On Tuesday, Jack Ma officially stepped away from his day-to-day role at the e-commerce giant he created in 1999. It surprised no one: Ma telegraphed the move as early as 2013, when he became chairman of Alibaba Group, giving the role of CEO to Daniel Zhang. Never one to shun the spotlight, his retirement ceremony was held at a 80,000-capacity stadium and featured flashy performances from Ma, Zhang, Alibaba technology committee CEO Wang Jian, as well as co-founders Joe Tsai and Lucy Peng.
An oft-repeated Ma-ism, “Alibaba isn’t Jack Ma” is salient at this moment—indeed, this historical moment. Just as Steve Jobs’s vision of consumer electronics changed how we think about technology, so too has Jack Ma’s vision for online commerce changed how we buy things (and not just in China!).
(As an aside, writing this piece does feel like I’m falling into Ma’s hype trap. It’s not hard for me to imagine him regularly checking his Google alert for “Jack Ma retirement” a la Tom Sawyer attending his own funeral just to hear what people say about him.)
Bottom line: Alibaba has a clear path ahead without Jack Ma and just because he’s no longer CEO nor chairman, doesn’t mean he won’t be helping to set the direction of the company.
Ma has been the visionary driving Alibaba’s strategy since its founding in 1999. However, he has long relied on others to execute that vision and, from all accounts including his own, he doesn’t like getting involved in the details. Like Apple after Jobs, Ma’s successor has a clear roadmap ahead of him, but once they company nears the end of that roadmap, it’s unclear how much vision Zhang will be able to bring to bear (like Tim Cook, Zhang is known for execution, not vision). Unlike Apple, however, Ma is still alive and remains a committee member of the Alibaba Partnership, a unique addition to Alibaba’s corporate governance structure featuring senior employees from various departments. While Ma may love the spotlight, he has done a phenomenal job empowering others in the organization.
Gone but not gone: Despite resigning as chairman, it appears that Ma will remain a senior decision-maker indefinitely. Indeed, he doesn’t actually step down as executive chairman until the 2020 shareholder meeting. With 6.2% of Alibaba’s stock, he remains a major shareholder.
After leaving the board, he will indefinitely maintain a role on the Partnership Committee of the Alibaba Partnership, an interdisciplinary group of 38 decision makers that out-ranks the board and is chosen by its own members. The Partnership is a unique feature of Alibaba’s corporate governance structure and was one reason the company listed in the US, not Hong Kong which, at the time, didn’t allow such special controlling shares. According to the company’s website, the Partnership enables “senior managers to collaborate and override bureaucracy and hierarchy.” On top of that, partners have the exclusive right to nominate subject to shareholder approval, and sometimes even appoint, a simple majority of Alibaba’s board.
The Partnership Committee of the Alibaba Partnership is responsible for administering Partnership elections and allocating cash bonuses to Partnership members. It currently consists of founders Jack Ma, Joe Tsai, and Lucy Peng, as well as Alibaba CEO Daniel Zhang and Ant Financial CEO Eric Jing.
Why now: There has been much speculation around the timing of Ma’s departure. 55 is a young age to retire and, at least in China, most tech founder-CEOs have remained in their position, treating their companies like their own fiefdom common to Chinese leaders in any industry or sector.
Two theories prevail, an official version and an unofficial version:
- He wants to keep taking steps back so he can focus on his passion projects of philanthropy and education.
- He was pressured to take a less public role as a business leader by the powers that be (and perhaps from his own team).
Both theories make sense. On the one hand, he is clearly driven by an optimistic view of the world and has an interest in philanthropy. On the other hand, China has a history of “shooting the bird that pokes it head out (qiangda chutou niao).” With Ma less often mixed up in sensitive areas, Alibaba PR hopefully won’t have to strategize as much around explaining to the world what exactly he means by “Alibaba intelligence.”
A (not really) brief timeline: Alibaba isn’t Jack Ma, but Ma’s story is very much Alibaba’s—there isn’t much daylight between a bio of the man and a history of the company.
- 1994: An avid English learner since childhood and English teacher, Ma starts Hangzhou Haibo Translation Agency.
- 1995: With He Yibing, Ma founds com, an online directory and webpage builder for Chinese companies in English. He Yibing would go on to found LianLian, an O2O2O (offline to online to offline) company focusing on lifestyle services in 2012.
- 1998: After China Pages fails, Ma works for China’s Ministry of Foreign Trade and Economic Cooperation. There he meets Jerry Yang, founder and CEO of Yahoo.
- Apr 1999: Ma, with 18 other co-founders, founds com, an English-language wholesale market. Later that year, the team launches the domestic version.
