takeaways from alibaba computing conference …...senior management from alibaba and its strategic...

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April5,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Takeaways from Alibaba Computing Conference 2017 in Shenzhen Part 1

TheFungGlobalRetail&TechnologyteamattendedtheAlibabaComputingConference2017inShenzhen.Theeventfeaturedcloseto100speakers,includingseniormanagementfromAlibabaanditsstrategicpartners.Inthisfirstofatwo-partreport,weoutlineourkeytakeawaysfromthetwo-dayevent.

1) HCItechnology:Alibabaisattheforefrontofhuman-computerinteraction(HCI)businessproducts,inourview.TheAI-poweredHCIapplicationsareabletodealwithhigh-volumecustomerrequestsandcanfacilitatebusinessdecisionmaking.ExamplesincludeAliMeandDianxiaomi,whichwaslaunchedtohelpsellersautomatecustomerserviceonTaobaoandTmall.

2) Healthindustry:TechnologicalinnovationisneededtosolvethemedicalresourceimbalanceintheChinesehealthcareindustry.WebelievetheindustrywillbenefitfromthetechnologyproductsgeneratedbythepartnershipbetweenAliCloud,thecloudcomputingarmofAlibabaGroup,andIntelononeofAsia’sleadingcloudplatformsfocusingonprecisionmedicine.

3) Onlinevideomarket:TheonlinevideomarketinChinahasbeenimpactedbytheshiftfromPCtomobileandtheincreasingwillingnessofuserstopayforcontent.AlibabaCloudissupportingthetechnologicaltransformationintheonlinevideoindustryandAlibaba-ownedYoukuTudouisamongtheleaders.

AlibabaComputingConference2017WeattendedtheAlibabaComputingConference2017inShenzhen,whichfeaturedcloseto100speakers,includingseniormanagementfromAlibabaanditsstrategicpartners.Topicscoveredattheconferenceincludedtheapplicationsofartificialintelligence(AI)andhuman-computerinteraction(HCI)technologies,theecosystemofAlibabaCloud(AliCloud)andtrendsinareassuchasthesharingeconomyandonlinevideo.Inthisfirstofatwo-partreport,wecover:1)HCIanditsbusinessapplications;2)technologyinnovationsinthehealthindustry;and3)recenttrendsintheonlinevideoindustry.

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April5,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

TechnologicalBreakthroughsinHCIAlibabahasmadeseveralbreakthroughsinthefieldofhuman-computerinteraction(HCI)technology.Thisyear’seventfeaturedareal-timetranscriptsystemwhichdisplayedthetextofthevariousspeechesonscreen,showcasingthecapacityofAlibaba’sautomaticspeechrecognition(ASR)technology.TheASRtechnologyusesanalgorithmthatbalancesspeedandaccuracy.Itsmaturetexttospeech(TTS)technologycanalsoproducevoicesthatarecustomizedtodifferentcontexts.TheconferencefeaturedTTSdemoswithsamplevoicesthatareusedfornewsreportingandstorytellingtochildren.

Dr.MinChu,DirectorofDataApplication&Service,AlibabaCloudComputing,spokeabouttheprogressAlibabahasachievedinthepasttwoyears,thankstothegroup’scapabilitiesinmachinelearninganditscomputingcapacity,whichwouldhavetakenmorethan20yearsusingtraditionalresearchinfrastructure.

TheHuman-ComputerInteraction(HCI)EcosystemDr.ChuintroducedtheHCItechnologyandprovidedanoverviewofitsecosystem:

1. Portals:

• DevicesconnectedbyYunOS(theoperatingsystemdevelopedbyAliCloud):Cellphones,automobiles,onlineTV,smartwearables

• Apps:Alipay,UCWeb,Autonavi

2. Coretechnologyandcontent:Automaticspeechrecognition(ASR),naturallanguageunderstanding(NLU),dialoguemanagement(DM),naturallanguagegeneration(NLG)andtexttospeech(TTS).

3. Infrastructure:Deeplearning,computingcapacity

Figure1.BasicTechnicalFlowofHCI

Source:Alibaba/FungGlobalRetail&Technology

DM

ASR

TTS

Human

NLG

NLU

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April5,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

VariousBusinessApplicationsofHCITheHCItechnologyisembeddedinproductofferingswithintheAlibabaecosystem.TheAI-poweredapplicationscandealwithhigh-volumecustomerrequestsandfacilitatebusinessdecisionmaking.Questionsaboutdeliveryandinventorystatusthatarechallengingforhumancustomerservicecanbeansweredinsecondsbybigdata,andwithhigheraccuracy.

1) AutomaticCustomerService:AliMeAliMeisanAI-customerserviceplatformembeddedinTaobaoMobile.TheappwaslaunchedinApril2016andtodate,hasapproximately3milliondailyactiveusers(DAU).AliMesupportsfourprimaryfunctions:

1. BasicQ&A:Theuserinterfacelistsoutfrequently-askedquestions.Userscanreadtheanswersbyselectingthequestionstheyareinterestedin.

