Story of Alibaba: A revolution of eCommerce in China

SUDHA LUITEL, INVESTOPAPER

Jack Ma is a well-known name from the billionaire’s list published by Forbes Magazine. The Alibaba co-founder and former chairman is the richest man of China at today’s date. With 38.4 billion USD net worth in 2019, Jack Ma chaired Alibaba Group since its commencement, which is one of the world’s largest e-commerce businesses. Last year on September 2018, Ma announced his resignation as Alibaba’s executive chairman in 2019 and the chairmanship has been succeeded by CEO Daniel Zhang which is applicable from September 10, 2019.

Jack Ma’s story is an interesting one who happened to be a self-made billionaire. Jack Ma is popular among his employees as a funny and down-to-earth personality. Before finding success in Alibaba, Jack Ma had faced failures one after another. He was brought up in a poor communist family of China. Born in 10th September 1964, Ma worked as a tourist guide in China at his young age. After schooling, he tried for admission in college and failed twice in the college entrance exam. On the third try, he made it into college and graduated in 1988. He faced a number of rejections at jobs he applied including a job at KFC. Finally, he managed to get a job as an English teacher with a salary of $12 per month.

Trigger Point behind the establishment

Even with no experience in coding and computers, Jack Ma was interested in using the internet and he used it for the first time in 1995. The first online search he made on the internet was “beer” and when there was no Chinese beer that popped on the screen, it motivated him to start an internet company for China so that Chinese product would appear on the search engine. Jack Ma failed in his first two ventures and Alibaba was his third venture. Once he called his 17 friends to his apartment and convinced them to make an investment in the visionary company “Alibaba”.

Agreeing upon his idea, the company was started and soon it attracted a large number of members from all around the world. Till October 1999, the company was able to raise capital of $25 million. Coming up to 2005, Yahoo also invested $1 billion in exchange for Alibaba’s 40% stake of the company.

Gradually, the Alibaba group became one of the most recognized online companies around the world. With specialization in e-commerce, retail, internet, and technology, Alibaba is a huge multinational company today. It was founded in 4th of April, 1999. Its head office is located in Hangzhou, China. There are various subsidiaries of Alibaba.com all around the globe. Daraz online in Nepal is also a subsidiary company of Alibaba.com.

Inside picture of the Company

Alibaba’s net worth as of September 06, 2019 is $455.29B. Alibaba made its debut on the New York Stock Exchange in 2014 as the largest initial public offering (IPO) in history. E-commerce of Alibaba accounts for 80% of the company’s business. Customers can use the e-payment app for making payments for the products. The company has invested in the entertainment industry. In 2018, Alibaba paid $750 million for a stake in the cinema division of Chinese firm Wanda Film. The company has also made an investment in Tom Cruise’s movie Mission: Impossible. Also, Alibaba owns video streaming website Youku. The e-commerce is now expanding on its cloud computing business named as Alibaba Cloud. Similarly, Alibaba is actively investing even in the food space. Earlier in 2018, Alibaba also completed the acquisition of Chinese food-delivery leader Ele.me and it also teamed up with Starbucks.

Awards and achievements of Jack Ma as an entrepreneur

  • Ma was honored as one of the “Top 10 Economic Personalities of the Year” by China Central Television in 2004.
  • Jack Ma was selected as a “Young Global Leader” in the year 2005 by the World Economic Forum.
  • Jack Ma was recognized as “25 Most Powerful Businessperson in Asia” by Fortune in 2005.
  • He was selected as “Businessperson of the Year” in 2007 by Business Week.
  • Time Magazine listed Ma as one of the world’s 100 most powerful people in May 2009.
  • Forbes China also selected him as one of the Top 10 Most Respected Entrepreneurs in China by in 2009.
  • Ma received the 2009 China Central Television Economic Person of the Year.
  • Jack Ma also received 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.
  • Ma was awarded an honorary doctoral degree by the Hong Kong University of Science and Technology in November 2013.
  • Jack Ma was ranked as the 30th most powerful person in the world in an annual ranking published by Forbes in 2014.
  • Asian Award honored him with the Entrepreneur of the Year award in 2015.
  • Fortune ranked Ma second on its World’s 50 Greatest Leaders list in 2017.
  • Also, Ma and other 16 influential global figures were appointed by UN Secretary-General Guterres as the new advocates for sustainable development goals in May 2019.

The journey was not always sweet for Alibaba group

The journey of the Alibaba group was sometimes high and sometimes low. At the initial days, the company had no money and was lagging behind technology. Every dollar was invested with too much care and detailed analysis. The office opened in the apartment of Jack Ma now has a number of subsidiaries all around the world. The initial expansion of Alibaba started after it gained capital from Goldman Sachs in 1999 and Softbank Corporation in 2000.

Alibaba group runs with the belief of global vision and local win. The co-founders designed the business model by themselves. They were more focused on helping small and medium-size companies make money. They focused on providing a quality product with a “click of fingertip”  to their customer.

Alibaba expanded too fast initially and then it had to face layoffs. By 2002, it had only enough cash to survive for 18 months. There were a lot of free members using the site but they lacked the idea of how to make a profit out of it. Later, they developed a product for China exporters to meet U.S. buyers online. It was what saved the Alibaba group from extinction. At the end of 2002, they made just $1 in profits and there was gradual improvement each year. Alibaba reaps large profit share in the e-commerce sector at present leaving behind many big technology-based firms.

Takeaway

Failure in one sector does not prove that one is incapable of being successful. Rather, it can be a lesson to take as a turning point of life. Jack Ma was not born with a silver spoon but is a self-made billionaire. Giving up should not be the word existing on anyone’s dictionary.

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