Element 2.

Data Driven
 Data driven
Key Knowledge Points
Data driven
Data is considered as the new oil. Big data enables companies to create new products and services,
enhance existing ones. The application of big data within different industries leads to the emergence of
new business models.
The value-creation mechanisms of data analytics, which include using data analytics to:
① Gain insights (knowledge creation): Data analytics are the technical means to extract insights and the
empowering tools to better understand, influence or control the data objects of these insights (e.g.
natural phenomena, social systems, individuals).
② Automate decision-making (decision automation): Data analytics (through machine learning
algorithms) empower autonomous machines and systems that are able to learn from data of previous
situations and to autonomously make decisions based on the analysis of these data. These
autonomous machines and systems are getting more and more powerful as they can perform an
increasing number of tasks that required human intervention in the past.
 2.3 Data Driven

In traditional economics, three “factors of production” are the

ingredients that go into creating value in society:

capital

labour

land
Data is the new oil/gold/currency (capital)

The most common analogy or assumption is the

idea that data is a new asset. Whether it is
something to be collected, accumulated, mined,
traded or exploited, the general assumption is that
ownership or control of data bestows economic
wealth on the holder.
——World Economic Forum, 2018
 No data, no intelligence!
No intelligence, no business!

Smart Business:
Data Intelligence + Network Collaboration
Data is an objective mapping of the
physical world in virtual space!
2.3 Data Driven

Big data defined

“Big Data” refers to datasets whose size is beyond the

ability of typical database software tools to capture, store,
manage and analyze."
We don't define big data in terms of being larger than a certain
number of terabytes - as technology advances over time, we
assume that the size of datasets that qualify as big data will
also increase.
What qualifies as big data can also vary by sector, depending
"Big data" is high-volume, -velocity and
on what kind of software tools are commonly available and
-variety information assets that demand cost-
what sizes of datasets are common in a particular industry. effective, innovative forms of information
Even today, it can range from a few dozen terabytes to multiple processing for enhanced insight and decision
petabytes. making.
2.3 Data Driven

The Vs of big data

Volume
The amount of data matters. With big data, you’ll have to process high volumes of low-density, unstructured data. This can be data of
unknown value, such as Twitter data feeds, clickstreams on a webpage or a mobile app, or sensor-enabled equipment. For some
organizations, this might be tens of terabytes of data. For others, it may be hundreds of petabytes.
Velocity
Velocity is the fast rate at which data is received and (perhaps) acted on. Normally, the highest velocity of data streams directly into
memory versus being written to disk. Some internet-enabled smart products operate in real time or near real time and will require real-
time evaluation and action.
Variety
Variety refers to the many types of data that are available. Traditional data types were structured and fit neatly in a relational
database. With the rise of big data, data comes in new unstructured data types. Unstructured and semi-structured data types, such as
text, audio, and video require additional preprocessing to derive meaning and support metadata.
—— Oracle, What is big data?
 2.3 Data Driven

Data to value creation

• E-commerce gives ability to collect data for the data value chain
• Data can be used to operate the e-commerce site, sell advertisement, support the logistics and payment
etc.
 2.3 Data Driven
Big data application
Big Data in Retail
Provide retail clients:
Overall user behavior extraction/ accurate target client
profiles positioning/ consumption preference/ region
distribution/ marketing analysis etc.
Big Data in Logistics
Big data application in logistics company: market
prediction/ warehouse venue selection/delivery route
optimization/ warehouse inventory optimization
Big Data in
Transportation
Generate insights into various factors for traffic:
Real-time collection/storage/analysis classification/ inquiry/
accurate analysis / forecast of traffic condition.
Big Data in Finance
Based on big data analysis, more intelligent business
decisions could be made for financial companies, such as
Internal data integrity, security and external client risk
control.
Big Data in Education
Value mining of various student databases to find the
intrinsic links between students' various behaviors, and
make appropriate teaching decisions
Big Data in Meteorology
A large number of meteorological data is monitored by
meteorological departments, using big data analysis
methods to carry out in-depth excavation, forming more
accurate weather forecast related service products in
meteorological disaster prevention and mitigation, public
travel, etc.
Big Data in
Telecommunication
Generate user basic data features and preferences, custom
interest - oriented feature models through user-based data
such as age, gender, terminal, and preference data, predict
customer behavior, and provide user feature descriptions
and interest-oriented content notification
Big data in agriculture, environmental protection, media, tourism,
electricity, energy…
 2.3 Data Driven

Data has changed advertising

Companies used to pay for advertising in magazines, papers or TV

but they would not know who would actually see the ad – they
could only target groups by placing the ad where it was likely to be
seen by the target audience (e.g. in a gardening magazine in in
between a children’s show on TV).

