A Restricted View on the Ant Colony Strategy of the Ant Group

Eight months after the listing turmoil, a series of new developments by Ant Group has once again aroused attention. First, Chongqing Ant Consumer Finance Co., Ltd.’s application for opening was approved, which is an important step in compliance with the new regulatory environment; then, five companies including Alipay, AntChain, Ant Fortune, Alipay+, WorldFirst Wanlihui, etc. under the Ant Group A group of brands appeared on the sidelines of the European Cup and once again returned to the public eye.

The LED advertising space next to the European Cup is a top marketing resource for any sponsoring company. What’s interesting is that in the European Cup, the world’s most eye-catching event, Ant Group left its exposure resources to its sub-brands, including Alipay+, AntChain and WorldFirst Wanlihui , which are relatively unfamiliar to the outside world.

A Restricted View on the Ant Colony Strategy of the Ant Group

Such a choice must have profound implications for commercial companies that are accustomed to considering the ratio of input and output. This is a worthy consideration, and it is not difficult to read Ant Group’s intention to emphasize the independent growth and development of its sub-brands.

After the IPO was suspended, Ant Group entered a period of rectification and business adjustment. Everyone is enthusiastically discussing whether the elephant, the ant, “will not recover from then on.” But what is interesting is that most of the discussions mainly centered on the growth space of the credit business, while ignoring the layout and possibilities of other businesses.

The layout of this advertisement on the European Cup just allows us to take the opportunity to get a glimpse of Ant’s business considerations during the rectification period and the strategic direction hidden behind it. We try to answer from another angle: Why does Ant Group let its sub-brands attack independently? Has the adjusted business layout unintentionally confirmed the “ant colony effect” in the biological world?

Ants, not just small loans

Generally speaking, Ant Group thinks of Alipay and micro-loan business. In fact, the business of Ant Group is much more than this:

  1. Alipay. At present , the services provided by 3 million+ applets in Alipay terminal include travel services, convenience services, and local life. This year Alipay launched a series of merchant services, such as opening homepage traffic to merchants to help them better operate themselves.
A Restricted View on the Ant Colony Strategy of the Ant Group

2. Wanlihui and Alipay+ are global payment brands. One is dedicated to “one account, sell all over the world”, and the other is dedicated to “one wallet, all over the world”.

From around 2015, Ant Group began to cooperate with local payment companies overseas to provide support for them to build a local version of “Alipay”, with footprints in India, Bangladesh, Pakistan, Thailand, Philippines, Malaysia, Indonesia, South Korea and Hong Kong. And other countries and regions.

All these show Ant’s determination to provide services to consumers and small and medium-sized merchants around the world and implement its globalization strategy.

3. Ant wealth. It mainly focuses on the fund agency business, and cooperates with about 170 asset management institutions to provide services on the Ant Wealth APP and Alipay APP.

As a wealth management platform, its promising prospects can be seen from two aspects. First, the overall scale of personal investable assets in China has been rising steadily , reaching 241 trillion yuan in 2020. Second, China’s cash and deposits currently account for 58% of personal investable assets, compared to 12% in the United States. Even considering the Chinese people’s special financial preferences, China’s financial management market has a lot of room for improvement.

A Restricted View on the Ant Colony Strategy of the Ant Group

4. Antchain is the technology brand of Ant Group. It integrates blockchain, AIoT and other technologies. It is committed to linking industrial networks and building a trust mechanism, allowing blockchain to change production and life like mobile payment.

“The role of AntChain is to build roads in the industry, to help industries to better link and trade, and to create a more prosperous industrial ecology.” Jiang Guofei, vice president of Ant Group and president of the intelligent technology business group, explained.

Leading technical strength makes AntChain gradually known to the outside world. Data shows that the number of patent applications for the Antchain blockchain has ranked first in the world for four consecutive years. It can technically support 1 billion account scale, 1 billion daily transactions, and achieve 100,000 cross-chain information processing capabilities per second.

In the past four years, AntChain has solved trust problems in more than 50 industry scenarios, including product traceability, cross-border trade, copyright protection and development. Not long ago, AntChain also became a global partner of Euro 2020, exploring the application of blockchain and other technologies to help the digital upgrade of the sports industry.

In addition to the above businesses, Ant Group also has insurance, credit investigation, online banking and many other businesses, and they are all in a leading position in their respective industries. A new ecosystem has been formed.

As we all know, Alipay was originally born to solve the trust problem between buyers and sellers of Taobao platform. Why can Alipay develop into an ant group, and how can a seed grow into a towering tree? Let us look for the answer in the name of the Ant Group.

Ant Colony Strategy and Self-organization

In 2004, at the first China Internet Business Conference, Jack Ma delivered a keynote speech on “Ant Corps Can Defeat Elephants”. Although the ant mentioned at that time was not the ant of today, we can already see the strategy of Ali and even the ant, and we can also see the deep meaning behind the name of the ant in the future.

Coincidentally, at the Internet Business Conference in September 2012, Jack Ma proposed that Alibaba is about to transform and reshape its platform business. A few months later, in the Mogan Mountain Naked Valley, Alipay executives such as Peng Lei and Jing Xiandong focused on finalizing the 8 projects that Alipay wanted to do in the future, including Yu’ebao, Internet Banking, Zhaocaibao, and Zhima Credit, etc.

There is no doubt that these have become key projects and star products in the future. Why have so many product matrices with a high success rate been discussed as early as when the payment business just started? This is actually related to the ant’s strategy. Let’s start with the ant as a creature.

Economics and management often obtain nutrients from biology and physics, such as the laws of thermodynamics, and the theory of evolution. The ant colony exists as a super-individual, and its operating mechanism has also aroused the interest of many scholars.

