Job Interview Questions: The Size Together With Orbit Of Alibaba
Recently Bronte advertised for an entry degree position. We conduct maintain instantly hired.
There was 1 interview interrogation which nobody gave an alone satisfactory reply to, as well as many people gave unsatisfactory answers to.
This is non surprising. I don't conduct maintain an alone satisfactory reply either. The interrogation was nearly Alibaba - the Chinese meshwork giant - as well as the only argue I am going populace is that Barrons has asked several of the same questions and Alibaba has responded.
As preamble I told the prospective employees what Alibaba was as well as what Singles Day was. This was graduate recruitment so I could non last sure that everyone would know fifty-fifty that. So I said:
i). Alibaba within PRC is the biggest but non only online shopping site with Tabao as well as TMall. These were essentially flea-markets where lots of people had stalls (shops within shops) as well as they sold a huge reveal of items. Think of it every bit a combination of Amazon as well as Ebay as well as you lot volition non last far wrong.
ii). Alipay is the criterion agency of paying for something online. Think of it every bit the equivalent of PayPal. Note in that location is a major rival (Tenpay).
iii). Singles Day is a kind of anti-Valentines Day. On Valentines Day if you lot are attached you lot exit with your beloved. On Singles Day you lot exit as well as endeavor to detect a beloved. However to a greater extent than importantly it was the large hateful solar daytime of online sales - recollect of it every bit Black Fri inward America or Boxing Day inward Australia. It is the biggest shopping hateful solar daytime of the year.
I also indicated that the questions would last along the lines of "how interesting is this" as well as "how much bigger tin it get". The dominion of pollex of class is that if an meshwork fellowship tin grow 500% from hither you lot in all probability should ain the stock. However if it is close the halt of its growth stream you lot should non ain the stock - because it volition derate.
Here were the articles - as well as I desire you lot to read every bit if you lot were doing the chore interview. Allow yourself xv minutes...
The BBC article...
and the Australian article...
http://www.powerretail.com.au/news/singles-day-2014/
Starting question: How much bigger tin this get?
Lots of people started yesteryear argument from China's growth charge per unit of measurement - as well as they got projections 5x, 10x bigger than now. But a few noted that 278 1 one one thousand thousand deliveries on Singles Day was "a lot" as well as thought that mayhap it could double from hither but x times was non likely.
But at this dot I wanted to explore the 278 1 one one thousand thousand deliveries number. So the interrogation is "how many meshwork users inward China". Most people guessed a reveal that was reasonable - so I pointed them to official numbers. Roughly 650 1 one one thousand thousand would last a expert guess. The official reveal at the halt of 2013 was 618 1 one one thousand thousand - as well as the growth charge per unit of measurement has already slowed.
So in that location was 278 1 one one thousand thousand deliveries for a total prospective 650 1 one one thousand thousand users. In 1 day! The interrogation is how much bigger tin this instruct as well as what drives it to last bigger?
I so pointed them to official numbers that said that Amazon (worldwide) had 244 1 one one thousand thousand users. That was 244 1 one one thousand thousand dissever accounts made at to the lowest degree 1 society inward the yesteryear twelve months. The Amazon numbers are here.
Alibaba delivered to a greater extent than parcels inward a single day than Amazon had users inward a whole year.
Most people so figured that the users had multiple deliveries which is I approximate a possibility. However it worth comparing this to Cyber Mon inward the US. This article - which I presume is accurate - gives Amazon orders for Cyber Monday. To quote:
In society to uphold its reputation for fast deliveries, Amazon hired 80,000 seasonal workers inward anticipation of Cyber Mon as well as the vacation shopping season, according to a study released yesteryear the company. Last year, Amazon sold nearly 426 items per 2d on Cyber Monday, as well as the online retailer expects to sell fifty-fifty to a greater extent than this year.426 items per 2d is almost 37 1 one one thousand thousand items. This is to a greater extent than straight from an Amazon press release. Singles hateful solar daytime is 7.5 times bigger. To gibe Amazon inward timeliness of delivery they would demand to hire 600 one one thousand seasonal workers who piece of work at the same efficiency every bit Amazon workers. Note that Amazon workers piece of work with a lot of robots and other engineering to pick as well as file as well as deliver items.