Thanks to data, companies like Google and Facebook can now sell extremely targeted advertising
placements to businesses. A company can ask for their ad only to be shown to men with a specific
interest within a certain demographic.
Traditional magazines and newspapers have lost a lot of advertisement income, and the data driven
advertisement business models are winning
 2.3 Data Driven

Data has changed advertising

Zara’s Flagship store on Tmall
Female consumers’ Male consumers’ “A thousand people,
front page front page a thousand faces”
Alibaba uses the vast store of data it collects from
its 800 million active buyers to generate
personalized storefronts and product pages when
consumers shop on Taobao Marketplace or
Tmall.com.
Merchants are using it to deliver not just product
recommendations based on a visitor’s shopping
history but also individualized virtual-storefront
homepages geared for particular types of shoppers.

Data-driven recommendation engines offer users

products and content tailored to their preferences.
2.3 Data Driven

Data application in smart city solutions

Smart City
The affluent Chinese tech hub of Shenzhen is a city
now hooked on cars. It has 3.4 million vehicles on its
roads on any given day, in a built-up area of 900 square
kilometers.

But a long tailback of cars is becoming a sight hard to

spot even on the city’s main thoroughfares during rush
hours, and what drivers and riders may be unaware of
is that their smooth journeys have everything to do with
an information and communication technology (ICT)
platform capable of crunching 700 million data points
per day.

AI-enabled cameras, installed near traffic lights, can

adjust traffic lights in accordance with queuing vehicles
and weather conditions. Certain road sections in
Shenzhen have seen traffic flow improve by 8%, with
the average vehicle speed surging by 15%.
 2.3 Data Driven

Data application in transportation

Didi
the Chinese
ride-hailing
giant, is looking
for ways to build
up its big data
and artificial
intelligence
capabilities.
 2.3 Data driven

Tmall Innovation Center (TMIC) - the market-research arm of Alibaba

• Data Application in Product Development

Through the Tmall Innovation Center, Alibaba

 Established in 2017, the Tmall Innovation Center shares data like search terms, price performance
(TMIC) is the dedicated retail innovation arm of
and return rates with international retailers. With
this insight, brands can cut down time spent on
Tmall. It showcases Alibaba’s latest service offering
research and development and bring better
to brands: data-driven product development.
products to market, faster. 
 The mission of TMIC is to help brands crunches the
data and shows companies what consumers want
but can't find by using precise market
18 Months 6 Months
analysis, real time consumer insights and
product concept testing.
TMIC can help to reduced the product development
cycle from an average of 18 months to 6 months
 Tmall Innovation Center
TMIC is an illustration of how Alibaba helps brands leverage digital tools, market insights and
analytics to identify their own pain points and come up with the most-effective solution to address
their own challenges. 

Based on Alibaba’s omni-channel consumer data research

Combined with big data analysis and small sample research
Enable brands to position target population
Have insight into market opportunity
Research and develop innovative products
Optimize marketing strategy
 Head & Shoulders: data-driven product development

Tmall Innovation Center – C2B innovation hub

Case study: collaboration with P&G: market insights: an acceleration
in product development
Head & Shoulders, Special shampoo designed for the Chinese market
*Development cycle reduced from 18 mths to 9mths


Market Potential
Market Insights Conceptualization Manufacturing
Evaluation
Traditional product
development: 18mths 4mths 3mths 3mths 8mths
Data-driven product
development: 9mths 7dys 10dys 8dys 8mths
 2.3 Data driven

• Data Application in Product Development

Win-win strategy

Products that come out of the innovation center are sold

exclusively on Tmall for an initial six-month period. In turn,
the customer data — including what people are searching Female-targeted
for, what searches lead to what purchases, return rates Anti-blemish products mouthwash products
and common selling prices for products — is being
shared across the board with sellers. 

Currently, over 60% of the globally well-known launch

their new products on Tmall. In 2018, the number of new
products introduced achieved 50 million.

