How do Chinese tech-companies relate to the hospitality industry?
Author: Jialin Wu
Both Tencent’s and Alibaba’s networks are a great example of the hotel analogy mentioned in the very beginning of this article series. Their networks are built on top of their focus and understanding of their end-customers that is enhanced through technology and data. However, data is not something that anyone can just collect out of nowhere. The scale, depth, and variety of data that companies like Alibaba and Tencent are able to collect is only possible if customers willingly interact with these companies in multiple contexts due to their added value. Therefore, the first step in establishing any ecosystem or network effect is finding that sweet spot of creating value for the customer and differentiating the experience by providing customer service excellence. This initial sweet spot is usually not uncovered through abundant access to data, but rather through understanding human needs and desires by practicing empathy for the end-user. Technology is simply a medium that helps companies to meet those needs and desires. Data is not the be-all and end-all; it is a tool that helps companies keep up with changing behaviours, better understand the users, and find opportunities for improvement. All companies have access to abundant amounts of data, but not many know how to use what they have, because only few firms have built their business around their customers.
Alibaba Ecosystem
The hospitality industry understood long ago that the guests must be at the heart of everything that hotels do. Consequently, over a long period of time, the industry has spent a lot of effort to understand guests’ needs and desires. Tech companies, in contrast, were able to come to an in-depth customer understanding in a relatively short period of time not just because of their proficiency in using technology, but because they look outside their own box. Just like Steve Jobs looked at the hospitality industry for inspiration, many tech giants have been inspired by other industries. For example, Google hires psychologists, sociologists, linguists, medical professionals, and so on to help the firm expand its understanding of users. Tech companies have grown and evolved at an unprecedented rate and many have been able to establish themselves in multiple verticals in a relatively short period time because they are proficient at experimenting and learning from outside their own areas. The tech community has a vibrant insider network in which people share mistakes, advise, and ideas. The mentality within this community embraces risk, experimentation, learning, and, most importantly, change. These are elements that many corporates struggle with and therefore, they will have a hard time seeing or anticipating when their industry will be replaced by a disruptor other than their usual competitors.
WeChat Ecosystem
It is essential that businesses start cultivating future-proof skills that will help them get better at anticipating and coping with change. Every business caters to customers, and customers change at an accelerated rate. A single industry’s understanding of the customer will no longer be enough for meeting customer needs, not when the likes of Amazon has proven that a single company can cater to their many needs and provide excellent customer service on the side. The benchmark and customer expectations have long surpassed what many businesses are capable of providing today. Unfortunately, it is a time of playing catch up for many. Companies need to look outside their own industries to learn and seek inspiration in places they haven’t thought about before. The hotel industry was only one source of inspiration for Steve Jobs when it came to his retail strategy. He took inspiration from multiple best in class sources, which he then mixed and matched. He didn’t settle or think that a single playbook of another industry was good enough. He took elements from multiple industries and then essentially created his own, just like how he created the iPhone. There isn’t an end-all be-all playbook for delivering customer service excellence, because people change. However, putting the customer in the center and setting a strong customer-centric mindset across the organisation is a pretty solid start.
