Big Boys Ma has battled -- and beaten -- one big boy, albeit on Chinese turf. In 2002, EBay (EBAY), led by then-CEO Meg Whitman, burst into China by acquiring a local e-commerce business. Ma and his partners waived fees on their Taobao site -- letting customers do for free what EBay charged for. Ma positioned himself as the homegrown hero. “EBay is a shark in the ocean; we are a crocodile in the Yangtze River,” he told his troops. “If we fight in the ocean, we will lose, but if we fight in the river, we will win.” Ma won in 2006, when EBay announced it would close its site, which by then was unprofitable. As Alibaba grows, Ma is pushing the company outside its comfort zone. Since 2012, Alibaba has announced more than $16 billion of deals, taking stakes in U.S. ride-share service Lyft Inc. and the Singapore postal service. In China, it agreed to buy half of professional soccer team Guangzhou Evergrande. It also bought 60 percent of movie producer China Vision Media Group Ltd., which it renamed Alibaba Pictures Group Ltd. (1060) Ma’s Influence On Oct. 27, Ma told a conference in Laguna Beach, California, that he’s looking for partners in Hollywood to help acquire more content for smart phones and tablet computers. He and Apple CEO Tim Cook said at the same conference that they’re open to collaborating on projects involving mobile payments. Alibaba’s finance affiliate is expanding as well. In April, it created Zhao Cai Bao, a platform for small businesses and individuals to borrow directly from investors. In September, it acquired a bank license in Ma’s home city, Hangzhou. “You can’t exaggerate how much influence Jack has,” says says Guo Guangchang, a fellow billionaire who heads Shanghai-based conglomerate Fosun Group, which is a partner in the banking venture. ‘Customers First’ Some shareholders are leery of Ma’s omnipresence -- not least because “customers first” has become an Alibaba mantra. “Putting the shareholders first is capitalism’s biggest mistake,” Ma told Chen Xiao-Ping, a professor at the University of Washington’s Foster School of Business, last year. “Shareholders do not have a long-term vision for the company.” Ma explained his philosophy in his pre-IPO letter. The only way to ensure long-term rewards for shareholders is to sustain value for customers, making them No. 1, he wrote. Employees come next because they’re crucial to satisfying customers. “We respect and are grateful for investors who support us with their precious capital,” he wrote. And yet, Ma has made sure no outside shareholders can threaten his control, even though Japanese billionaire Masayoshi Son’s SoftBank Corp. (9984) holds 32.4 percent of the stock and Yahoo! Inc. (YHOO) owns 15 percent after the IPO. According to Ma, his management partnership ensures decisions aren’t made based on short-term revenue or profits. “It exists to safeguard our mission, values, vision and culture,” Ma wrote. Ma was diplomatic in assessing his relationship with China’s leaders in an interview with Bloomberg Television on the day of Alibaba’s IPO. “Being a global company, dealing with any government is difficult,” he said. His solution: “Always try to stay in love with the government, but don’t marry them.” The normally garrulous Ma has also said little publicly about his early life. The son of traditional musician-storytellers, he was born in 1964, two years before Mao Zedong’s regime plunged into the Great Proletarian Cultural Revolution. The anti-capitalist movement uprooted millions, slowed economic growth and threw the country into turmoil. Tour Guide When Mao died in 1976, order was slowly restored and adventurous tourists began to trickle into the country. Ma was lucky enough to live in Hangzhou, 177 kilometers (106 miles) southwest of Shanghai, where the West Lake, with its stone bridges and pagoda-studded hillsides, ranks as one of China’s prime attractions. In 1977, at the age of 13, Ma heard that foreigners had arrived in the city. For the next nine years, he woke at 5 a.m. and cycled to the Hangzhou Hotel -- now a Shangri-La -- to master English by acting as a tour guide, according to TV interviews he has given. After twice failing university entrance exams, Ma won a place at Hangzhou Teachers College. He studied English and met his future wife, Zhang Ying. Ma graduated in 1988 with a Bachelor of Arts degree in English and taught the language at Hangzhou Dianzi University. His charisma and passion for dancing and singing in English made him popular, says former colleague Yu Lili. “The first time I heard a foreign song that’s not Russian was from him,” she says. Translation Company In 1992, reformist leader Deng Xiaoping urged entrepreneurially minded Chinese to start businesses. Two years later, Ma, who was 30 at the time, quit teaching and began a translation company. He named it Haibo, meaning “vast like the sea.” The English name was Hope. To subsidize early losses, Ma bought plastic flowers and toys to sell in Hope’s office. By the end of 1994, the company had broken even. Ma had kept in touch with foreigners he’d met giving tours. In 1995, he visited Seattle and encountered his first computer. When he typed beer into a search engine, he found no reference to the beverage in Chinese. Returning to China, he created a simple Web page with his translation company’s contact number and price list. Within a day, he got five inquiries from overseas. It was then that he grasped the power of the Internet. Ma, his wife and 16 co-founders, including Vice Chairman Joe Tsai, set up Alibaba as an online yellow pages in 1999. He persuaded SoftBank, Goldman Sachs Group Inc. and other big names to help raise $25 million the next year. Yahoo! Invests In 2002, Alibaba became profitable. In 2005, at the height of his EBay war, Ma persuaded Yahoo! co-founder Jerry Yang to invest $1 billion for a 40 percent stake. However much Ma changes global commerce, his impact on his hometown of 8 million is clear. A main thoroughfare, Wenyi West Road, is now a 10-lane superhighway bordered by construction that crowds out rice paddies. Alibaba’s 150,000-square-meter (1,615,000-square-foot) campus, designed by Hassell architects, is a centerpiece. Ma monitors the well-being of his 22,000-strong global team, logging onto the digital bulletin board under his pseudonym, Feng Qingyang, a swordsman from his favorite martial arts novel, says Mary Cao, a former Alibaba executive. When employees complained online that Alibaba had stopped providing shuttle buses, Ma swiftly quelled the protests, Cao says. Rather than restoring the buses, Ma offered the vision that one day Alibaba would make employees rich enough to commute in their own cars. “It was brilliant,” she says. “He draws up blueprints to motivate people. And, of course, a lot of those goals he manages to realize in the end.”
Posted on: Mon, 10 Nov 2014 01:23:07 +0000
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