China’s pied piper
Sep 21st 2006
From The Economist print edition
Jack Ma is attracting a following among entrepreneurs in China and internet companies worldwide
ON A rainy weekend this month 10,000 businessmen, hobby traders and “netheads” gathered in Hangzhou, a pretty Chinese city near Shanghai, to talk about e-commerce. Most went to meet and swap tips with other online traders. All came to the “Alifest” to sit at the feet of Jack Ma, a pixie-sized, boyish 42-year-old who is the founder of Alibaba, an e-commerce firm, and is regarded as the godfather of the internet in China. In a country where businessmen are viewed with suspicion, his popularity is unusual. When he was invited recently to speak in Beijing’s Great Hall of the People, Mr Ma needed six bodyguards to escape a mob of online traders waiting outside to give him a hug.
Mr Ma’s rock-star status reflects how he has enabled thousands of his countrymen to become their own bosses, build businesses and make money—a dream ingrained in Chinese culture but repressed by decades of Communist antipathy to private enterprise. Alibaba has become the world’s largest online business-to-business (B2B) marketplace, Asia’s most popular online auction site and, as a result of its acquisition of Yahoo! China, the 12th most popular website in the world. That combination makes Alibaba one of the few credible challengers to the global online elite of Google, eBay, Yahoo! and Amazon.
马云摇滚巨星般的地位来自于其将众多国人“自己当老板，创业赚钱”的梦想变为现实。这个观念曾深深扎根于每个中国人的心底，但在共产党“消除私有经济”的政策下的几十来中被压制。阿里巴巴已经是世界上最大的B2B网络交易平台及亚洲最大的网拍站点，在成功地收购了雅虎中国后，又成为世界第12大流量网站。此次并购使它有实力和少数几个网络巨头，如Google,eBay,雅虎和Amazon同台竞技。Alibaba is far from being just a Chinese knock-off of these American giants. Indeed, they have borrowed ideas from him. “Jack is not just a Chinese visionary, but a global one. Western companies are taking pages from the Alibaba book,” says Bob Peck, an analyst at Bear Stearns. At Alibaba’s heart sit two B2B websites (alibaba.com and china.alibaba.com), one a marketplace for firms from across the world to trade in English, the other a domestic Chinese service. Rival e-commerce outfits, such as America’s Ariba and Commerce One, sought to cut multinationals’ procurement costs. In contrast, Alibaba’s intention was to build markets for China’s vast number of small and medium-sized enterprises, which make everything from cufflinks to motorcycles, by allowing them to trade with each other and linking them to global supply chains. Today, traders in America buy from Alibaba and resell on eBay.
阿里巴巴远不是那些美国巨头的简单模仿者，事实上，反是后者从前者身上学到了不少点子。“马云不仅是在中国，而且在世界范围来看也是具有远见卓识的领导者。西方公司从阿里巴巴的教科书中受益良多”，Bob Peck,贝尔史登公司的一位分析师说。阿里巴巴有两个B2B核心网站：alibaba.com和china.alibaba.com,一个是服务于全球交易的以英文为基础的网站，一个是中国的区域网站。电子商务领域的竞争者，如美国的Ariba和Commerce One, 其公司的定位是为跨国公司的全球采购节省成本。而阿里巴巴的服务对象则是数量巨大的国内中小企业，使他们之间相互交易并将其纳入世界供应链的一部分，产品范围从袖扣到摩托车，几乎无所不包。如今的美国买家从阿里巴巴上采购，倒手到eBay进行销售。
Mr Ma has also led the charge into online communities and social networking, both now booming areas. In 2003 he added a consumer auction site, Taobao, that allowed instant-messaging—a feature later added to his business sites. In contrast with eBay’s relative anonymity, Taobao lets buyers and sellers get chummy through messaging and voicemail, and by posting photographs and personal details on the site. Turning e-commerce into a community of “friends” has been critical in a country beset by a lack of trust. And with 70% of China’s web users aged under 30, Taobao’s informal, blog-like format struck a chord—attracting more than 20m users. Many have now gone professional, buying goods wholesale on Alibaba and reselling them on Taobao. The story goes that, shortly after visiting Alibaba’s offices and seeing Taobao, Meg Whitman, eBay’s boss, bought Skype, an internet-telephony start-up, for its instant-messaging.
