Pros and cons of Alibaba partnership 

opinion May 15, 2018 01:00

2,548 Viewed

Data these days is often described as the new gold, so it’s not surprising that we need to closely monitor developments in the recent strategic partnership between the Thai government and Alibaba, given the prominence of data sharing to the agreement.

Alibaba will invest in a Smart Digital Hub in Thailand’s Eastern Economic Corridor and use its platforms to help sell Thai products and services such as agricultural products and tourist services. Aspart of the deal, Alibaba will get access to the Thai market and data.

The agreements are being hailed as a great way to help Thailand accelerate its digital transformation.

Alibaba’s systems and knowledge will be shared with local entrepreneurs and officials, Thailand will develop its logistics capabilities using Big Data and artificial intelligence (AI), and precision marketing will take place in an era of smart tourism.

But there are also concerns that Alibaba will gain an unfair advantage compared with other operators as it will be integrated into Thailand’s systems and gain unique access to Thailand’s data.

So how do the potential benefits and risks measure up?

On the plus side:

nThe arrangement offers a great opportunity for Thai entrepreneurs to have access to the large

Chinese consumer market.

nThe Ministry of Industry has promised to work with Alibaba to provide training in digital skills to SMEs across Thailand, including farmers and others in rural areas.

nAlibaba has a unique advantage of scale which is unmatched by any current Thai operator.

On the downside:

nCompetition in the Thai market may intensify from Chinese vendors.

nThe deal may lock Thailand into the relationship with Alibaba and preclude similar and potentially more beneficial arrangements with other global players.

n Alibaba will gain access to confidential data including highly sensitive commercial information.

On balance the huge benefits seem to outweigh the potential risks.

 These kinds of platforms are becoming a necessary part of modern government and business and we must prepare ourselves for a future featuring AI and Big Data.

To allay some concerns, the government has said that the deal won’t be exclusive, and the door will be kept open to other global players.

But the government must also demonstrate to the public that the arrangement will have good governance, transparency and integrity, that security will be protected, and that training promises will be fulfilled.