“An engrossing, insider’s account of how a teacher built one of the world’s most valuable
companies—rivaling Walmart & Amazon—and forever reshaped the global economy.”
This is the most recent testimony to the phenomenon that is Alibaba, the dream child of an English teacher turned entrepreneur. Described as ‘A Rockefeller of his age’ Jack Ma founded Alibaba and built it as one of the world’s largest companies, an e-commerce empire catering to hundreds of millions of Chinese online customers. Comments on the book: Alibaba: The House That Jack Ma Built pay tribute to the author for his engagement with the company and insights into the character of the man who fostered its rise:
“This absorbing and well-written portrayal of Ma’s character, and his role in Alibaba’s development will appeal to a wide range of readers.” Library Journal
“A clean and compelling narrative - tells the story with flair.” Wall Street Journal
“A fascinating new book.” The Economist
Duncan Clark, the author of the book, first met Ma in 1999 and through exclusive interviews was granted access to a wealth of new material. Written from the perspective of an early advisor to the company and having spent twenty years chronicling the internet’s impact on China, Clark has created an authoritative account of the ‘House’ that Jack Ma built. A British citizen who first came to China in 1994, Clark learned the language and stayed for twenty years. His background as an investment banker specializing in telecommunications at Morgan Stanley in London and Hong Kong helped him understand in the mid-1990s that the China online market was about to take off. He opened a consultancy firm, BDA, which helped raise money for the major telecom operators China Mobile, China Unicom and China Telecom. Today, Clark is regarded in Beijing as an accomplished commentator on China’s rapidly transforming internet technology world. Clark is chairman of BDA Credit Fang Lei.
The account provides insights into the questions prospective entrepreneurs might ask, namely: How did Ma overcome his humble origins and early failures to achieve massive success with Alibaba? How did he outsmart his rivals from China and Silicon Valley? Can Alibaba maintain its 80% market share in the face of increasing competition? How does the Chinese government view the rise of Ma’s empire? Are there limits to Alibaba’s ambitions?
An interesting anecdote describes how Jack Ma first found the incentive for internet marketing. As an English translator, he got the chance to travel to Seattle U.S. in the early 1990s and had to use the internet for the first time. Told that one could find anything in the world online, he searched for “beer”. He found American beer, German beer but no access to Chinese beer. “His country was, it seemed, living in the dark ages. That gave him the inspiration he needed.”
Ma founded Alibaba over seventeen years ago, employs over 38,000 people, and is a listed company on the NYSE. It has experienced lots of ups and downs, both as a private and a public company, and gone through many reorganizations. Since Ma himself does not have a tech background unlike, say, Robin Li at Baidu, he has had to acquiesce to colleagues who do. Clark observes that Alibaba is more of a commerce company than a tech company, although its future is increasingly one in which technology plays a leading role.
Alibaba, is Ma’s third business venture, but having worked as a civil servant in Beijing, he gained valuable insights into the crossover of business and politics in China. He aims to expand his empire beyond e-commerce into areas such as finance. However, Ma has already encountered powerful vested interests such as opposition from state-owned banks alarmed by the rapid growth of his Money market fund or plans for an online bank.
Clark once described Jack Ma as someone who likes to cultivate the personal of an “outsize personality”. In response to the suggestion that he is at risk in having too high a profile in China and being taken down, Clark observes that: “Executives who say or do the wrong thing are always at risk. I titled the last chapter of my book ‘Icon or Icarus’.’’ While acknowledging Ma has an outsize personality and a large public following, Clark notes that he has been careful “not to fall foul of the authorities”. If anything, he has positioned Alibaba as a useful ally as the government attempts to put Chinese consumers to the fore. ‘Spend more, save less’ is the new mantra. Alibaba, and the power of the Internet, are “shiny objects that the government can point to”.
Jack Ma’s enterprising harnessing of the Internet for commercial purposes is frequently compared to founding fathers such as Jeff Bezos and Mark Zuckerberg – even Bill Gates and Steve Jobs. But Sir Martin Sorrell, CEO of WPP is quoted as saying: “Anybody who thinks the Chinese just copy or steal technology from the West should read this book and think again. Jack Ma is part Bill Gates, part Steve Jobs, part Larry Page, part Sergey Brin, and part Mark Zuckerberg, all rolled into one.” Clark describes Ma as “an entrepreneur’s entrepreneur: He’s not a tech guy, he didn’t go to Harvard.” In contrast, Mark Zuckerberg having a tech background, leveraged his assets and with good timing and while at Harvard built a massive and almost global social business. However, China will likely remain beyond Facebook’s reach. China has Tencent’s WeChat which is a dominant player in China already, superior in some important ways to Facebook especially in mobile technology. Clark has no doubt that Jack Ma and Mark Zuckerberg have explored how they might work together, not least because Tencent is a formidable competitor to Alibaba in social and mobile technology.
