 1 company. The former deals with what products to provide to whom and what value to achieve; the latter deals with internal organizational structures and collaboration methods.
Peng Xinyu’s idea is to have a total score, first pull the team together, then sort out strategies and products in sections and blocks, and then form an organizational structure based on this.
In terms of organization and mechanism, Lingyang has been given a lot of flexibility. In mid-December last year, Peng Xinyu received an active inquiry from Ali’s CCO & CRO line (responsible for customer experience and risk control) that they have a team working on the commercialization of customer service and supply chain services, which can make Lingyang’s business chain more complete, Are you considering taking it?
Before that, Lingyang’s team integration only involved the CTO line, and Peng Xinyu was not sure whether changes across business groups could take place. But in the second week, Cheng Li told Peng Xinyu that the president’s meeting had decided that the commercialization teams of CRO and CCO would be integrated into Lingyang.
By the end of last year, the Lingyang team had grown from more than 200 people at the beginning to more than 400 people. In addition to the data middle-office team brought by Peng Xinyu, there are also the business middle-office team, the commercialization team of the supply chain, and the commercialized product team of the CCO line.
In January and February of this year, Lingyang held an intensive product co-creation meeting to list all the products in the hands of each team. There are 59 products large and small, and some Peng Xinyu have never heard of it before.
This is the product of Ali’s horse racing-style development in the past: after having an idea, “run out first and then talk about it”. Horse racing activates the team, but also leads to a dispersion of power. Take these product lists out and you won’t necessarily be able to compete with third-party companies in the market that specialize in them. And their corresponding needs are big and small, some are true and some are false, not every direction is worth doing. It is also difficult for enterprise customers to obtain a comprehensive improvement by purchasing only a single product.
Peng Xinyu has cut down 59 products with low thresholds and Ali can’t make an advantageous direction, such as helping customers build websites and apps.
Products that are not in the core direction of Lingyang have also been adjusted. There used to be a team of more than 30 people in the Lingyang team, which is engaged in the business of preventing capital loss in offline shopping malls, which can prevent customers from underpaying or missing payments. The number of large supermarkets and supermarkets in the country is limited, and preventing capital losses is not the core issue in their operations. This team was later transferred to Ali’s supermarket business.
After about two months of discussions, around May this year, 59 products were screened and integrated into 11 products, which together formed “5 clouds”, which ran through the core link of an enterprise’s multi-platform operation.
Directly supporting the business are the analytics cloud, marketing cloud, production and sales cloud, and customer service cloud. Analytics Cloud helps companies gain insight into themselves, customers and industry trends; Marketing Cloud helps companies manage membership, marketing and promotions on different platforms; Production and Marketing Cloud helps companies manage and operate multi-platform orders, inventory and fulfillment; Customer Service Cloud provides intelligent customer service and experience management.
In addition, the development cloud is at the basic layer, meeting the development demands of enterprises and helping enterprises build their own data systems.
After the adjustment of products and services was clear, Lingyang designed the corresponding organizational structure.
At present, each of the five clouds of Lingyang has a person in charge, who is in charge of development and products, and each person also acts as a channel, such as Alibaba Cloud and Tmall. The organization’s integration idea is that products, services, and sales must be integrated, otherwise, you will not know who to sell the product to, and the product will lag.
Lingyang currently does not have its own full-time sales team. When selling standardized products to small and medium-sized customers, sales are mostly done through automated processes. Alibaba’s existing platforms or enterprise service products such as Tmall, Taobao, and DingTalk are the main channels for Lingyang to reach potential customers.
When selling more complex products and services to large customers, Alibaba Cloud is one of the important channels for Lingyang, and the front-end sales function is undertaken by Alibaba Cloud Sales.
reopening
Lingyang ultimately hopes to help companies achieve data-driven growth, and defines a new term for this, DaaS (Data intelligence as a Service).
Peng Xinyu explained that, whether it is ERP (Enterprise Resource Planning) or CRM (Customer Relationship Management), most SaaS products and services solve the problem of efficiency, while DaaS is to seek growth and help customers enhance business value.
DaaS does not aim to collect or obtain customer data, nor does it mean that Lingyang will use the data in the Ali system to serve external customers.
In the past 5 years, companies in non-Internet industries such as consumption, real estate, and finance have also tried to introduce data center and business center, with huge investment, but the feedback from some companies is not good.
After 2017, Peng Xinyu also found that the same products and services can be used internally by Ali, but external customers will complain.
The difference is that Ali has a variety of systems and products that cooperate with Zhongtai, which together form an overall solution, and each business department of Ali has data and technical teams to ensure that Zhongtai products can be really used. However, most of the products purchased by customers are only for local problems, and there is a lack of talents in the customer’s organization who can use and maintain the digital system, which makes the time when the system is delivered, it becomes the time for customer complaints.
Based on these insights, when Lingyang now serves major customers, it will conduct comprehensive consultation on the customer’s organization and business, provide a complete solution with a set of logical and clear products, and finally, together with partners, cultivate data that can master Lingyang’s products and services Talents to ensure that the product can be used continuously.
For some small and medium-sized businesses that only do business within the Ali system, Lingyang provides standardized products. Last year, there were about 80,000 newly registered merchants on Tmall, and most of them had no previous experience in opening a store. Tmall and Taobao will become important channels for Lingyang to reach small and medium-sized customers and provide them with highly standardized SaaS products.
Peng Xinyu told LatePost that in the next 3 to 6 months, Lingyang’s main business goal is to gain a certain number of customers with the new products of “5 Clouds”.
Ali, who wants to help other companies grow, is now growing slower and more difficult. At a time when traffic has become diversified and fragmented, Ali’s e-commerce share has been declining.
On the one hand, Ali wants to continue to maintain its own share through new products such as Taote, on the other hand, it is also accepting the reality and using the new business of Lingyang to meet the needs of enterprises operating on multiple platforms.
In the process of promoting the formation of Lingyang, Alibaba’s management chose a more radical and highly integrated solution, and chose a multi-platform and multi-cloud positioning.
China’s Internet has developed for more than 20 years, from open to closed, active or passive, and now it is re-opening, which is the general trend.
This article is reprinted from: https://www.latepost.com/news/dj_detail?id=1203
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