The Alibaba 20-F (the SEC filed annual report) does non demo anything similar this reveal of employees... to quote:
Employees
As of March 31, 2013, 2014 as well as 2015, nosotros had a total of 20,674, 22,072 as well as 34,985 full-time employees, respectively. Substantially all of our employees are based in China.
The next tabular array sets out the breakdown of our full-time employees yesteryear functions every bit of March 31, 2015:
Function | Number of employees(1)(2) | |||
|---|---|---|---|---|
Engineers | 12,822 | |||
Customer service | 2,858 | |||
Others | 19,305 | |||
| | | | | |
Total | 34,985 | |||
| | | | | |
| | | | | |
- (1)
- The reveal of employees presented inward this tabular array does non include third-party consultants as well as contractors that nosotros employ, substantially all of whom are based inward China. These consultants as well as contractors primarily performed piece of work related to sales, research, logistical back upwards as well as client service.
- (2)
- Our total reveal of employees increased to 34,985 as of March 31, 2015 from 22,072 as of March 31, 2014. Of the increment inward employees, about 7,300 was due to the completion of our acquisitions including UCWeb, OneTouch, Alibaba Pictures as well as AutoNavi, as well as a bulk are engaged inward engineering scientific discipline as well as data analysis.
However Footnote 1 on the inward a higher identify tabular array notes that this does non include "third-party consultants as well as contractors that nosotros employ, substantially all of whom are based inward China. These consultants as well as contractors primarily performed piece of work related to sales, research, logistical back upwards as well as client service."
If Alibaba were every bit efficient every bit Amazon (meaning merely every bit many computers/robots etc) as well as had the same delivery schedules every bit Amazon in that location would demand to last nearly a 1 one one thousand thousand employees at Alibaba as well as its consultants as well as some other 600 one one thousand or so seasonal employees around Singles Day.
These numbers are consistent with the annual report.
Again to quote the 20-F.
We believe that orders from transactions generated on our marketplaces represented a important part of our delivery partners' total delivery volumes inward the twelve months ended March 31, 2015. According to information provided yesteryear them every bit of March 31, 2015, our transcend fourteen strategic delivery partners employed over 1,400,000 delivery personnel inward to a greater extent than than 600 cities as well as 31 provinces, straight controlled municipalities as well as autonomous regions inward China. Collectively they operated to a greater extent than than 100,000 delivery stations. This network managed the delivery of over 8.6 billion packages from our PRC retail marketplaces to consumers inward the twelve months ended March 31, 2015.
It may last possible that Alibaba has outsourced logistics almost alone - with a 1 one one thousand thousand outsourced employees controlled yesteryear 35 one one thousand in-house employees. The numbers inward the annual study are consistent with this. This soundless is a much to a greater extent than "virtual" sentiment of Alibaba than I had previously held. Amazon wins through logistical superiority. You would non desire to compete with them. Alibaba it seems wins through logistical outsourcing of the highest quality.
We should also annotation the scale of the 8.6 billion packages the network claims to conduct maintain delivered. UPS delivered 4.6 billion packages per year and had 435 one one thousand employees, 539 aircraft (including charters), nearly 100,000 delivery vehicles as well as almost 2000 operating facilities. [UPS factsheet here.]
To genuinely deliver at a larger intensity than Amazon Alibaba as well as its outsource network would demand to a greater extent than staff or working capital missive of the alphabet (or both) than Amazon as well as UPS combined.
We should also annotation the scale of the 8.6 billion packages the network claims to conduct maintain delivered. UPS delivered 4.6 billion packages per year and had 435 one one thousand employees, 539 aircraft (including charters), nearly 100,000 delivery vehicles as well as almost 2000 operating facilities. [UPS factsheet here.]
To genuinely deliver at a larger intensity than Amazon Alibaba as well as its outsource network would demand to a greater extent than staff or working capital missive of the alphabet (or both) than Amazon as well as UPS combined.
