Tag Archives: alibaba

Jack vs Jeff: The two biggest ecommerce billionaires in the world are total opposites

 

In 1990, Jack Ma was teaching English to a group of university students at Hangzhou Dianzi University. Who would have thought that, 24 years later, he would be China’s richest man?

In that same year, Jeff Bezos was working at D.E. Shaw & Co., an investment management firm based out of New York City. After graduating summa cum laude from Princeton university with a Bachelor’s degree in computer science and electrical engineering, there was no doubt Bezos would end up in tech, it was just a matter of time.

Years later, both of them would come up with similar names for their companies. Bezos wanted Cadabra, a name that signified magic. Ma wanted Alibaba, hoping that the name would open doors with an “open sesame”. But that might be as similar as they can get: ecommerce and magic.

These origin stories are tell-tale signs of two diverging philosophies and the companies they gave birth to. And yet they meet in some inroads. Just one month after Alibaba’s IPO, let’s take a deeper look at the two founders and the companies that are destined to shape the future of online retail.

Putting customers first?

Amazon is notorious for its obsession with customers. In fact, it’s Bezos’ go-to mantra and arguably his number one rule when it comes to how the culture of Amazon should be set. Bezos is a customer-centric founder:

We have so many customers who treat us so well, and we have the right kind of culture that obsesses over the customer. If there’s one reason we have done better than of our peers in the Internet space over the last six years, it is because we have focused like a laser on customer experience, and that really does matter, I think, in any business. It certainly matters online, where word of mouth is so very, very powerful.

But Jack Ma has a slightly different angle. Ma told CNBC newscasters, minutes after Alibaba listed on the New York Stock Exchange on September 22, “Customers first, employees second, and shareholders third.” What the newscasters didn’t realize was that when Ma thinks of customers, he’s not talking about everyday consumers in the same way as Bezos. To Ma, his customers are the small businesses that use the firm’s Taobao and Tmall marketplaces. Speaking at Stanford in 2013, Ma outlined this clearly:

Alibaba is not a company for consumers […] I knew that we didn’t have the right DNA to become a consumer company. The world is changing very fast, and it’s hard to gauge consumers’ needs. Small businesses know more about the needs of their customers. We had to empower our power sellers and our SME’s to support their customers.

This divergence is profoundly clear when you dig into stories about Amazon’s dealings with small businesses. In 2006, Amazon throttled the sales of a 200-year-old German business selling knives. In 2007, when Amazon released the Kindle, it didn’t reveal the US$9.99 price to publishers until the day of the release. And just this year, Amazon is making it harder for customers to buy books from publisher, Hachette, all because, as Forbes notes, “Amazon wants a bigger piece of its suppliers’ profit margins to purportedly pass on to its customers in the form of lower prices.” Amazon functions like a monopolistic empire.

You just won’t see this kind of behavior at Alibaba. The philosophy is poles apart from Amazon’s. This is what Jack Ma had to say on this very topic at Stanford in 2011:

I believe in the internet time, there is no empire thinking. I hate the empire. Empire thinking means join me or I’ll kill you. And I don’t like that model. I believe the ecosystem. […] I believe everybody should be helping each other, connecting each other. It’s an ecosystem. So Taobao become so big, so fast, and I worry about that. Give the industry some opportunity, give the competitors some opportunity.

See: Jack Ma’s Last Speech as Alibaba CEO
## No money, no technology, and no plans

When you dig deeper into the business philosophies of these two giants, you start to see even deeper discrepancies. When Ma spoke again at Stanford in 2013, he outlined some peculiaritiesof Alibaba’s founding story.

The ignorant are not afraid. There were three reasons behind our success. They were very valid points. First, we had no money. Second, we didn’t understand technology. Third, we never planned.

Alibaba started with RMB 50,000. That’s about US$8,150. When Amazon started out, Bezos got US$300,000 from his parents.

Ma was an English teacher before starting his entrepreneurial journey. Bezos graduated from an Ivy League school.