2. Transactioninformationenquiries:CustomerscanenquireaboutinformationonaspecifictransactionintheirTaobaoaccountbytypingorspeakingtheirquestionstotheChatbot.Informationthatcanbeprovidedbythechatbotincludesanitem’slocation,deliverystatusandrefundprogress,allpoweredbyAlibaba’sbigdatatechnology.

3. Shoppingguides:ThechatbotcanhelpcustomersfindtheproductstheywantthroughaseriesofHCIactions.Userscaninputbytext,voiceoraphotodescriptionofaspecificproduct,andthesystemwillreturnalistofrecommendations.Userscannarrowtherangeoftheresultthroughmorespecificfilters,suchasbrand,color,gender,etc.Duringademosessionattheconference,thespeakerdemonstratedhowcustomerscanfindanexactproductwithin30secondsoftalkingtothechatbot.

4. Dailylifeassistance:Usingtheapp,userscanreceiveinformationonweather,traffic,booktickets,aswellasassistancewithothertypesofrequests.Webelievethisfunctionhasthepotentialtoincreaseuserengagement.

Figure2.AliMeUserInterface

Source:alixiaomi.com

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April5,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

2) AIforBusiness:DianxiaomiDianxiaomiisthefirstAIproductthatAlibabalaunchedforbusinessusersonTaobaoandTmall.Afreetrialversionwasopenforapplicationduringtheconference,andtheofficialversionwillbelaunchedinJune2017.

DianxiaomiisdesignedtohelpsellersonTaobaoautomatetheirservices,increasetheconversionrate,reducecostsandhandlehigh-volumesalesactivitysuchasthe“Singles’DaySale.”Theappisbasedonmachine-learningtechnologythatcanautomaticallydealwithcustomerrequests.Theappisabletocover70%oftherequestvolumewithover90%accuracy.

Figure3.DianxiaomiUserInterface

Source:FungGlobalRetail&Technology

3) ApplicationsofAIintheHealthcareIndustryAlibabaCloudETsupportsinnovationinthehealthcareindustry,largelypoweredbyaseriesofpartnershipprojectswithIntel.ThehealthcareindustryinChinaisdrivingincreasingdemandfortechnologicalinnovationtodealwiththeproblemscausedbytheagingpopulationandthesupply-demandimbalanceintheallocationofmedicalresources.TogetherwithIntelandBFI(BeijingGenomicsInstitute),thelargestgenomicsresearchcenterintheworld,AliCloudlaunchedaprecisionhealthcareplatformwhichcontainsover170applicationsand170TBofgenedata,high-accuracyultrasoundrobotsandanintelligentmedicallabinZhejiangprovince.

Figure4.EightNewTechnologicalInnovationsintheMedicalIndustry

Source:PwC2017HealthIndustryTrendReport

AI

RemoteMedicine

MedicalRobots

VR

3DPrinting

NewGenetest

IoT

DigitalSupplyChain

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April5,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

OnlineVideoBelow,wesummarizethekeypointsoncurrenttrendsandtheoutlookforChina’sonlinevideomarketthatweresharedattheconference.

• ThemobilevideomarkethasbecomeamajormarketinChina.Thepenetrationrateofmobilevideohasincreasedto92%inthepastfouryearsfrom57%in2013.Withtherapidexpansionoftheonlinevideomarket,onlinevideoadvertisingismoreimportantthaneverforthemarketingandadvertisingindustry.China’sonlinevideoadvertisingindustryisestimatedtoreach¥68.3billionby2019,from¥35.5billioncurrently,ofwhichmobilevideoadvertisingmakesupover80%.

• Furthermore,users’willingnesstopayforcontentandserviceshasbecomestrongerthanever.Thenumberofpayingusersononlinevideoplatformsdoubledto6.1millionin2016from2.9millionin2015,andisprojectedtoreach100millionin2019,accordingtoanalysis.Therevenuefrompaidcontentandservicesisalsoprojectedtoreach¥15.1billionin2017and¥23.4billionin2019.

• Theonlinevideomarketisdominatedbyseveralleadingapps.InJanuary2017,thetopthreeonlinevideoappshadover100millionmonthlyactiveusers(MAU):iQIYwith244.6million(MAU),TencentVideo2with231.2millionandAlibaba-ownedYoukuTudouwith152.9millionMAU.

ConclusionWeareconvincedthatAlibabaisattheforefrontofthedevelopmentofHCItechnologyanditsbusinessapplications.However,itcouldtakemonthsoryearsforsomeofthemoreadvancedHCItechnologiesthatweredemonstratedattheconferencetomatureandreachthemassmarket,duetotherelativelyhighdevelopmentcostsandsophisticatedhardwarewhichtheyrequire.

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April5,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comEsmePauAnalystZaneYangResearchAssistantHONGKONG:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406LONDON:242–246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NEWYORK:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017

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