The size as well as orbit of Alipay
Only a yoke of my candidates (all of whom injure upwards on the brusk list) noticed the throw-away draw inward the Australian article nearly the size of Alipay. To quote:
At the peak of the event, 2.85 1 one one thousand thousand transactions were processed every infinitesimal yesteryear Alipay.
Now I asked "how many transactions per hateful solar daytime produce you lot recollect is 2.85 1 one one thousand thousand inward the peak minute"?
If they started to multiply yesteryear sixty as well as so 24 this was a problem. Obviously the peak infinitesimal is much higher than the book at 3AM. I hateful when conduct maintain you lot e'er used PayPal at 3AM? The peak hateful solar daytime is evidently plenty less than 24 hours worth of the peak minute.
A pretty expert approximate is that the peak hateful solar daytime should last betwixt four as well as nine hours of the peak infinitesimal (in other words the peak hateful solar daytime is somewhere betwixt 2.85*60*4 1 one one thousand thousand transactions as well as 2.85*60*9 1 one one thousand thousand transactions). This seems sensible. I conduct maintain discussed with several people inward the payment manufacture the ratio of peak infinitesimal to peak hateful solar daytime volumes as well as got numbers inward this gain - but I produce non conduct maintain definitive numbers. [If someone from PayPal or Visa wants to come upwards through with something definitive I would similar it.]
A pretty expert approximate is that the peak hateful solar daytime should last betwixt four as well as nine hours of the peak infinitesimal (in other words the peak hateful solar daytime is somewhere betwixt 2.85*60*4 1 one one thousand thousand transactions as well as 2.85*60*9 1 one one thousand thousand transactions). This seems sensible. I conduct maintain discussed with several people inward the payment manufacture the ratio of peak infinitesimal to peak hateful solar daytime volumes as well as got numbers inward this gain - but I produce non conduct maintain definitive numbers. [If someone from PayPal or Visa wants to come upwards through with something definitive I would similar it.]
7 hours of peak infinitesimal (which my informal enquiry says is reasonable) is nearly 1.2 billion transactions inward the day. That is ii per meshwork user inward China. That is to say a large number.
Now Alipay is roughly the equivalent of PayPal. It powerfulness last used to a greater extent than than PayPal because people transportation remittances on it. It is unlikely to last used every bit much every bit Visa. After all Visa is used inward the shops all the time. Look at your ain life as well as inquire yourself how much you lot job Visa as well as how much you lot job PayPal.
We tin produce a comparing to Visa. Visa overbuilds capacity - they have built capacity to 56 one one thousand messages per second. We know from some other press unloosen that was about 4 times the actual peak inward 2013. So the 2013 peak was 14,000 transactions per 2d - which is 840 one one thousand per minute.
Visa's peak transaction volume globally is only nearly xxx per centum of Alipay's peak minute. This suggests a degree of shopping inward PRC that puts the US, Europe as well as most of Asia to shame.
So I asked: Are in that location whatever other ways of reconciling these numbers?
Some people suggested (a) multiple deliveries for items, (b) that many of the items delivered were virtual items such every bit emoji as well as their delivery is non technically problematic as well as (c) insufficient information treatment capacity as well as hence queuing explaining the almost absurdly large peak infinitesimal on Alipay.
So I asked: How would you lot essay this. And I got some interesting answers - some of which powerfulness require a picayune piece of work to pan out. However some answers injure upwards looking silly. If you lot recollect for illustration that a substantial proportion of the transactions are low-value emoji so the remaining transactions current of air upwards with implausibly high average value.
But a few - knowing Bronte's history - suggested that nosotros could non dismiss the thought that Alibaba was faking their numbers.
Most people who suggested that knew what an extraordinary (and potentially outrageously profitable) proposition it was. After all some two-bit opposite merger Chinese fellowship powerfulness last a fraud - but you lot tin only brand a express turn a profit from that. The thought that Alibaba - a fellowship with one-half the marketplace seat cap of Google powerfulness last making its numbers upwards is - good - extraordinary.
