Olivia, really interesting to get a sneak peek into the backend of the behemoth Alibaba! I also echo Spencer’s comment above and wonder why they have chosen to retain a fragmented logistics model especially when companies like Amazon has begun owning more stages of the shipping journey and handles same-day delivery service through its own fleet of leased cargo jet carriers, cutting out any third-party shippers. Especially since Alibaba actually has an entire logistics arm that they launched in 2013 called the Cainiao Network, of which Alibaba owns a 47% stake in. The acquisition and its integration into the Alibaba business has always been opaque but it would be logical to leverage its capabilities more and eventually, transition into bring all their logistics in-house. Cainiao seems like an incredibly complimentary business model since their business proposition is centered around streamlining China’s fragmented package delivery system using data and digital intelligence. Cainiao’s expansive warehouse and delivery footprint is also a plus since Alibaba does not hold their own inventory. Lastly, Cainiao’s goal of building a global network is aligned with Alibaba’s interest in growing its retail network beyond China.
( See : https://techcrunch.com/2016/03/14/alibaba-backed-logistics-firm-cainiao-lands-funding-at-a-reported-7-7b-valuation/ )
I also wonder if there is an opportunity to simplify Alibaba’s logistics network by offering more in-store pick up options or locker pick up options perhaps.
Shilpa, this is a great post on how a simple idea can be scaled and monetized effectively in the world of digital. To further build this business, my recommendations would be to harness the loyal and passionate digital communities that she has already built to develop an ecosystem of products and services around her brand name. Kayla could look into starting her own line of athletic wear and sports accessories and as the success of Lulu Lemon proves, this can be an incredibly lucrative space. This can also easily be integrated into her existing digital channels, offering purchases in-app or on her social media channels. I also think that she should begin to offer more rich content beyond just the exercises and perhaps create a more holistic ecosystem around fitness, foraying into content and conversation on diet, beauty and active lifestyles. Lastly, in like vein to a lot of the above comments, to create more of an offline following to complement her online fanbase and create an additional revenue stream, it would be interesting to partner with gyms and exercise studios and license her fitness program to them so that they can begin to offer her exercise classes as part of their suite.
Hey Carl – very interesting post. While I understand a lot of the concerns posted above, I do think UPS’s move into this space has potential, given how much flux there is in this landscape and how important it is to continue to experiment, learn and reinvent with emerging technologies that could transform their traditional business model. UPS has a culture that encourages this, as demonstrated by their investment in the drone-maker CyPhy Works. In fact, competitors like DHL are also looking into this space to reform their supply chain with on-demand printing of parts and contends the view that 3D printers will be commonplace consumer goods in the medium term. Instead, they acknowledge the opportunity for logistics companies to provide that last-mile service and incorporate 3D-printing of parts at scale for small to medium manufacturers.
(See : http://www.dhl-usa.com/content/dam/downloads/g0/logistics/green_logistics_sustainable_logistics_study_en.pdf)
Positioning this endeavor with SAP is great, there is probably no better enterprise supply chain partner with the expertise, scale and reach of SAP and that in itself already gives them a massive edge to attract the right kind of customers and embed their services better. The only recommendation would be to perhaps use Singapore as a pilot hub and test-drive this business model with a few chosen clients and industries first to understand what the opportunities, limitations and constraints are in this space before undertaking significant investments.
Aparna, as an avid user of Go-Jek every time I’m back home in Jakarta, this was an especially interesting read. Go-Jek set itself apart not just by transforming a traditional transportation construct, but by rapidly developing an entire ecosystem of services surrounding it. In fact, Go-Jek transformed not just the transportation landscape in Jakarta but through services like Go-Clean, Go-Massage and Go-Mart, it also digitized other traditional spaces such as the domestic worker services and the grocery market services, offering better quality, governance and efficiency in areas that were previously completely offline, unsupervised and fragmented. The premise was simple – everything that could be done faster, better and cheaper on a motorcycle, leveraging their existing logistics network was built in as a service offering.
The main challenge for Go-Jek going forward will be competition, geographical expansion and changing urban landscapes. Regarding competition, several leading players like GrabBike and UberBike are already available in Jakarta now, competing head on with Go-Jek, with very little service differentiation. Holding its own against the newcomers will be a tricky challenge for Go-Jek. Secondly, Go-Jek’s stronghold today is Jakarta, expanding into other parts of the far-flung archipelago will be critical if Go-Jek wants to continue to scale and grow as Jakarta will soon be saturated. This is a compelling opportunity as one can argue that there are parts of Indonesia that will greatly benefit from having a robust transportation, delivery and service network but it will also be the ultimate test as to whether Go-Jek’s ecosystem is a repeatable and scalable model that will thrive equally well outside the capital and big cities. Thirdly, Indonesia’s public transportation landscape is changing rapidly. Go-Jek sustains itself partly due to the high congestion on the roads, with many people turning to motorcycles that meander painlessly through the long traffic jams. Already with initiatives such as TransJakarta and the new train network, demand for Go-Jek’s may organically decline. Go-Jek needs to continue to innovate and reinvent itself in a rapidly developing urban landscape that is beginning to offer a lot more choices to the public.
