Jack Ma knows as much as anyone about how China’s middle class spends its money. What will he do with this information?
A DOZEN big screens hang on the wall. Maps flash. Numbers stream by. The Alibaba Group’s “live data monitoring room” offers a snapshot of frantic activity: Chinese firms trading with foreign ones; Chinese individuals buying clothes from each other. Perhaps half a billion people use Alibaba’s various online services. The group’s diminutive founder, Jack Ma, smiles that business is “pretty good”. Yet he is far from satisfied.
In a country where tycoons are often the children of politicians, Mr Ma stands out. He failed twice to get into college. He learned English from the radio. He stumbled on the internet during a trip to America as an interpreter in the mid-1990s. He typed the phrase “Chinese beer” into a search engine. No results appeared. He saw an opportunity.
He started Alibaba in 1999, to help small firms find customers and suppliers without going through costly middlemen. Alibaba. com now claims to have 57m users, including some in nearly every country. It is sometimes likened to eBay, but is more like an online Yellow Pages.
Related topics
* China
* Science and technology
* Internet
* E-commerce
* Business
Another venture, Taobao. com, sells to consumers. It has 300m customers and shifted $29 billion-worth of goods in 2009. It is like a scrappy cross between Amazon and eBay: it operates an online mall where vetted sellers can hawk their wares, and a site where anyone with a Chinese identity number can sell anything legal to anyone. It generates money through advertising.
Alibaba’s staff boast of the businesses they have nurtured. One Chinese village had a stack of rabbit meat, having skinned the creatures for fur. The chief asked for suggestions. A villager sold the lot on Alibaba. com. More commonly, clients
are small firms that want to link cheaply to the global market. Machine-makers in Turkey or Britain use Alibaba to find cheap suppliers in China without having to go there. Buyers can read reviews that others have written about each seller, which fosters trust, though it is far from foolproof.
The Alibaba campus in Hangzhou looks much like the offices of a zippy firm in Silicon Valley. The architecture is airy and feng shui-compliant. Employees enjoy ping-pong and free massages. Grey hairs are as rare as neckties. As is common at Chinese internet firms, a disproportionate number of senior managers are foreign-educated or have worked abroad.
Alibaba has hefty foreign backers: America’s Yahoo! and Japan’s Softbank. Yet because of where it is, it cannot operate like a Western firm. Until the mid-1990s the growth of the internet went all but unreported in China’s news media. So getting started was hard for Mr Ma. But now he sees opportunities everywhere.
China has millions of small entrepreneurs but a primitive financial system. To boost traffic through his websites, Mr Ma set up an online payments system, Alipay, in 2004. Its growth was greatly helped by the ban that China imposed, until recently, on its American rival, PayPal. Alipay says it now has 470m users worldwide and that more than 500,000 Chinese merchants accept it. In some Chinese cities people can use it to pay their utility bills.
Mr Ma has also started a service called Ali-loan. He does not lend money, but works with banks, which typically have no idea if a small borrower is creditworthy.
(No Ratings Yet)