James Fallows describes in an article for the The Atlantic April 11, 2016 how he came to know Duncan Clark and that he was writing a biography of Jack Ma, and sent him questions that his portrait of Jack Ma provoked. Fallows notes that Clark singled out the familiar "Alibaba is the Chinese version of Amazon" saying that it both clarifies and misleads. While Clark understands the common perception that Alibaba is the Amazon of China, he declares emphatically “Alibaba is not the Amazon of China. Alibaba is designed as a platform for small entrepreneurs and, more recently, large brands to reach millions of consumers online. Alibaba does not hold inventory, allowing it to scale at a pace greater than Amazon.” One source quoted that Jack Ma in 2014 had made more money in Alibaba in the last 90 days than Amazon had made in the last 20 years. Yet Alibaba and Amazon share some important qualities. Both companies insist on putting the customer first. Jack Ma’s philosophy: “Customer first, employees second, shareholders third” meant Alibaba offered many of its services free of charge while eBay asserted that “free is not a business model”. Alibaba used this to force eBay out of the China market for good.
In background terms, Jack Ma came from humble beginnings. He struggled with mathematics only just “squeaking into a local college in his hometown.” He started his career as an English teacher. Jeff Bezos, the founder of Amazon, was the son of an oil executive. He excelled at Princeton and worked on Wall Street. Although the companies they founded have evolved in different ways, Jack Ma and Jeff Bezos both started out by identifying a market opportunity that would later seem obvious. Whereas Bezos used his analytical skills to conclude that the Internet could disrupt the market for books, Ma used his gut instincts realizing that it could open up new markets overseas for the small traders and manufacturers he lived amongst, people he understood all too well from having previously supplemented his meager earnings as an English teacher by buying and selling plastic carpets on the streets.
The book recounts a little-known story about Jack’s early friendship with an Australian pen pal, David Morley and his father Ken Morley. Ken Morley was a Communist. He was a union organizer who had brought his family to China in 1980 to see “the socialist paradise”. The irony of this, Ken himself had said, he may have created “a capitalist icon”, but it wasn’t his intention. He has a lot of affection for Jack. They helped teach him English and even bought his first apartment. David Morley provided some early photos of Jack for this book.
Duncan Clark also benefited from the support gleaned from Chinese speaking contacts for his research on Alibaba and Jack Ma. He initially thought he would be able to find sources through Chinese-language biographies but realized quickly that he would have to do the research himself. A classmate from Morgan Stanley and the first investor in Alibaba, Shirley Lin, was particularly helpful. Another friend Shao Bo, the founder of Eachnet, an early rival of Alibaba contributed to the task and Clark amusingly refers to their ongoing friendship: “We play tennis together. He still beats me.”
Alibaba, an unusual name for a Chinese company, was chosen because of its association with the story of “Alibaba and the Forty Thieves” in which the words “Open Sesame!” reveal a chamber of treasures. In this sense, the metaphor represents an open sesame to fortune for small businesses. However, when the ‘forty thieves’ are found to be engaging in counterfeiting, the company’s image is tarnished. In the first chapter of his book, Clark addresses the issue of counterfeiting on Taobao admitting: “Sales by merchants of pirated goods on Taobao helped boost the early popularity of the website and build the economy on the way to thirty-two per cent revenue growth for the fourth quarter. It's also helped build Jack Ma's worth to about $US29 billion.” In January 2015, the Chinese government criticized the firm for not doing enough to combat fakes. An Alibaba spokesman has said Taobao is “committed to the protection of intellectual property rights and the fight against counterfeiting”. It promises that after the marketplace receives notification of suspicious product listings it reviews and removes those that violate the law or Alibaba’s policies. The company tries to review and remove suspect listings within a day. Three years ago, just as Ma was preparing Alibaba for a US float, he described counterfeiting as "a cancer we have to deal with". The company later started working with the IACC on what the organization later called its MarketSafe program, set up specifically to target piracy on Alibaba sites. According to the IACC: "Through the program, the IACC and its participating members work to identify and take down infringing listings on Taobao and Tmall via an expedited removal procedure." Alibaba announced it would formally join the IACC, becoming the first online retailer to join the likes of Apple, 21st Century Fox and Harley Davidson in the global lobby group.
In a bizarre twist to the publication Clark’s book, it was revealed that less than two weeks after hitting U.S. bookstores, copies had been pirated; ironically on no other platform than Alibaba’s own e-commerce marketplace, Taobao. These versions were for sale for 3 to 4 yuan ($0.43 to $0.61) and offered a link for downloading an electronic version of the book. In the U.S. the book retails for $17.96 on Amazon. No details were available on the identity of the merchant selling the pirated versions of the book. Alibaba responded that pirated versions of the book have been quickly removed from the marketplace. Clark has been relatively sanguine about prospects for genuine sales: “Obviously there’s a huge amount of interest in Jack Ma and the Alibaba story in mainland China where’s he’s a home-grown hero to many.” Clark said a Chinese version of his book will be published in August by CITIC press, and that there will be a multicity book tour in mainland China. Clark, also posted the CITIC press announcement on his Facebook and Twitter pages and thanked Alibaba for “speedily taking down Taobao links to pirated drafts of my book. Legit Chinese version is on the way!”
