Alibaba and Sina Weibo, with their hundreds of millions of users, produce a huge volume of data every day, every minute and even every second. [Photo / Provided to China Daily]

Firms capitalize on information gleaned from their many online customers

Internet observers analyzing the benefits of the sensational deal between Alibaba Group Holding Ltd and Sina Corp's Twitter-like Weibo service reckon data resources may be a hidden treasure for both companies.

During the May Day holiday this year, e-commerce giant Alibaba announced it had acquired an 18 percent stake in Sina Weibo for $586 million. Alibaba has an option to boost its stake in the popular social media outlet to 30 percent.

Obviously, the deal could help Alibaba greatly expand its reach on the mobile Internet - a battlefield where Tencent Holdings Ltd gained strength. "But what's more important, Alibaba and Sina will get a big boost by exchanging data and mining data," said Yang Hai, a Beijing-based Internet observer.

Alibaba and Sina Weibo, with their hundreds of millions of users, produce a huge volume of data every day, every minute and even every second. "The two companies are born to be big data companies. Their data resources are complementary and can be cross-used," Yang pointed out.

Jack Ma, Alibaba's chairman, had previously expressed a belief that e-commerce platforms, finance businesses and data research companies are the three strategic directions for Alibaba Group. Alibaba is more like a data company, Ma once said, because the core part of e-commerce and finance business is data.

"Data can provide unexpected value," said Che Pingjue, chairman of Alibaba's internal data committee, during a Hangzhou conference in April. By researching the transaction data of Taobao, Che and his team have classified Taobao buyers into 12 categories.

For example, the largest group of Taobao clients are the so-called "night fighters". That group has a population as big as the city of Beijing, with more than 22.8 million people. They usually shop online between 11 pm and 5 am.

The more accurate the depiction of clients is, the more precise marketing campaigns can be made for e-commerce companies, said Vivian Deng, client services director of Epsilon China. "We can see big data technology has started to gain popularity in China, especially in e-commerce and the banking industry," she said.

Big data usually derives from social media, video, audio and imaging tools. Compared with traditional data, its features are huge quantity, rapid speed, diversity and uncertainty.

Unlike the Alibaba and Sina cooperation, which did not emphasize its data cooperation publicly, Cloudary Corp (formerly known as Shanda Literature) Chief Executive Officer Hou Xiaoqiang expressed a clear willingness to explore big data.

At an April news briefing, Hou said he was inspired by the huge success of the recent American political TV series House of Cards. The birth of this TV series was based on big data technology. NetFlex, a US-based online video company, researched millions of viewers' comments and search activities then decided on the framework and major performers for House of Cards.

"We can learn lessons (from this case). Without doubt, China can take similar strides," Hou said. During the same event, Hou announced the establishment of a script-writing subsidiary that will use big data theory to produce scripts.

Shen Xiaowei, chairman of IBM China research and development group, said China's big data industry is running neck-and-neck with the rest of the world. However, China has many unique opportunities that may help the country to lead the world's big data industry.

"The huge population and economy mean China's data volume will become the world's largest. It will provide its big data research with many creative angles," said Shen.

Meanwhile, during China's economic development process, the country faces challenges from sectors such as environmental protection and food safety. "There is a huge demand. The country needs big data analysis to introduce better solutions," Shen added.

Currently, domestic Internet companies including Alibaba, Baidu and Tencent, as well as telecom firms such as Huawei and China Mobile, have been actively promoting their big data businesses. "They all have good development opportunities," said Fang Bingxing, president of Beijing University of Posts and Telecommunications.

"But the use of big data will bring in some security concerns. Companies have to protect individual privacy and make sure there will be no harm to people in terms of data research," Fang pointed out.