An interactive Arctic/polar bear-themed gift box

 2.3 Data driven

CASE STUDIES

• Data Application in Product Development

Through TMIC's user analytics of the 700m+ users on their platform,

data showed that Chinese love spicy food and were willing to try
chocolate "with a kick". Mars co-designed a spicy Snickers bar with
TMIC to cater to Chinese consumer tastes.

For two months the product sold exclusively on Tmall and lots of
customer feedback was used to fine tune the recipe, which they
iterated on fairly quickly.

More importantly, they achieved a 92% positive customer review score.

Snickers went from idea to Tmall product in about
After getting this right, Mars then expanded to all other online and
half the time it typically takes for the brand to
offline channels as in their traditional launch strategy, but with strong launch a new product. 
confidence in their product and marketing approach as it had already
been tested.
GDT Case study
Big Luck Big Win? Big Data Big Win!
Boxing Cat Brewery: Fit for Fight with TMIC Data

This case investigates how the Alibaba Tmall Innovation Center uses big
data to empower brands in their product development and innovation.

The approach is far more efficient than traditional market research,

reduces the product development cycle, and is based on actual purchases,
rather than expressed opinions, allowing for more accurate data. Showing
students just how powerful big data can be inspires them to develop
consumer insights from data and adopt an analytic mindset that will help
them succeed in business.
 2.6 Data driven

• Data Application in Product Development

CASE STUDY VIDEO

TMIC & Boxing Cat Brewery

How data empowers AB InBev partnered with TMIC to

make a craft beer tailored specifically for China
 2.3 Data driven

• Data Application in Product Development

CASE STUDIES Boxing cat Brewery

The Boxing Cat team’s normal practice is to make

decisions based on analysis of marketplace trends and
customer behavior. For the new beer they developed in
time for Chinese New Year, however, they utilized
TMIC’s access to big data and data mining capabilities
to set up experiences to collect online and offline
consumer data.

The result: a porter beer with hints of orange and

chocolate.

Boxing Cat Brewery used Budweiser’s first craft beer

production line to produce the 30,000 limited edition
beers that sold out on Tmall during Chinese New Year.
 Tmall innovation Center

Simulation Test

Reach View Click Survey Incentives

(Tmall app/message/Taobao app) (Product Information) (Add to List/Cart/Buy) (keep track of consumer data) (trail products/coupons)
 “A huge mistake brands do is they depend completely on
advertising platforms. If they stop running advertising campaigns,
then they have no revenue. The goal should be to leverage that
data you have obtained to create better content by understing
your customer and thus able to grow organically.”

Roberto Garcia
GET Student Project
 Big Data?
Live Data!
 Complete records instead of sample checks
Real-time data from over 700 million consumers
 Data first, insights later
Correlation instead of causality
 Data enabled decision-making
Enable machines to make decisions directly, not just support human decisions.
 Data Capture+Algorithms+Ready-to-Use

• Data capture: collecting data of specific business scenarios

• Algorithms: algorithms oriented around business logic and its
谷歌
iterative optimization. 滴滴打车
淘宝千人千面
• Ready to use: data as a product
…… ready to use that seamlessly
integrates data intelligence with business scenarios.
 Supporting Materials:

Harvard Business Review, Why Some Platforms Thrive and Others Don't, 2019
https://hbr.org/2019/01/why-some-platforms-thrive-and-others-dont

Harvard Business Review, Alibaba and the Future of Business. Ming Zeng, October 2018
https://hbr.org/2018/09/alibaba-and-the-future-of-business

Smart Business: What Alibaba's Success Reveals about the Future of Strategy, Ming Zeng, 2018

World Economic Forum, Digital Platforms and Ecosystems, 2019

WEF_Digital_Platforms_and_Ecosystems_2019.pdf

World Bank Group - E-commerce Development – Experience from China, 2019

http://documents1.worldbank.org/curated/en/552791574361533437/pdf/E-commerce-Development-Experi
ence-from-China.pdf

AliResearch, Inclusive Growth and E-commerce: China's Experience, 2017

https://i.aliresearch.com/img/20170630/20170630151728.pdf

OECD, Data-driven innovation for growth and well-being, 2014

DATA-DRIVEN INNOVATION FOR GROWTH AND WELL-BEING (oecd.org)

McKinsey & Company; The Age of Analytics Competing in A Data-driven World, December 2016
MGI-The-Age-of-Analytics-Full-report.pdf (mckinsey.com)