马云同时还涉足于网络社区(online communities )和社交网络(social networking)，这两个渐渐兴盛起来的领域。03年他新增了个人消费者的竞拍网站，淘宝网，并引进即时交谈(instant messaging)功能，随后将此功能也运用在其商业站点上。与Ebay的匿名交易不同的是，淘宝网让买家和卖家在网上张贴照片和个人资料，通过互发信息和音频交谈等方式相互熟悉起来。将电子商务转换为社区“老友”的办法，在当今的中国来说是相当重要的，因为中国人之间普遍缺失信任感。超过70%的中国网民年龄在30岁以下，淘宝网的这种非正式，类似于博客形式的论坛符合他们的胃口—吸引了超过2千万的用户。很多人以此为生。他们在阿里巴巴进行批发，然后转手到淘宝网进行销售。据说，eBay的老板梅格·惠特曼参观阿里巴巴的办公室并注意到了淘宝网后，，不久即买下了一家提供网络电话服务的新公司Skype，作为其提供网上即时通讯的工具。
Alibaba has also outflanked the opposition in online payments. Aware that most Chinese do not have credit cards, Mr Ma introduced AliPay, a system that keeps cash in escrow until goods arrive. That trick for getting round settlement risk was later adopted in China by eBay. China’s powerful banking regulator has a hawkish eye on AliPay, which is, in effect, an online bank with thousands of credit histories (something mainland banks crave). Taobao’s success has been startling. Its market share jumped from 8% to 59% between 2003 and 2005, while eBay China’s slid from 79% to 36%. Mr Ma trumpets that it is “game over” for eBay China. Many industry watchers expect eBay to retreat and sell out to a local outfit such as Tencent (a rising star in auctions) or Alibaba itself—as Yahoo! China did.
Mr Ma is also at the forefront of the trend to integrate paid search with e-commerce. Alibaba’s takeover of Yahoo! China last October gave the firm a search engine just as Google was demonstrating the huge potential of paid search, and the deal anticipated eBay’s link-ups with portals (Yahoo! in America, and Google elsewhere). Baidu, China’s main search engine, is a strong rival. But online advertising is surging in China and small firms are the biggest users of paid search, giving Alibaba an edge.
Keep it simple
Mr Ma seldom mentions technology. Whereas most internet entrepreneurs are geeks (think of Yahoo!’s or Google’s founders), Mr Ma first touched a computer in 1995 on a trip to Seattle. “Someone as dumb as me should be able to use technology,” he says. He insists on simplicity. A new feature is rejected unless he can understand and use it. Mr Ma’s approach to running the company is similarly independent. He reads neither business books nor case studies, and ascribes Alibaba’s survival and success to the fact that he “knew nothing about technology, we didn’t have a plan and we didn’t have any money.” In truth, Mr Ma had powerful backers early on, including Goldman Sachs and Softbank. Yahoo!’s Jerry Yang—who joined Mr Ma at the Alifest—is also a longtime friend. In any case, he has money aplenty today: as part of its takeover by Alibaba, Yahoo! paid $1 billion for a 40% stake in the company.
Only one thing is missing: profits. As the boss of a private company in no rush to join the stockmarket, Mr Ma is relaxed. Revenues should double to more than $200m this year. But Alibaba has so far pursued market share rather than revenue. The global business site charges its users, but Taobao does not; an attempt to do so this year failed. Mr Ma says it is too early: only 30m of China’s 120m online users have bought anything online. He wants to help the market grow—creating 1m jobs in China in the next three years—not stifle it with charges. He will have to tackle profitability if he is really to call the tune.