According to The Globe and Mail, Alibaba’s retail record has been broken today-$9.3 billion in USD on China’s Single’s Day. Born on this day, I have little idea how this semi-jocular festival has evolved into a national shopping jubilee over the last decade, but I truly feel that convenient transport, large consumer base and increasing wealth have made the giant in e-commerce. A question, however, has hovered in my head for a long time: Can this model be replicated in Canada?

When I first shopped online in Canada, I was astonished by high shipping charge and delivery procrastination. I conceived that Canada’s e-commerce had much room for improvement. As I learned progressively in COMM 101, however, my view has changed.

Firstly, I believe that Canada’s small population and high labor cost prevent rapid development in online retail. Consider cost of transport. In China, shipping cost can be very low, because labor cost is low and many deliveries can be made at once-Density of population is high especially in major cities. I recall high-rise apartment buildings in Shenzhen-In Vancouver we have nothing in comparison, not because Canada cannot build them, but because Canada does not need them.

Secondly, wide availability of cars and absence of congestion make shopping a less grueling activity for Canadians. In China, less developed cities see fewer people with cars, while large cities are constantly plagued with traffic jams.

Thirdly, after seeing Canadians’ focus on practical utility, I do not believe that Canadians have high demand for what Chinese typically buy, such as non-luxury clothes with varied design and accessories. I have been to some malls and was astonished by them selling mostly the same brands. This does not happen in China.

I believe, however, that Canada’s online retailing business still has much to explore on accessibility of varied goods that physical shops already offer. In the area of e-commerce, Canada needs to learn from Asian countries.

 

Reference: Alibaba: A retail colossus flexes its muscles

<http://www.theglobeandmail.com/report-on-business/alibaba-singles-day-sales-break-past-8-billion/article21538437/>

Image Source: http://wei-ukconsulting.co.uk/wp-content/uploads/2014/11/Singles-Day-Chart.jpg

-If  the United Nations was fully funded, why would we need the Arc or social enterprise?

During my course preparation for lesson 20, this question reverberated times and again in my mind. In fact, social enterprise is not a novel concept to me. When I was in high school, I attended one Model United Nations event involving delegations from multiple countries, and our issue was micro-finance in Africa. I also have a friend, a true social entrepreneur, whose business provides impoverished children in Vietnam with affordable stationary.

Firstly, I believe that every top-down decision is only effective when people truly comply with it, with good administration or even force. The UN, however, has no military or political authority to enforce any decision. For instance, it could only condemn Rwanda in 1994 for genocide, and urge its members to send peace keeping troops. If we do not take the initiative to create social enterprises or at least encourage them, we will only see politicians preaching for change without seeing any real change coming.

Secondly, we must bear in mind that the UN is not a business group, but a political one. It is true that the UN could help humanitarian organizations clear political barriers, for instance, help doctors acquire unhindered access to fighting areas. The UN, however, is never as able as shrewd businessmen in detecting opportunities that allow social enterprises to survive and develop.

A third and more subtle point is that social enterprises generally teach people how to fish, while the UN gives fish directly. If a famine arises, it is likely for the UN to be immediately involved. In less turbulent times, however, only social enterprises have the day-to-day attention required to help poor people regain self-sufficiency.

 

Reference: The Arc Initiative

<http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative>

Image Source: http://www.socialenterprise.net/assets/images/image001.jpg

 

I was reading Bogdan Proskurnia’s Human Intuition vs Big Computer Data when the optimism reminds me of a book called Antifragile. Written by Nassim Nicholas Taleb, a former trader, the book fully explores the danger of modernism, and constantly reminds us that man-made complex systems are extremely vulnerable to rare but disastrous events.

According to Nassim, natural systems have been effectively tested through time, and what remains in our sights are not easily broken down by changes. For instance, even a nuclear war cannot destroy the planet wholly. Man-made systems, such as financial systems, however, have developed too rapidly during the past century. While their complexity enables errors to occur at more joints than ever, the impact of a big error could cause unprecedented damage as well. For instance, the Cuban Missile Crisis nearly caused a nuclear war, and now when a financial crisis occurs, multiple markets go down together due to globalization. He warns us that rapid development and over-reliance on new technology could become very dangerous.