So I responded - fairly - that
(a) extraordinary claims require extraordinary testify (known ubiquitously every bit the Carl Sagan standard), and
(b) extraordinary claims offering extraordinary opportunities for turn a profit (as the marketplace seat is really wrong) as well as hence it powerfulness last worth gathering the testify so nosotros tin conduct maintain or turn down the extraordinary claim.
And so hither was the commutation dot to the question: how would nosotros instruct nearly gathering that testify as well as what kind of testify would you lot require to position the merchandise (short Alibaba) on?
I should last clear that I produce non conduct maintain the extraordinary testify - but I produce recollect it is a thesis worth testing...
I should last clear that I produce non conduct maintain the extraordinary testify - but I produce recollect it is a thesis worth testing...
This was a tough interrogation - as well as I did non expression many (if any) expert answers. So I am going to leave of absence it to you lot dear readers for comments. I am perfectly willing to conduct maintain answers which demonstrate that the "fake numbers" thesis is wrong. Indeed the thesis is extraordinary and hence probable to last wrong.
However earlier I instruct I should expression a picayune at delivery data. The 20-F (quoted above) suggested that the delivery network had 1.4 1 one one thousand thousand employees as well as over 100,000 delivery stations. This suggests an average of fourteen employees per delivery station as well as in that location must last a huge reveal with less than 10 employees including the truck drivers who really produce the delivery.
There was a Wall Street Journal story late nearly delivery infrastructure inward the provinces. There was a painting of a delivery station inward Northeastern China. It was - to position it mildly - crude.
Another paradigm of fifty-fifty to a greater extent than unsmooth sorting engineering heads a Bloomberg article:
Ramping something with this lack of automatic sorting engineering upwards for Singles Day would require a lot of staff. Some candidates thought of trying to count them.
With 100,000 delivery stations it is unlikely to last possible to produce it on a statistical dry soil yesteryear counting trucks. There are far likewise many locations as well as they are likewise heterogeneous.
Ramping something with this lack of automatic sorting engineering upwards for Singles Day would require a lot of staff. Some candidates thought of trying to count them.
With 100,000 delivery stations it is unlikely to last possible to produce it on a statistical dry soil yesteryear counting trucks. There are far likewise many locations as well as they are likewise heterogeneous.
Maybe you lot could produce it with official job numbers. But inward PRC that is almost sure a dead end. Chinese job numbers are with the most suspect of all Chinese economical data.
Alibaba's ain advertisement cloth contains several videos of their logistic operations. Here is a video interview of a adult woman describing the seasonal piece of work packing boxes for Singles Day.
http://www.alizila.com/chinas-1111-shopping-festival-sees-massive-sales-first-few-minutes-video
The adult woman states she volition commonly pack nearly 200 packages a hateful solar daytime but on Singles Day she volition produce 800-900. If it takes her 50 seconds to pack a bundle (reasonable looking at the process) as well as she takes five minutes intermission per hr packing 800 packages volition select nearly 12 hours. I approximate that is reasonable. But to produce the book for Singles Day would require 350 one one thousand such people just inward packaging, non fifty-fifty delivering.
The fellowship has videos of its logistics every bit well. Here is a summary video - with pictures of the delivery network:
(The master tin last found here...)
The fellowship also has b-roll material (which they license widely) which has quite extensive video of the conveyor belt systems as well as the sort.
Strangely much of the cloth involves people standing around as well as multi-handling cloth on conveyor belts rather than doing the existent role of a sorting facility (that is making choices so sorting).
Similarly in that location is b-roll cloth of packaging happening inward 1 of Tabao's merchant shops. This involves distinctly low-tech (and slow) packaging as well as sorting for Singles Day. It is soundless clearly inward component division aimed at a Western audience (and presumably Western investors) every bit the whiteboard is inward component division inward English.
