Alibaba’s Jack Ma to step down as chair­man in Septem­ber 2019

The Myanmar Times - - World -

JACK Ma, who founded e-com­merce gi­ant Alibaba Group and helped launch China’s on­line re­tail­ing boom, an­nounced Mon­day that he will step down as the com­pany’s chair­man next Septem­ber.

In a let­ter re­leased by Alibaba, Ma said he will be suc­ceeded by CEO Daniel Zhang, an 11-year veteran of the com­pany. Ma handed over the CEO post to Zhang in 2013 as part of what he said was a long-planned suc­ces­sion.

Ma, a for­mer English teacher, founded Alibaba in 1999 in an apart­ment in the eastern city of Hangzhou to con­nect Chi­nese ex­porters with for­eign re­tail­ers. It ex­panded into con­sumer re­tail­ing, be­com­ing the world’s biggest e-com­merce com­pany by to­tal value of goods sold, as well as on­line fi­nance, cloud com­put­ing and other ser­vices.

Ma, who turned 54 on Mon­day, be­came one of China’s most fa­mous en­trepreneurs and one of the world’s rich­est. The Hu­run Re­port, which fol­lows China’s wealthy, es­ti­mates his net worth at $37 bil­lion.

Alibaba’s $25 bil­lion ini­tial public stock of­fer­ing on Wall Street in 2014 is the biggest to date by a Chi­nese com­pany.

Alibaba said Ma will re­main a mem­ber of the Alibaba Part­ner­ship, a group of 36 peo­ple with the right to nom­i­nate a ma­jor­ity of its board of di­rec­tors. That ar­range­ment lim­its share­holder con­trol, but Ma has de­fended it as a way to keep Alibaba fo­cused on long-term de­vel­op­ment.

“This tran­si­tion demon­strates that Alibaba has stepped up to the next level of cor­po­rate gov­er­nance from a com­pany that re­lies on in­di­vid­u­als, to one built on sys­tems of or­ga­ni­za­tional ex­cel­lence and a cul­ture of tal­ent de­vel­op­ment,” said Ma’s let­ter.

Ma said he wants to “re­turn to ed­u­ca­tion” but gave no de­tails.

Alibaba is part of a group of com­pa­nies in­clud­ing games and so­cial me­dia gi­ant Ten­cent Hold­ing Ltd., search en­gine Inc. and e-com­merce ri­val that have rev­o­lu­tion­ized shop­ping, en­ter­tain­ment and con­sumer ser­vices in China.

E-com­merce sales in China rose 32.2 per­cent last year to 7.2 tril­lion yuan ($1.1 tril­lion), ac­count­ing for 20 per­cent of to­tal re­tail spend­ing.

Alibaba was founded at a time when few Chi­nese used the in­ter­net. As in­ter­net use spread, the com­pany ex­panded into re­tail­ing and ser­vices. Few Chi­nese used credit cards, so Alibaba cre­ated its own on­line pay­ments sys­tem, Ali­pay.

Zhang, Ma’s planned suc­ces­sor, joined Alibaba in 2007 af­ter work­ing at Shanda En­ter­tain­ment, an on­line games com­pany. Zhang served as pres­i­dent of Alibaba’s con­sumer-fo­cused busi­ness unit.

Ma, known in Chi­nese as Ma Yun, ap­pears reg­u­larly on tele­vi­sion. At an an­nual Alibaba em­ployee fes­ti­val in Hanzhou, he has sung pop songs in cos­tumes that in­cluded blonde wigs and leather jack­ets. He pokes fun at his own ap­pear­ance, say­ing his over­size head and an­gu­lar fea­tures make him look like the alien in di­rec­tor Steven Spiel­berg’s movie “E.T. The Ex­trater­res­trial.”

Alibaba raised $5 mil­lion from in­vestors in­clud­ing Gold­man Sachs and $20 mil­lion from Japan’s Soft­bank in 1999.

The next year, Alibaba faced its biggest threat when eBay ac­quired EachNet, which had 80 per­cent of China’s small re­tail e-com­merce mar­ket.

Ma fought back by launch­ing Taobao, an eBay-style con­sumer-to­con­sumer site. By 2006, Ma had won; eBay gave up and turned over its China op­er­a­tion to a lo­cal part­ner.

In 2005, Ya­hoo Inc. paid $1 bil­lion for 40 per­cent of Alibaba and turned over con­trol of Ya­hoo China. Alibaba bought back half of Ya­hoo’s stake for $7.1 bil­lion in 2011 and the U.S. com­pany made bil­lions more from the 2014 IPO.

Ma’s suc­cess was tem­pered by complaints Alibaba al­lowed coun­ter­feit­ers to thrive on its sales plat­forms.

The U.S. Com­merce De­part­ment cited and Taobao on its an­nual list of “no­to­ri­ous mar­kets” from 2008 to 2011. Both were later re­moved but complaints from mak­ers of lux­ury goods and other brand own­ers in­ten­si­fied.

The lux­ury com­pany Ker­ing, owner of brands in­clud­ing Gucci and Saint Lau­rent, ac­cused Alibaba in a 2015 law­suit of fa­cil­i­tat­ing coun­ter­feit sales. The two sides set­tled the dis­pute last year with an agree­ment to co­op­er­ate in com­bat­ing traf­fick­ing in fakes.

Also in 2015, a Chi­nese Cabi­net agency ac­cused Alibaba of prof­it­ing from mis­lead­ing ad­ver­tis­ing and fail­ing to deal ef­fec­tively with fraud. In a re­flec­tion of the im­por­tance of Alibaba’s suc­cess to com­mu­nist lead­ers, the agency said its re­port was writ­ten in mid-2014 but the re­lease was de­layed to avoid dis­rupt­ing the IPO.

Ali­pay be­came a free­stand­ing com­pany, Ant Fi­nan­cial, in 2014. Alibaba also has ex­panded into en­ter­tain­ment, set up its own film stu­dio and in­vested in lo­gis­tics and de­liv­ery ser­vices.

Alibaba re­ported profit last year of $9.8 bil­lion. It said the to­tal value of goods sold across all of its plat­forms rose 28 per­cent over 2016 to 4.8 tril­lion yuan ($768 bil­lion).

In 2011, Alibaba faced complaints it had trans­ferred con­trol over Ali­pay to a com­pany con­trolled by Ma with­out im­me­di­ately in­form­ing share­hold­ers in­clud­ing Ya­hoo and Soft­back.

Alibaba said the move was re­quired to com­ply with Chi­nese reg­u­la­tions, but some fi­nan­cial an­a­lysts said the com­pany was paid too lit­tle. The dis­pute was later re­solved by Alibaba, Ya­hoo and Soft­bank. – AP

Photo: AP

In this June 25, 2018, photo, Jack Ma, chair­man of Alibaba Group at­tends the cer­e­mony to launch a blockchain-base re­mit­tance solution in Hong Kong.

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