In contrast to Ma’s “no plan” (he goes into it much deeper here), Bezos is the meticulous planner. In a short video in 2009, following the acquisition of Zappos, Bezos outlines the “only things he knows.” The list includes: obsessing over customers, inventing, and thinking long-term. Bezos adds:

Any company that wants to invent on behalf of customers has to be willing to think long-term. And it’s actually much rarer than you might think. I find that most of the initiatives that we undertake may take five to seven years before they pay any dividends for the company […] It requires and allows a willingness to be misunderstood.

But in one or two ways, these tech titans are growing. Today, Ma’s net worth is US$21.8 billion, making him the 37th richest person in the world. Bezos is worth US$30.5 billion, putting him 21st on the list.

Epilogue: Beyond Alibaba, beyond Amazon, beyond money, beyond humanity

https://www.techinasia.com/jack-ma-jeff-bezos-amazon-alibaba-billionaires-ecommerce/

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Alibaba IPO: 5 Reasons Why China’s E-Commerce Giant Is Going Public

Until this week, few Americans — outside of tech and investment circles — were overly familiar with Alibaba. But the Chinese company is fast becoming a household name as it prepares to launch an initial public offering that may be the largest in U.S. history.

Alibaba Group Holding Ltd. was founded in 1999 by flamboyant entrepreneur Jack Ma, who last week celebrated his 50th birthday. Think of it as Amazon, eBay and PayPal rolled into one. Alibaba.com connects buyers and sellers of industrial and commercial goods and services in China. Its Taobao unit is the country’s largest online shopping portal, and its Tmall group is China’s biggest business-to-consumer platform.

In the second quarter, Alibaba posted revenue of $2.5 billion, up 46 percent from the previous year.

So why does Ma want to become answerable to a board of directors, regulators, and, ultimately shareholders by going public with an IPO slated for Friday? Alibaba’s filings with the U.S. Securities and Exchange Commission shed little light on his motivations.

“We plan to use the net proceeds from this offering for general corporate purposes,” Alibaba said in boilerplate language included in its F-1 registration document.

But clues to Ma’s goals can be gleaned from his past statements, from sources close to the company, and a look at Alibaba’s future opportunities — and current weaknesses.

Here are five reasons why Alibaba may be about to launch an IPO that analysts estimate could raise as much as $20 billion to $25 billion:

http://www.ibtimes.com/alibaba-ipo-5-reasons-why-chinas-e-commerce-giant-going-public-1690759

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Why VC firms missed out on Alibaba and other big Chinese opportunities

Alibaba’s recently announced $16 billion IPO has VentureBeat reporters scratching our collective head: Why weren’t more U.S. growth funds involved in Alibaba’s rise to domination?

Alibaba has a hand in every game imaginable: Social networking, payments, travel, online commerce, and dozens more. Its own list of investments rivals that of any major VC firm.

But somehow, while one U.S. private equity firm (Silver Lake Partners) and Yahoo participated in the mega-giant’s funding, most American firms sat it out.

http://venturebeat.com/

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How An IPO Actually Works

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Jack Ma is the founder, chairman and CEO of the Alibaba Group.

Jack Ma is the main founder of Alibaba Group, China’s largest e-commerce business whose IPO may be one of the world’s largest this year if it finally happens. After failing to win Hong Kong regulatory support for a listing under its current shareholder structure last year, the company held off on an expected IPO that could value it at as much as $150 billion. Besides Ma and vice chairman Joseph Tsai both members of this year’s Forbes Billionaires list–key investors include Yahoo and Japan’s Softbank. Elfish Ma, an Internet icon for years, is a former English teacher and active philanthropist.[*]

In May 2009, Ma was honored by Time magazine with inclusion into the Time 100 list of the world’s 100 most influential people. In reporting Mr. Ma’s accomplishments, Adi Ignatius, former Time senior editor and editor-in-chief of the Harvard Business Review, said, “Meeting Jack Ma, you might be forgiven for thinking he’s still an English teacher. The Chinese Internet entrepreneur is soft-spoken and elflike — and he speaks really good English. But as founder and CEO of Alibaba.com, Ma, 44, runs one of the world’s biggest B2B online marketplaces, an eBay for companies doing international trade.  Alibaba and Ma’s consumer-auction website, Taobao.com, did so well that in 2006, eBay shut down its own site in China.” He was also chosen as one of “China’s Most Powerful People” by BusinessWeek, and one of the “Top 10 Most Respected Entrepreneurs in China” by Forbes China in 2009. Ma received the “2009 CCTV Economic Person of the Year: Business Leaders of the Decade Award”.