This was an incredibly interesting read on how technology, particularly data-based personalisation is revolutionising the outdated education model. Having said that, I do share most of your concerns as well, AltVideo especially seems to be an extreme and intrusive foray into the integrity of the learning experience and I would definitely caution on finding the right balance on leveraging digital to improve the classroom experience without transgressing on students’ privacy, psychological safety and security.
To scale their business model sustainability, I do think packaging and white-labelling their software as an enterprise product offering for other schools and institutions is key.
Moreover, remote technology enabled education is an area that a lot of emerging markets are investing in in order to bridge the wide infrastructure, resource and skills gap prevalent in the region and offer students in unprivileged areas an equal opportunity in attaining a good education. If packaged appropriately, the software and the model will have a keen audience in markets like India, Vietnam and Indonesia who are trying to transform their education sectors through greater adoption of technology.
Really interesting to see how one of the world’s largest fisheries cooperation is tackling the impact of climate change to its operations. Nissui’s strategy of vertical integration, research and diversification is a solid one, but admittedly this is a steep challenge to solve.
Having read the post and the comments, I wonder if Nissui is undertaking any consumer awareness initiatives to better educate the average Japanese consumer as to the impact of climate change and the effects of overconsumption, perhaps that might make them more receptive to farmed fish? Nissui can also potentially invest more in marine research and undertake fish stock rebuilding programs for their main catches, which is basically an effort to redevelop fish populations deemed at risk, back to their original population level so that fishing can continue sustainably. Something more extreme perhaps, but another interesting area of research that some developing countries are looking into is the creation biofuel with fish waste.
I also wonder if there is a role for more policy and governance in this matter. Fishing fleet overcapacity is one of the main drivers for wasteful overfishing across the world. There a few countries that have adopted a limit system called Individual Fishing Quota which caps the specific amount of fish that people were allowed to catch. This has been implemented in a few countries including New Zealand, Norway, Canada, and the United States, where it has successfully helped in fishing industries by reducing overfishing and mitigating climate change impacts on a broader scale.
Kutamani sounds like a great initiative and I completely agree that often, in the race to find solutions, the world tends to unanimously look towards the Western governments or behemoth corporate organizations to provide the answers, overlooking the magnitude of everyday innovation originating from some of the most affected areas and communities of the world. It is great that Kutamani is planning to harness that potential to try and address the effects of climate change at a grassroots level and thereby uplifting and empowering these communities further. I just have a couple of high level thoughts.
The foremost is on reverse innovation, which is a concept I have been intrigued by since I first read about it in an HBR article. Reverse innovation is basically the scaling of products and services developed in the emerging economies first and then reversing them for the industralised, developed world to generate monetary profit, which in turn then continues to fuel a positive cyclic influence on funding more innovation from the emerging markets. Reverse innovation allows for the unique economic, social and technological limitations of the underdeveloped world to be taken into consideration while innovating for products and services, which makes them more effective to serve in these contexts rather than something developed originally in the first world. Communities who are most vulnerable to climate change may potentially have the most innovative solutions for it, and while Kutamani is already doing a great job harnessing these, I wonder if you can go further and reverse innovate these solutions for other parts of the world, achieving scale, widespread adoption and even more global awareness.
Also, I would stress further on the importance of partnerships. As governments and corporates begin to expand their sustainability strategy, they are looking for creative and strategic ways to reliably bring about tangible change on the ground and often are looking for a growing breed of NGO’s, charities and other non-profit organizations to partner with in order to implement their strategies at grassroots level. Increasing awareness on Kutamani and reaching out to organizations that are also targeting the same underprivileged communities that you operate in could definitely provide new avenues for financial support, collaboration and scale. I do understand the sensitivity around picking the right organizations that are aligned to your core values as a company, but I do believe this sweet spot exists and if executed well, it could be a game-changer in expanding Kutamani’s mission.
