What is a good objective in Alibaba?

Curated by Alibaba Global Initiatives
Editor: Chandee Zhuang

Common ground of good objective

1. It should represent clear and sustainable customer values.
2. It should have a strong sense of direction: the objective is not only about a number, but you need to depict as clearly as possible the route to get to the destination, and it should clarify in which point we should put effort.
3. It should be focused and penetrative: that whether you can accurately get to the destination relies on the great savvy into the customer values and market environment, and the strong ability to identify the essence of business.
4. It should be specific and clear: it should be easy to understand and remember.
5. It should be challenging but reasonable, which means, it should not be easy but it is reachable if people work harder, so that it will inspire morale and innovation in the team.

Case studies of good objective

Alipay’s objective: Improve payment success rate

In the history of Ant Group’s (parent company of Alipay) development, what impresses me most is the “improve payment success rate”, which is the objective we set in 2010. In the years 2008 and 2009, we were in a very fierce competition. Alipay had no any advantage in the market outside of Taobao platform. So in 2009, we initiated a “customer experience year” in the company with the purpose of improving customer experience. But we did it in general. After a 1-year effort, there are still a lot of users complaining. At the beginning of the 2010 annual meeting, we played a recording of users’ criticism of us, and Jack Ma also criticized us. He said that someone told him “if there are alternatives, I will not use Alipay”. We also felt very upset and had no sense of achievement. The reason was that we hadn’t felt any change in users’ feelings about us after doing it for a year.

Later, when Lucy Peng became CEO, she talked to everyone about what kind of goal we should set? She reviewed all the problems in the user experience, and found that the unsuccessful payment was the most complained about by users. At that time, Alipay’s overall payment success rate was only about 60%-62%, which meant that 100 people paid for it, 40 of them failed, and the experience for consumers was very bad. She said, can we just focus on this point and break it through, that is, to “improve the success rate of payment”.

After setting the objective, we had to think about how to solve it. It depended on what is the reason for payment failure? At that time, there was a core problem. Alipay was more like a gateway. The last part of your payment was to be paid to the bank’s system. In this case, how can we change it on our side? During that time, we held various meetings to discuss and study. Finally, we made the “express payment” and improved the payment success rate from 62% to 90-95%. And the users could strongly feel the difference.

Lucy immediately targeted the “success rate of payment” and set a very clear goal. Everyone around this direction solved the most critical problem of Alipay at that stage. Looking back today, it is a very good objective.

Tmall’s objective: Create 3 certainties

Mobile Taobao’s objective: enjoy shopping

2012 was the first year when we changed Taobao Mall to Tmall. Since it was renamed, what should Tmall do? When Daniel Zhang, current Chairman & CEO of Alibaba Group, set the goal, he said, “Tmall is a mall, which means we want to build a city of quality.” In that year, Daniel set three very clear goals: the overall goal is called “certainty”. The “certainty” is divided into three things: first, commodity certainty; Second, price certainty; Third, service certainty. Focusing on these three “certainties”, we started to build the fundamental commodity pool of Tmall and spent many years building the basic support of the whole service. It can be considered that the Tmall quality city started with the goal of “certainty”.

From the end of 2013 to the beginning of 2014, we were deciding what the goal of mobile Taobao was. It was just simple - enjoy shopping, which was the core goal. At that time, the mobile Taobao team began to have a lot of brain storms. Everyone thought about how to help users enjoy shopping, have fun and spend more time on mobile Taobao, and then we began to develop different products. At that time, there were many interesting projects, “guess you like” (a recommendation shopping mechanism) was done in this background.

Freshippo’s objective: GMV online proportion

I think the most important thing for Alibaba to set goals is that you should have results, but you should have direction at the same time.

For example, there are too many ways to achieve GMV. You can take a marketing campaign and complete it. Is this direction right? We are looking at longer-term development, and directional goals are particularly important.

Therefore, setting goals should be combined with phased development. When you set goals, you must think about these two points: what stage are you in and what point do you need to break through most now? Can this point lead to a good result and correct direction?

What impressed me was the objective of the Freshippo. What Freshippo does is to digitize physical retail. Traditional physical retails care about surface efficiency, which means how much GMV per square metre. But what should be the objective required for digitization? So when Hou Yi, the CEO of Freshippo, put forward the surface efficiency as the objective, Daniel refused, he added a goal, which is 30% of GMV must come from online in that year. This is very classic. The digitization of physical retail itself is the connection between offline and online. It is a direction. The surface efficiency cannot be limited to physical stores per se. You must have a proportion of online retail. This is the directional goal.