In 2010, Ma was selected by Forbes Asia as one of “Asia’s Heroes of Philanthropy” for his contribution to disaster relief and poverty.

It is clear that Jack has clearly found an algorithm of success that works. In addition he appears to seriously consider making it possible for his whole team to win as well.

Jack Ma isn’t a self obsessed silicon valley kid that is all about the money and personal fame. He seems to be looking beyond the cash and prizes and establishing real sustaining practices to build businesses, creating opportunities for employees to be happy at their jobs and developing products that are useful. [*]

Here are several quotes and ideas of Jack Ma:

v  Customers should be number 1, Employees number 2, and then only your Shareholders come at number 3.

v  Your attitude determines your altitude.

v  Don’t make complaining and whining a habit

v  A real businessman or entrepreneur has no enemies. Once he understands this, the sky’s the limit.

v  Always let your employees come to work with a smile.

v  Rather than having small smart tricks to get by, focus on holding on and persevering.

v  You should find someone who has complementary skills to start a company with. You shouldn’t necessarily look for someone successful. Find the right people, not the best people

v  A leader should have higher endurance and ability to accept and embrace failure

Only fools use their mouth to speak. A smart man uses his brain, and a wise man uses his heart.[*]

 

Jack Ma’s advice to entrepreneurs

  1. The opportunities that everyone cannot see are the real opportunities.
  2. Always let your employees come to work with a smile.
  3. Customers should be number 1, Employees number 2, and then only your Shareholders come at number 3.
  4. Adopt and change before any major trends or changes.
  5. Forget the money; Forget about earning money.
  6. Rather than having small smart tricks to get by, focus on holding on and persevering.
  7. Your attitude determines your altitude. )[*]

Jack Ma on entrepreneurship

  1. A great opportunity is often hard to be explained clearly; things that can be explained clearly are often not the best opportunities.
  2. You should find someone who has complementary skills to start a company with. You shouldn’t necessarily look for someone successful. Find the right people, not the best people.
  3. The most unreliable thing in this world is human relationships.
  4. “Free” is the most expensive word.
  5. Today is cruel, tomorrow will be worse, but the day after tomorrow will be beautiful.[*]

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Meet Alibaba – and five other billion-dollar giants who will soon be taking over the world

What’s Alibaba? It’s one of dozens of internet giants you haven’t heard of.

There’s been a big stir this week, caused by the float of Alibaba.com, a website that most of us have never heard of, that is about to have a mammoth IPO on the New York stock exchange. Analysts are talking about a £10 billion valuation.

While big tech floats are nothing new, Alibaba is a rock-solid, established business that’s been going for years. It’s basically the Chinese Amazon – it flogged £146 billion worth of stuff last year, and made £1.9 billion in profit on those sales.

None the less, hardly any of us have ever heard of it until now. It’s partly because our internet – and most places where the Latin alphabet is common – is dominated by US brands. However, foreign places with different alphabets have created silos where non-western firms have thrived, freed of the need to compete with US giants, and able to forge their own paths.

In addition, the lack of fixed line internet in many of these places has given these firms a huge leap in mobile technology, currently something of a bugbear for Western firms. In the West, a nice mobile site that works on phones is an optional extra – in Africa, no mobile site means no business. On top of that, the potential for growth in these nations is huge; less than 40 per cent of Africa and Central Asia are online; just less than 50 per cent of China and India are. Once those citizens get online, the potential for giving them all sorts of services is immense.

Here’s five of the breed of billion-dollar businesses you’ve never heard of:

http://blogs.telegraph.co.uk

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Alibaba makes more money than Amazon and eBay #Alibaba #Amazon #Ebay

China’s leading e-commerce company, Alibaba Group, is dangling a deal that might turn into one of the most significant IPOs in U.S.A history.

In a long-awaited move, Alibaba submitted papers for a first public offering of stock hoping to raise at least $1 billion, and dependent upon investor demand for its stock, Alibaba could try to even surpass the $16 billion that Facebook and its investors raised in its IPO two years ago.

