Utilizing key C2B trends to help your business evolveChia-Li Chien
Chia-Li Chien, CFP®, PMP® Jan. 04, 2016
Creating value for all stakeholders in a digitally transformative economy
My mom is in her late 70s. I bought her an iPad in 2013. At first, we were concerned about the practical usage due to her lack of technology exposure during her career days. We were so wrong; she used YouTube daily to karaoke with her friends in her favorite Japanese songs. She connected with many families, friends, and past students on Facebook. She felt closer to her grandchildren as she commented on their postings often. She even housed one of my daughter’s friends from U. of Virginia in Taipei mid-2015. The fast pace and ever-changing nature of technology has made all of these adaptations possible for her.
Trend #1: Business Evolution continues
People don’t necessarily resist change. Most people acknowledge that change is the only constant in life. Mr. Slee summarized the evolution of business changes in his latest book, “Time Really Is Money.”  According to Mr. Slee, the business has changed as illustrated in Figure-1. The Industrial Age started in the 19th century and it took 150 years to reach the Information Age. The Computer became the primary enabler during the Information Age. By 1995, the Internet was born; we then moved into the Conceptual Age by 2001. Mr. Slee cited that during the Conceptual Age, globalization, logistics, and advanced technology fueled the speed of doing business. Then, transformations in Intellectual Property led to the Aggregation Age. Finally, in 2015, we’re at the beginning of the Transformation Age.
Mr. Slee also cited one key indicator of the Transformation Age is that participation in “the sharing economy . . . will surpass $335 billion by 2025, with growth exceeding 25% per year.” You may already have contributed to the “sharing economy” through services like Uber, Airbnb, etc. Mr. Slee believed that the “Transformation Age (features a) shift to almost zero marginal costs” for businesses.
Trend #2: China has volume that no one can match
When China downgraded its currency of RMB in mid-2015, it sent a ripple effect down the stock markets of the United States and China.  Even the Federal Reserve’s raised the Federal Funds rate by 0.25% on Dec. 16, 2015 was carefully planned based on economic developments in the US, China, and the world. 
Alibaba (NYSE: BABA) launched its first annual Global Shopping Festival in China. This is a user group conference like The Apple Worldwide Developers Conference (WWDC). Mr. Ma, Chairman of Alibaba, provided insights about China’s economy. Mr. Ma predicted that growing middle class consumption would fuel the world economy for the next 10 to 20 years.  “China will be a 3 times bigger economy compared to current U.S. consumption primarily due to growth in the middle class from 300 million to 500 million.”
Trend #3: eCommerce has changed the way we do business today
Investors really like Alibaba (NYSE: BABA). Market capitalization (Market Cap) is “the aggregate valuation of the company based on its current share price and the total number of outstanding” shares of stock . Mr. Ma indicated that it took Walmart (NYES: WMT) nearly 60 years to reach its Market Cap but it took Alibaba (NYSE: BABA) only 14 years to achieve the same threshold. As you can see from Chart-1 above, Amazon.com (Nasdaq: AMZN) is still the Market Cap leader in the retail industry.
Mr. Ma concluded that the world of retail has moved from to B2C to C2B:
|Information Technology (IT)||Data Technology (DT)|
|For example, traditional manufacturing, with products marketed by businesses to consumers.||Innovation and creativity empowering consumers to reshape their commercial transactions.|
Amazon.com is the leading C2B company in the world.  Even traditional retail mega box store Walmart is trying to catch up in eCommerce space.
At the end of the day, you the business owners must continuously create value that matters to all stakeholders. Your stakeholders include 1) employees; 2) customers; 3) investors (mostly you); and 4) the broader community. Chart-1 helps us see how each company creates value for their investors. Amazon.com leads the value game compared to Walmart.
Chart-2 below shows the efficiency of employees where Amazon.com employees brought in an average of $652,757.95 in revenue last year. Walmart’s employees brought in an average of $220,013.64 in revenue last year. Once again Amazon.com creates almost 200% more value for its employees compared to Walmart.
However, consumers continue to favor Walmart’s retail platform, especially compared to Alibaba. It’s relevant that we’ve seen slower growth in China’s economy, and the hype of Alibaba’s IPO has not overcome the revenue deficit. Chart-3 demonstrated that Walmart still dominates the retail space.
Reading Chart-2 and Chart-3 together, we can predict that a company like WalMart, still heavily reliant on the traditional B2C model, will lose market share over time unless it adapts to a more consumer-directed business world. Many consumers will continue to shift to C2B models like Amazon.com and Alibaba in the near future.
My mom made the effort to learn the iPad and move along with the technology curve. At the beginning she diligently took notes and played with her iPad often. My mom is now riding the Transformation Age wave and is part of C2B in buying goods online.
How is your business preparing you to capture value creation the way that Amazon.com and Alibaba do?
How does your business ride the Business Evolution (Figure-2)?
How much more value will you create for your stakeholders in the Transformation Age?
We can help you! We’ve got the tools to reposition your business. Most importantly, we can help create value that matters to your employees, customers, investors (yes, you), and community.
1 Slee, R. (2015). Ch 1 Introduction. Time Really Is Money: How To Make $5,000 Per Hour (1st ed., p. 21). Charlotte, NC: Burn the Boats Press.
2 Ma, J. (2015, October 13). Jack Ma Talks about the Outlook for Consumer Spending in China at 2015 11.11 Launch Event. Retrieved December 30, 2015, from https://www.youtube.com/watch?v=TKg2hTmxyYY
3 WMT Key Statistics | Wal-Mart Stores, Inc. Common St Stock – Yahoo! Finance. (n.d.). Retrieved December 30, 2015, from http://finance.yahoo.com/q/ks?s=WMT Key Statistics