How I cre­ated e-com­merce in China

Inc. (USA) - - LAUNCH -

com­pany in 1995, af­ter I vis­ited Seat­tle. China was not con­nected to the in­ter­net, and no­body be­lieved there was this net­work. So it was dif­fi­cult to even hire peo­ple. The first three peo­ple were me, my wife, and a guy who was a univer­sity lec­turer with me, who had a com­puter back­ground. China was start­ing to think about ex­port­ing, but small busi­nesses couldn’t go to in­ter­na­tional trade shows. So our busi­ness model was to make home­pages for Chi­nese com­pa­nies, so they could pro­mote their prod­ucts and be found by in­ter­na­tional cus­tomers.

No­body wanted to try it. But I had a friend, Mag­gie Zhou, who later be­came my sec­re­tary and now is our am­bas­sador to Aus­tralia. She worked for a ho­tel called the Wanghu [Lake­view], the first four-star ho­tel in Hangzhou. I told her man­ager that I could make the ho­tel a free home­page, “and if there are any peo­ple who come to your ho­tel through that home­page, you can pay me.” He agreed. And noth­ing hap­pened for three months.

Then the Fourth World Con­fer­ence on Women was held in Bei­jing. Sud­denly the ho­tel got a fax from sev­eral Amer­i­can ladies. They were com­ing to the con­fer­ence and us­ing the in­ter­net to search for ho­tels—and the only one listed in China was the Wanghu Ho­tel. We had to tell them that the ho­tel was more than 1,000 kilo­me­ters from Bei­jing. But they asked, “Can we stay in that ho­tel and have meet­ings?” Af­ter the con­fer­ence, they flew to Hangzhou to stay for three days. That shocked the gen­eral man­ager of the ho­tel—and then he paid us.

Even to­day, I still don’t know how to code. I re­ally don’t un­der­stand how to com­pute. But as an en­tre­pre­neur, if you don’t know some­thing, you don’t have to worry—you just have to find peo­ple who know about it. I didn’t know any­thing about fi­nanc­ing un­til I found Joseph Tsai, Alibaba’s ex­ec­u­tive vice chair­man. I don’t talk to the in­vestors a lot, be­cause Joe’s sup­posed to do that.

Don’t try to hire the best peo­ple at first. If you try to hire the best when you’re still a small com­pany, it’s like putting a Boe­ing 747 en­gine into a poor trac­tor. It won’t work. But you can hire the right peo­ple, the peo­ple who know bet­ter than you, who are pas­sion­ate about what they do, and who are open-minded about learn­ing. And then when your com­pany gets big­ger, you have to ro­tate your peo­ple through dif­fer­ent jobs. Make sure the en­gi­neers know about more than en­gi­neer­ing. Work with the en­tire staff to make sure they are the best in their field. I have a great team, be­cause they get ev­ery­thing done bet­ter than I could. So I can spend a lot of time think­ing about the fu­ture.

The per­cep­tion is that on­line, coun­ter­feit­ing is big. But I would say, to­day, it’s so much bet­ter than offline. With in­ter­net com­merce, ev­ery­thing you buy, sell, de­liver, man­u­fac­ture—we can trace all the data. We’re us­ing our tech­nol­ogy to fight against phony mer­chan­dise. In China, we de­liver up to 57 mil­lion pack­ages per day, and we had $547 bil­lion in sales on our plat­forms last year. If peo­ple buy some­thing coun­ter­feit, that makes them un­happy and it makes the brand owner un­happy and un­will­ing to part­ner with us. But we’re get­ting more and more brands to part­ner with us. This year, we’re launch­ing a huge cam­paign and work­ing with law en­force­ment to fight against man­u­fac­tur­ers that pro­duce coun­ter­feit prod­ucts, to stop that at the root.

We are the com­pany deal­ing with 10 mil­lion small busi­nesses in China alone. We can at least fig­ure out who’s buy­ing, who’s sell­ing, who’s man­u­fac­tur­ing. It is why we are chas­ing the bad ac­tors. It’s im­pos­si­ble to kill them.

Busi­ness is all about five, 10 years later. That’s why I have to travel, I have to lis­ten, and I have to think a lot of things that might seem crazy. All small busi­nesses should think out of their town, out of their city, out of their coun­try. If you’re a real en­tre­pre­neur, there is al­ways cu­rios­ity. If you don’t have cu­rios­ity, you’re a re­tired en­tre­pre­neur.

Alibaba’s ex­isted for 18 years, and we are so in­flu­en­tial in China, but no­body in Amer­ica knows us. We’ve al­ways tried to come to Amer­ica. We’re not very suc­cess­ful, but we have pa­tience. Now we say, “We do not want to make an­other Ama­zon, an­other eBay here—but we can make the small busi­nesses go to China.” I’m not re­ally that keen on mak­ing every Amer­i­can know about Alibaba, but I’m very keen on get­ting en­trepreneurs to try Alibaba. We’re not an e-com­merce com­pany—we make other peo­ple do e-com­merce. We think every com­pany should be e-com­merce.

If Ama­zon can help you, go on us­ing Ama­zon. If eBay can help you, go on us­ing eBay. What I’m telling ev­ery­body is, we should not glob­al­ize the Alibaba busi­ness. We should glob­al­ize e-com­merce.

Jack Ma built one of the world’s big­gest in­ter­net com­pa­nies with­out learn­ing how to code. The lead founder and ex­ec­u­tive chair­man of Alibaba taught him­self English by of­fer­ing tours to for­eign vis­i­tors of his home­town, Hangzhou, in eastern China. That’s where, in 1999, Ma launched Alibaba, which took in nearly $23 bil­lion last year. Now Ma is hop­ing to ex­pand his U.S. busi­ness, es­pe­cially by en­cour­ag­ing more Amer­i­can com­pa­nies to sell their goods on Alibaba’s plat­forms. –As told to Maria As­pan

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