This was an incredibly interesting read as I was not aware of the extent to which Airtel was investing in sustainability as part of its strategy. Their approach towards integrating sustainability into their core business model looks to be very well executed and covers not only the reduction of the carbon footprint within their own value chain but also extends to supporting and empowering the communities that they serve to better adapt to climate change, which is a key differentiator. Airtel’s programs around farmer empowerment and using mobile technology to deliver real-time weather, farming knowledge or natural disaster alerts to rural consumers, allowing them to adapt to and succesfully mitigate the risks of climate change is exemplary.
Something additional that I found incredibly interesting about Airtel’s sustainability strategy was also their adoption of digital avenues to further cut down dependency on natural resources such as paper. In emerging markets, mobile phone telecommunications is still a paper-heavy business with all bills for post-paid users or the recharge vouchers for pre-paid users still being physical. Through the recent years, Airtel has converted a large cross section of their consumers to paperless billing and through that, saved close to 700 mn sheets of paper. They are also constantly looking to innovate in terms of product design and have teams looking into reducing packaging costs by altering SIM sizes to reduce the amount of plastic required or finding digital replacements for the recharge vouchers. They have also been looking into e-waste management, by collecting, re-using and re-cycling their used hardware and donating them to underprivileged schools they that help support. While these are probably small steps compared to the larger initiatives they are undertaking which you highlight above, I feel like Airtel’s sustainability is a multi-faceted one, that seems to have considered and included all aspects of their value chain and the lives of the consumers that they touch and will prove to be a strategic completive advantage to their growth as a company.
I do agree that Unilever has scope to do a lot more in the palm oil sustainability space. Having said that, Unilever was one of the first-movers to address the issue of palm oil deforestation in the South East Asia region and have made significant strides, encouraging a lot of consumer goods companies and the industry at large to follow suit but the uphill battle is a long, arduous one. A couple of comments I wanted to add on with are below.
I do agree that the GreenPalm certificates are probably the least efficient of the steps undertaken so far and do not do much to address the root issues. I found the above graphic on the palm oil supply chain system incredibly interesting, it showed me how very opaque, multi-faceted and complex the current landscape is. In fact, the foremost roadblock in trying to implement sustainable practices is this lack of traceability in the supply chain. Using technology to deliver traceability is one of Unilever’s main goals in addressing this issue and I think this is the key game-changer in this puzzle. Unilever has partnered with traceability systems experts FoodReg to develop the KnownSources tool, which allows for a consistent means of reporting traceability and origin of supply. This will allow companies like Unilever to trace back all its palm oil right back to the source farm and the mills, allowing them to then ensure that their entire supply chain is sustainable by 2020. Unilever started using the system in 2014 and 58% of their palm oil is now traceable to mills, but they need to continue this effort to ensure they have 100% visibility. Interestingly, KnownSources also incorporates a functionality that allows for the sharing of traceability information between inter-connected companies within a specific supply chain, enabling the creation of networks where traceability data is shared with the industry, reducing the duplication of individual companies each identifying their own supply chains, so the impact to the region and the companies operating within it will be huge. I would love to see Unilever invest more in this space and leverage more software technology in clearing the fog within their supply chain and achieve complete traceability of their palm oil.
Another area that I think Unilever needs to invest more in is its smallholder farms strategy. President Joko Widodo of Indonesia recently issued a moratorium on new land being used for plantations and instead asked the existing plantations to increase productivity and double yield, something they claim is possible with new types of seeds. While this is an impressive step forward, it does pose questions to what role governments and organizations can play to support plantation owners, especially smallholder farms, to make this transition through better financial support, training and technology so as to improve their productivity. Maybe Unilever’s own plantation can pioneer some of the scientific and technological innovations that enable a higher palm oil yield and embed the collective intelligence across the region?
It is really reassuring to see such a wide scale collaboration between NGO’s, private and public institutions coming together to address this issue and wholeheartedly agree that more of such partnerships across the supply chain is key for impact. Mars Inc in fact has already started implementing two of your above mentioned key recommendations – undertaking genetic research to build climate resistant cocoa with IBM and the US govt and equipping farmers with training on agricultural best practices through a footprint of Cocoa Development Centers they have built across their key sourcing regions all with the intention of improving yield on existing farmland. See below link.
They claim that this will help them to increase current yield by three times in the next 3-5 years, something we will have to wait to see proven, but if successful, it would significantly mitigate the threat climate change poses to Mars’s supply of cocoa.
I think you bring up a very interesting point around the same fate also meeting several of Mars’s other key product ingredients such as almonds, which makes me think about how relevant some of these things are across their broader supply chain and if there is scope for more standardization of approaches towards agricultural sustainability at large and finding better efficiencies and large-scale impact though that, rather than funding research or providing training on individual crops in isolation.