We conduct maintain some information nearly the size as well as the amounts of working capital missive of the alphabet deployed inward this delivery network. Here is a relatively one-time fact canvass (stated book has risen substantially since then).
http://www.alizila.com/fact-sheet-cainiao-alibaba-groups-logistics-platform
Here is an article as well as video nearly Alibaba/Tabao rural service centers:
http://www.alizila.com/cainiao-alibabas-logistics-arm-opens-video
There is some testify inward this video nearly people making multiple orders every bit inward some rural centers in that location is a unmarried adult woman who places multiple orders for an entire village. The distribution middle soundless is non heavily endowed with advanced technology. There is no testify that inward whatever agency the working capital missive of the alphabet equipment at Alibaba as well as its distribution partnership comes unopen inward scale as well as character to the infrastructure of (say) UPS. However the delivery volumes are larger than UPS as well as Fedex combined as well as the job levels are similar (in aggregate).
It is worth comparing this to videos of Amazon's warehouse as well as packing system.
There is also a Fedex as well as UPS documentary on Bloomberg which gives some thought of the scale of these behemoth organisations. When this was filmed (2012) the combined book of UPS as well as Fedex was good below the book of Alibaba's delivery network. Still it is worth comparing how much working capital missive of the alphabet equipment the U.S.A. of America giants conduct maintain to how picayune is inward the Alibaba network:
At this dot I know the numbers are wonky - but working out whether this is cloth or non (or how material) volition require some fine measure techniques.
Alibaba's ain advertisement cloth contains several videos of their logistic operations. Here is a video interview of a adult woman describing the seasonal piece of work packing boxes for Singles Day.
http://www.alizila.com/chinas-1111-shopping-festival-sees-massive-sales-first-few-minutes-video
The adult woman states she volition commonly pack nearly 200 packages a hateful solar daytime but on Singles Day she volition produce 800-900. If it takes her 50 seconds to pack a bundle (reasonable looking at the process) as well as she takes five minutes intermission per hr packing 800 packages volition select nearly 12 hours. I approximate that is reasonable. But to produce the book for Singles Day would require 350 one one thousand such people just inward packaging, non fifty-fifty delivering.
The fellowship has videos of its logistics every bit well. Here is a summary video - with pictures of the delivery network:
(The master tin last found here...)
The fellowship also has b-roll material (which they license widely) which has quite extensive video of the conveyor belt systems as well as the sort.
Strangely much of the cloth involves people standing around as well as multi-handling cloth on conveyor belts rather than doing the existent role of a sorting facility (that is making choices so sorting).
Similarly in that location is b-roll cloth of packaging happening inward 1 of Tabao's merchant shops. This involves distinctly low-tech (and slow) packaging as well as sorting for Singles Day. It is soundless clearly inward component division aimed at a Western audience (and presumably Western investors) every bit the whiteboard is inward component division inward English.
We conduct maintain some information nearly the size as well as the amounts of working capital missive of the alphabet deployed inward this delivery network. Here is a relatively one-time fact canvass (stated book has risen substantially since then).
http://www.alizila.com/fact-sheet-cainiao-alibaba-groups-logistics-platform
Here is an article as well as video nearly Alibaba/Tabao rural service centers:
http://www.alizila.com/cainiao-alibabas-logistics-arm-opens-video
There is some testify inward this video nearly people making multiple orders every bit inward some rural centers in that location is a unmarried adult woman who places multiple orders for an entire village. The distribution middle soundless is non heavily endowed with advanced technology. There is no testify that inward whatever agency the working capital missive of the alphabet equipment at Alibaba as well as its distribution partnership comes unopen inward scale as well as character to the infrastructure of (say) UPS. However the delivery volumes are larger than UPS as well as Fedex combined as well as the job levels are similar (in aggregate).
It is worth comparing this to videos of Amazon's warehouse as well as packing system.
There is also a Fedex as well as UPS documentary on Bloomberg which gives some thought of the scale of these behemoth organisations. When this was filmed (2012) the combined book of UPS as well as Fedex was good below the book of Alibaba's delivery network. Still it is worth comparing how much working capital missive of the alphabet equipment the U.S.A. of America giants conduct maintain to how picayune is inward the Alibaba network:
At this dot I know the numbers are wonky - but working out whether this is cloth or non (or how material) volition require some fine measure techniques.
The ii best candidates both had expert ideas on this - but over again testability is going to last hard. I would conduct maintain ideas yesteryear electronic mail too.
Thanks.
John
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