A single ant is extremely small and has no individual consciousness, but an ant colony can complete complex projects such as reproduction, moving, foraging, and nesting through the internal mechanism of genetic records.

A Restricted View on the Ant Colony Strategy of the Ant Group

When observing the behavior of a single ant, we are completely confused; when observing the behavior of the entire ant colony, we can see whether it is foraging, moving or building a nest.

Such a cooperative system that relies on the unconscious behavior of individual entities but can eventually show the result of “smart” behavior is called self-organization.

Research on self-organization has been abundant. Among them is a theory called a dissipative structure that proposes that to form a self-organization, the following four conditions should be met:

  • Open system. We all know a closed system, and it must tend to be disorderly. For example, if our room is not regularly cleaned up, even the best gold and silver kennels will quickly become dog kennels. This kind of closed system will irreversibly develop into a disordered state is the famous law of entropy increase; to maintain an orderly state, there must be an exchange of external energy and information. For example, a messy room, one day when my mother comes in, the room will become tidy and orderly. This is the work of a kind of external energy that changes the disordered state. This is the first condition, an open system to maintain energy and information exchange.
  •  Non-linear interaction between system elements. This is a bit hard to understand. Take the ant colony as an example. A single ant is very stupid, not even stupid. But queens, worker ants, soldier ants, etc. can build very orderly nests by completing their seemingly random behaviors. This is not a simple accumulation of behaviors, but the interaction and coordination between the behaviors of different ants can be achieved. This effect can be understood as a non-linear effect.
  •  Stay away from equilibrium, a state of dynamic equilibrium. In this state, the microscopic random changes that occur in the system can be amplified.
  •   Fluctuation, that is, rise or fall. Random changes in the microcosm are amplified away from the equilibrium state, allowing the system to reach a more advanced and orderly state. This amplified change is called fluctuation.

I spent a lot of time introducing the connotation of self-organization, because we will find that the ant group actually adopts such an ant colony strategy and is creating a self-organization intentionally or unintentionally.

1. Keep it open. There is no doubt that the Ant Group is an extremely open system. As an Internet company, Ant Group’s emphasis on employees and high salaries can attract countless talents to join; the customer-first corporate culture and the credit endorsement as a large platform make countless merchants and consumers willing to use and understand; as a global group, Being able to come into contact with countries and regions of different backgrounds, and constantly receiving new stimuli…

The open system allows Ant Group to exchange information with a large group of users and talents. This is the prerequisite for the Ant Group to become a self-organization.

2. Ant colony strategy. It has many business segments, and each business segment is independent, but different business segments can have a non-linear effect.

A Restricted View on the Ant Colony Strategy of the Ant Group

Ant Group has a very clear development roadmap. From payment services for merchants and sellers, to financial services, and then to technology output services for financial institutions, the central theme of the financial technology service platform has always been closely focused.

When the number of businesses is large enough, supplementary effects and synergies between different businesses will be produced, and even a wonderful effect of unintentionally planting willows and willows.

These non-linear effects give the Ant Group a unique vitality. This time, the Ant Group has shown five brands at the European Cup, which seems to be announcing its ant colony strategy to the outside world.

3. Stay away from equilibrium. Every enterprise is in a process of dynamic equilibrium. Once there are new business growth points or major changes in external factors, the company enters an unstable state. In a state far from equilibrium, this change will be amplified.

The ant group is in a state of remote equilibrium. On a platform with a large number of users, every small change attempt will be infinitely magnified.

4. Continuous R&D investment triggers “fluctuations”. In a state of far from equilibrium, even a small change may develop into fluctuations. For example, changes in regulation are a change for the entire industry. But for self-organization, it may develop into huge fluctuations, allowing enterprises to re-enter a new dynamic balance and form a more dynamic and orderly state.

In a technological enterprise, the most important and core change is technological innovation.

In 2018, 2019, and January-June 2020, Ant Group’s research and development expenses were 5.72 billion yuan, 10.605 billion yuan, and 4.789 billion yuan, accounting for 7.89%, 8.79%, and 7.32% of revenue, respectively.

Currently, ants group has formed the BASIC (B block chain behalf Block Chain i.e., A representative of AI Artificial Intelligence i.e., S for information security Security i.e., on behalf of the I things Internet of Things i.e., C for Cloud Computing i.e. cloud) of The technology cornerstone provides digital financial services for financial institutions, consumers and small and micro enterprises.

From Fintech to Techfin, it is not only the self-organizing development of Ant Group, but also the necessity to reverse market stereotypes.

Concluding remarks

In fact, Ant Group has already had many successful self-organization development attempts.

Alipay, the predecessor of Ant Group, is a self-organized development in itself. The payment business was originally created to facilitate transactions, but due to the huge number of users and capital flow, Alipay soon had a huge accumulation of funds and technology. So began to operate independently, and gradually developed into a brand new business.

Another example is artificial intelligence, blockchain, and privacy computing technologies. Initially, they had to do things to make the platform customer experience smoother and safer. However, because of the existence of a large number of users, once related technologies are incubated and matured internally, they can be opened. Create a brand new business for financial institutions.

As a self-organization, the ant colony has allowed ants to survive on the earth for hundreds of millions of years, and more than 12,000 species have evolved.

If the Ant Group can stay away from equilibrium, continue to innovate, and complete self-upgrading through various “ups and downs”, it will hopefully hold the weight of the time cycle again.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/a-restricted-view-on-the-ant-colony-strategy-of-the-ant-group/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-07-03 08:15
Next 2021-07-03 08:18

Related articles