This is not saying that big data, among other impactful technologies, is totally unreliable. What we need is empirical skepticism. Social sciences, unlike natural ones, produce results that more or less deviate from the Truth. For instance, economists, with various complex models,have rarely predicted financial collapse. Financial models, such as DCF and comparable multiples, employ many assumptions regarding depreciation, firm similarity, or similarity between past and present. On the one hand, the assumptions may not be entirely accurate. On the other hand, statistics cannot reflect everything in this world (it instead builds a model reflecting a real situation).

Computer performance today is astonishing, but computer intelligence still cannot match us in decision making. While holding the belief that science is our future, we must also remain eternally aware of its flaws, and withhold in us healthy skepticism at all times.

 

Reference: Antifragile: Things That Gain from Disorder, Nassim Nicholas Taleb, Random House, 2012

Image source: http://www.pwc.com/en_US/us/technology-forecast/2013/issue2/features/assets/th-feature01-figure02.jpg

While reading external blogs, the article “The Agony of Realizing, It’s All Social” raised in me particular interest. It says that many good employees, when leaving their original working teams, under-perform instead. He believes that “management is a social act”, and creating good communication and connection among employees can genuinely boost efficiency.

I totally agree with the blogger’s view when I recall our lecture for “People, culture and teams”. Zappos’ image as a closely bonded company still hovers in my mind. By giving employees genuine care through insurance coverage, free food, games and celebrations, it is obvious that Zappos has a healthy working environment devoid of what we contemptuously call “office politics”. I believe that when every employee pays full attention to the company’s well-being(which links to that of his own), he is able to cooperate well with his co-workers and work efficiently. Unlike stream line production, service companies, as we see today, cannot boost efficiency much through employing new technologies, and this is where management becomes crucial.

In other firms such as Google, we can also observe intention of creating healthy working atmosphere. Google has gyms and free food for employees, and a employee could really take some time off to have afternoon tea with his co-workers. This is not waste of working time, however, for informal contact is usually more effective than formal business meetings, and co-workers who know each other better are more likely to offer their true opinions.

Therefore, I believe that good management is crucial to good coordination within an enterprise, and good coordination is in turn essential to efficiency.

 

Image Source: http://www.personalitytutor.com/files/2012/03/Socializing-With-People.jpg

Bill Gates initially managed his business part-time as a university student. Steve Jobs started Apple with Steve Wozniak in a garage. After many success stories, venture capitals now have unprecedented generosity for poor start-up entrepreneurs, which at first glance seems a good thing. The article about “too rich to succeed”, however, suggests otherwise.

I cannot help but agree with what the article presents. Entrepreneurship, in its original form, involves much risk to an entrepreneur. Firstly, the entrepreneur must be willing to give up stability, for he usually quits college or forsakes a stable job to pay full attention to his business. Secondly, even with that, generally more entrepreneurs fail than succeed. Immediate availability of capital, however, lowers the risk for entrepreneurship, and encourages more people less qualified as entrepreneurs to start businesses. After all, even failed entrepreneurs today could get appreciation from big firms, and only capital providers need to bear the loss. Given the situation, today’s entrepreneurs will be more aggressive in taking risks than those who totally rely on themselves, or sometimes squander money unnecessarily on “management” and “structure”-whose benefits are only obvious in large firms-simply because they know not how to use the money.

In addition, even when a firm with ample capital at the beginning succeeds, it faces many internal problems. Firstly, investors need monthly or quarterly reports, which adds administrative burden to an entrepreneur. Secondly, investors could effectively influence business decision, sometimes against an entrepreneur’s right intuition. These will have negative impacts on expansion of start-up businesses.

I am not preaching that zero capital should be provided to entrepreneurs, but our investors need to spend their money more rationally. In the past, only start-up businesses that have survived and are prepared to expand begin receiving financial support in large quantities, so I believe that the bulk of money should continue being spent that way.

 

Reference: The “Too Rich to Succeed” Challenge Facing Start-ups

<http://knowledge.wharton.upenn.edu/article/what-happens-when-start-ups-raise-too-much-capital/>

Image Source: http://tribkswb.files.wordpress.com/2013/07/money.jpg