How Alibaba said “open sesame” to a powerful new marketing tool

Alibaba is the Amazon of China. Like its American counterpart, it’s a multi-billion-dollar company offering a vast array of retail operation, cloud computing, and entertainment services that make it a global leader. And thanks to one of Gies’ newest faculty members, it now has a powerful new tool in its arsenal that could unlock a whole new revenue stream.

For two years, Brian Han worked at the company’s headquarters in Hangzhou, China, in an applied field experiment exploring new business models. His efforts focused on cross-sampling, a method of marketing that encourages customers to try new products by providing a free sample related to one they purchase.

“It’s similar to a recommendation system, but it’s different, because we’re offering physical products you can touch and feel,” said Han, an assistant professor in the Department of Business Administration. “The platform packages these things together, so that the free samples can go across categories.” By charging a small fee for the service, Alibaba can generate a whole new revenue stream while providing a valuable service to its commercial customers.

Brian Han enjoys solving problems. It’s why he loves exploring how information technology and operations improve firms’ performance, and why he’ll be teaching a course on the topic at Gies. It’s not that he doesn’t appreciate the theory behind accounting and finance; but for him, there’s nothing quite like rolling up your sleeves and rolling out solutions that solve a pressing need.

That’s probably why his other research interest is data-driven optimization. It’s a tool he recently used to help Yale New Haven Hospital more efficiently deploy medical intervention (e.g., drugs) that have shown promise in clinical trials. While trials often illustrate the positive benefits of a new drug, they don’t always publish their underlying data. That’s a problem for hospitals outside the trial when it comes to implementation because everyone responds differently to medications. That means a drug that might be 80% effective in a trial might be ineffective or even harmful if randomly applied to a different group of patients. To solve that dilemma, Han turned to operations research, particularly robust optimization.

It turns out, you don’t need all of the underlying data to achieve the same results. “What we established is that if you can exactly match the demographic information of your target population with the original study proposition, you can at least have the same results,” said Han. “It could be better, but it couldn’t be worse.”

Han looks forward to sharing insights like these with new students. And he’s excited to do it at Gies, because of the flexibility the College offers. “What I really like about Gies is the environment that they’ve provided for me,” said Han, who was impressed both by the school’s resources and the amazing faculty on staff. “The most valuable thing for me is the freedom to pursue the things I’m passionate about. I feel like I can do anything at Gies.”

Han, who recently completed a PhD in data sciences and operations at USC’s Marshall School of Business, hopes to help students find their passion as well. At Gies, students are encouraged to explore new ideas and solve problems. They don’t have to check their passions and causes at the door; they’re free to put their big dreams into action. That takes patience, guidance, and a wealth of keen insights. Han also hopes to sprinkle in a healthy dose of inspiration by inviting friends from the industry who can help students see how the skills they acquire at Gies will actually be used in life. If he’s successful, Han says his students will leave his class with the two things that all good business leaders need — a vision and the tools they need to make that vision a reality.