DUBLIN – Like Bill Gates before him, Alibaba founder and billionaire Jack Ma has decided to hand over the reins to someone else in order to focus his attention on philanthropy. Ma, who is just 54, has been active in causes like education and entrepreneurship, and has made a number of visits to Africa. It seems that, at a certain point, the only sensible thing to do with massive amounts of wealth is to invest it in trying to make the world a better place. The Bill and Melinda Gates Foundation, for example, works in areas like medicine and education to try and tackle persistent problems and global inequalities. It will be interesting to see what Ma, whose own country, China, is no stranger to poverty and social problems, will do with his philanthropy. – Felicity Duncan
Alibaba’s Jack Ma to Step Down as Executive Chairman
By John Corrigan and Liza Lin
(The Wall Street Journal) BEIJING—Jack Ma, the billionaire tycoon who rode the currents of China’s rising affluence to build one of the world’s biggest e-commerce companies, is planning a transition out of his role as executive chairman at Alibaba Group Holding Ltd. to focus on philanthropy and other pursuits, according to a person familiar with the situation.
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Mr Ma is expected to disclose his plans, including a timeline for the transition, on Monday, when he turns 54, the person said. The person emphasized that Mr Ma wants to ensure an orderly transition and plans to remain on the company’s board.
In an interview published late Saturday in the South China Morning Post, a Hong Kong newspaper owned by Alibaba, Mr Ma said he had been preparing to relinquish leadership for a decade. Alibaba was now ready for “me to step away without causing disruption,” he said.
In his years at the helm of Alibaba, Mr Ma emerged as China’s most famous business leader, known for his charisma and his candour, and a fluency in English honed by years of teaching the language and guiding American tourists along the shores of scenic West Lake in his hometown of Hangzhou.
“Jack overseas and at home is the most recognizable symbol of the China internet explosion and more broadly the China consumer boom,” said Duncan Clark, a business consultant in China and author of “Alibaba: The House that Jack Built.” “So you have an iconic figure associated with these two major forces, who plans to relinquish his executive functions.”
Mr Ma’s move could be a sign of the changing business environment in China, Mr Clark noted, as China’s government exerts greater control over technology companies, including through a cybersecurity law adopted last year. The clampdown has largely affected content-driven companies, but Mr Ma’s Ant Financial spinoff has also felt the pinch of tighter regulation.
“Is there a concern now that the oxygen for entrepreneurs is becoming depleted?” Mr Clark asked.
Mr Ma began a leadership transition five years ago, when he stepped down as chief executive. Alibaba’s chief executive is Daniel Zhang and the executive vice chairman is Joe Tsai. As of July, Mr Ma was Alibaba’s fourth-largest shareholder, with about 4% of stock, behind Altaba Inc., the holding company left after the firm sold most of its Yahoo assets to Verizon Communications, and SoftBank Group Corp.
Even so, Mr Ma and others in an entity called the “Alibaba Partnership” still hold sway over much of the decision-making in the company under its shareholding structure.
Since stepping down, Mr Ma has spent much of his time at Alibaba’s Hangzhou campus receiving visiting dignitaries or traveling the world to speak out on causes he believes in. Mr Ma most recently hosted Malaysia’s Prime Minister Mahathir Mohamad at Alibaba’s tree-lined campus in August.
The Chinese tech founder is also a strong proponent of education and entrepreneurship in China and beyond. He frequently makes trips to Africa, where he takes the time to meet young African start-up founders and now offers an entrepreneurship prize.
Mr Ma started as a teacher, and education will be one of his top interests as he winds down his involvement at Alibaba, the person familiar with the matter said.
Mr Ma, one of China’s richest people, is among the first of a generation of China’s internet pioneers, which include Tencent Holdings Ltd.’s Pony Ma and Baidu Inc.’s Robin Li. The former teacher is known as a quirky leader, having dressed up as the Terminator and Michael Jackson at company events and last year starring in a martial arts movie in which he defeated stars like Jet Li.
Mr Ma started an online directory in 1995 and then founded Alibaba.com in his apartment four years later—not long before the global dot-com bust—with the goal of using the internet to connect small businesses in China to bigger, more-distant markets.
His company dominates e-commerce in China through online sales platforms Taobao and Tmall, where Chinese consumers and businesses alike shop for apparel, food, electronics and other goods. The company reported revenue of $11.83 billion in its second quarter, up 61% year over year.
Alibaba is valued at around $420 billion, rivaling Amazon.com Inc. globally, and like Amazon has moved into entertainment and cloud-computing businesses. Its annual net profit last fiscal year was $10.2 billion.
With e-commerce as a base, Mr Ma moved Alibaba into a variety of other businesses, including entertainment and mobile payments.
He launched what became his Ant Financial spinoff with Alipay, initially an escrow service that would hold payments until shoppers received their goods. Last year, it handled more payments than Mastercard and controlled the world’s largest money-market fund.
The success of Alibaba has also led to increasing dealings with China’s authoritarian government, ruled by the Communist Party. Alibaba has data on hundreds of millions of Chinese citizens who use the company and its affiliated services to shop online, stream videos, pay rent, send text messages, make comments on social media and more—and the government has the ability to access that data as part of a sophisticated national surveillance operation.
Alibaba and China’s other internet giants have benefited from trade policies shielding them from foreign competition, and have had little choice but to cooperate. The Wall Street Journal reported last year that Alibaba’s sprawling campus in Hangzhou includes a police outpost where authorities can tap into the trove of information the tech giant collects through its e-commerce and financial-payment networks.
Mr Ma has had a few setbacks in his career, including continuing complaints over the past decade that counterfeit goods are readily available on Alibaba’s platforms. The company’s Taobao site was removed from the U.S. Trade Representative’s “notorious markets list” in 2012, but it was placed back on in 2016 and 2017 for selling fakes.
Alibaba says it works hard to keep counterfeit goods off its platforms, but Mr Ma himself drew ire two years ago when he said fake products were often of a “better quality and a better price” than genuine products.
And despite Alibaba’s successful push into emerging markets such as Southeast Asia and India, the U.S. has remained elusive. Alibaba’s affiliate Ant Financial failed in its bid to acquire U.S. money transfer company MoneyGram International Inc. this January, even after raising its bid for the Dallas-based company to $1.2 billion from an original proposal of $880 million.
The company said it was unable to secure approval from the Committee on Foreign Investment in the U.S. despite a year-long process, in a move widely seen as indicative of U.S.-China tensions. In its core e-commerce business, Alibaba also tried and failed to crack the U.S. online retail market.
Mr Ma’s decision to pull back from company leadership comes at a chaotic time for China’s e-commerce industry. The industry faces a Chinese economy whose growth is slowing, weighed down by a the government’s debt clean-up and uncertainty over prolonged trade tensions with the U.S. The chief executive of e-commerce rival JD.com Inc., Liu Qiangdong, was arrested on suspicion of a rape last week in the U.S. He has denied wrongdoing and was released without bail while police continue their investigation.
Mr Ma’s transition will likely have little impact on the day-to-day running of the company, said Mitchell Green, the founder and partner of Lead Edge Capital, a New York equity-investment firm, noting that the company has been run by Mr Tsai, Mr Zhang, chief financial officer Maggie Wu for several years already.
Mr Green remains bullish on Alibaba stock, adding that he had just bought more of the company’s shares on Thursday.
“These guys are the dominant leaders in retail consumption and cloud computing in China. Ant Financial will grow exponentially in next 20 years too. If you believe China is going to be bigger in 20 years than it is today, then this is the stock to own.”
—Yoko Kubota contributed to this article.
Write to Liza Lin at [email protected]