One of the main reasons that Alibaba will probably set a new IPO fundraising standard is because one of its big shareholders, Yahoo Inc., is supposed to sell approximately 208 million shares as well.

Alibaba is considered one of the biggest internet companies with more than $150bn worth merchandise
changes on its platforms each year.

The company which began as a service link between Chinese suppliers and retailers abroad branched out, very successfully, into retail e-commerce.

Although it is little known abroad, it has launched two consumer-oriented services in the United States.

According to the company’s press statements the decision to go public has been motivated by the desire to become global as well as the need for increased transparency. It is aimed to help the company to continue to pursue our long-term vision and ideals.

For the moment Alibaba isn’t indicating how much stock will be sold in the IPO, and it isn’t setting a price range either. Those details will come out as the IPO progresses. The IPO is likely to take three or four months to complete before Alibaba’s shares start trading.

The rise of e-commerce in China has given millions of households easier and wider access to books, clothes and consumer electronics; shopping online has become even more popular when smartphones gave to Chinese people easy access to a computer and Alibaba established an online payment system under the name “Alipay”, which made things easier for the shoppers who didn’t have any credit cards.

One fact that is not well-known in the USA is that Alibaba makes more money than Amazon.com and eBay Inc. combined. Furthermore, the company is still growing rapidly as its network of online services such as Taobao, Alipay and Tmall covers an online Chinese market that has 618 million Web surfers, almost twice the size of the U.S. population.

Taobao is an Internet shopping bazaar comparable to eBay, Tmall is an online outlet for brands sold by major retailers, while Alipay is an electronic payment service just like eBay’s PayPal.

The biggest part of Alibaba is now owned by four shareholders:

-Yahoo, with a 23 percent stake

-Japan’s SoftBank Corp., holding a 34 percent stake

-Former CEO and co-founder Jack Ma who holds an 8.9 percent stake, and

-vice chairman and co-founder Joseph Tsai who holds a 3.6 percent stake.

Alibaba didn’t select an ideal period to go public. Many Internet company stocks which soared last year amid high hopes have dropped this year as investors reevaluate their prospects. An example of this situation is Twitter Inc.: Although it has hit a peak of $74.73 last year, its shares have lost more than half of their value.

 

Despite the nervous conditions for Internet stocks, the majority of analysts expect Alibaba’s IPO to generate at least $10 billion. Hamadeh predicts that the IPO will be priced at the level that gives Alibaba a market value of $195 billion. That fact would eclipse Facebook’s present market value of $150 billion.

The record for the richest IPO in the U.S.A is held by Credit and debit card processor Visa Inc. ($18 billion).

Alibaba started in 1999 with $60,000 in the apartment of a former English school teacher, Jack Ma, with no previous experience either in business or technology.

Since then it has blossomed into a testament to China’s economic history, with profits of $2.9 billion on revenue of $6.5 billion through the first nine months of its last fiscal year. That topped the earnings of $2.4 billion posted during the same period by Amazon and eBay combined.

Alibaba’s success has presented a financial crutch for Yahoo Inc., whose stake in the Chinese company is the main reason that its own stock price has been doubled in the past two years.

Yahoo is expected to sell 208 million shares, 40 percent of its Alibaba holdings, in the IPO; this is part of an agreement reached last year. The divestiture is required to generate a windfall of approximately $10 billion that will help define Marissa Mayer’s legacy at the Sunnyvale, California Company. Yahoo had paid $1 billion for its first stake in a 2005 deal which was made by two of Mayer’s frequently maligned predecessors, Jerry Yang and Terry Semel.

Mayer could distribute most of the Alibaba proceeds to Yahoo’s stockholders by buying back millions of the company’s shares or paying dividends. She mainly bought back Yahoo stock after the company gained more than $7 billion from a 2012 sale of Alibaba stock.

Or, Mayer could put aside some of the Alibaba money to finance an acquisition that would raise Yahoo’s audience and its digital advertising sales. Mayer will be probably tempted to do something daring, as she has been unable to increase Yahoo’s revenue during her two-year reign.

Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Morgan Stanley and Citigroup will underwrite the IPO.

 

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