- Jan 2000: Softbank, along with a group of other investors, invest $20 million into the company.
- May 2003: Alibaba launches Taobao.
- Dec 2004: The company launches Alipay, an online payment system that uses escrow to solve the “trust problem” with online shopping: customers pay into an escrow account and merchants would not get the funds until the customer confirms they have received the product they ordered in good condition.
- Aug 2005: Yahoo invests $1 billion into Alibaba to become the largest shareholder with a 40% stake.
- Nov 2007: Alibaba goes public in Hong Kong with an offer price of HKD 13.50 per share. The company raises HKD 13.1 billion (around $1.6 billion).
- Apr 2008: The company launches Taobao Mall, a B2C marketplace. It would later become Tmall, headed by Daniel Zhang.
- Sept 2009: They launch AliCloud, the company’s cloud computing platform, now the largest in China.
- Nov 2009: Pioneered by Zhang, Alibaba holds the first Singles’ Day shopping festival, now the most lucrative shopping event in the world.
- May 2011: Alibaba sells control of Alipay to a group headed by Jack Ma. Alibaba claims this is because of new rules from the country’s central bank. Yahoo contests the sale, claiming it was done without their knowledge. Eventually, a deal is made between Yahoo, Softbank, and Alibaba stipulating that if Alipay went public, the e-commerce company would receive between $2 billion and $6 billion. As part of the deal, Alipay is required to pay license fees and continue serving Taobao.
- June 2012: Alibaba pays $2.45 billion to delist in Hong Kong.
- Sept 2012: The company buys back half of Yahoo’s shares for $7.6 billion, a 7x ROI on the US company’s initial investment.
- Jan 2013: Jack Ma steps down as CEO of Alibaba but stays on as executive chairman.
- Sept 2014: Alibaba goes public on the NYSE for $68 per share. They raise around $25 billion to become the largest IPO in history.
- Oct 2014: Alibaba creates Ant Financial, an affiliate that includes Alipay. It is now estimated to be worth $150 billion.
- Aug 2015: The e-commerce company goes offline with a $4.6 billion purchase of shares in Suning, an electronics retailer.
- Apr 2016: Alibaba takes control of Lazada, an e-commerce platform based in Singapore with a $1 billion investment.
- Jan 2017: Jack Ma visits President-elect Donald Trump before Chinese officials even get the chance.
- Feb 2018: Alibaba buys a 33% stake Ant Financial
- Nov 2018: People’s Daily identifies Ma as a member of the Communist Party in a list of 100 Chinese people who have “made extraordinary contributions” to the development of China over the last 40 years.
- Sept 2019: Ma resigns as chairman of Alibaba’s board, but announces plans to remain on the board until the 2020 shareholders meeting and also remains a leading member of the Alibaba Partnership committee.
What made Ma different: Jack Ma isn’t your typical tech founder. He isn’t even your typical China tech founder. First, he’s no engineer, as he readily points out. His degree was in English and he is quick to remind everyone of his humble beginnings as an English teacher. As a non-technical person deeply interested in technical topics, I find myself wincing at one moment and laughing out loud the next whenever Ma makes statements about technology. Watch his “debate” with Elon Musk and you’ll understand what I mean. While his non-technical platitudes don’t make much sense either, it’s clear that he’s an optimist. He has a compelling charisma and positive outlook that has brought people together to work toward a common goal.
Second, he loves attention. At last year’s annual Alibaba anniversary party, he starred in a kung fu short film and came on stage dressed as Michael Jackson. At his farewell celebration this week, he danced and sang dressed up in gaudy outfits. He even had the hubris to visit Donald Trump just before he took office and before any official visitors from China. For a country led by the public sector, a private individual making a visit first must have been embarrassing.
Contrast this to other leading tech founders like Pony Ma (Tencent), Wang Xing (Meituan), and Zhang Yiming (Bytedance): all three have engineering backgrounds, seem allergic to the spotlight (Zhang Yiming, to my knowledge, has never even accepted a media interview). As they say, “culture runs downhill” and, from where we sit at TechNode, Alibaba is quite different from other tech companies.
While Tencent, for example, is fragmented and media-shy, Alibaba has probably the most proactive—indeed, relentless—PR and marketing apparatus in China tech. Just as the company was celebrating their 20th anniversary and Ma’s “departure,” one day later they are holding their annual “Makers’ Fair” and in a few weeks they’ll have their Cloud Computing Conference.
The road ahead: Ma leaves his company set on an ambitious path for the coming years, with plays into several new industries already underway. Alibaba has become more than just an online marketplace. It is now a services company. Services for consumers include the online marketplace and mall as well as its very successful O2O delivery cum grocery store Hema. However, what will propel the company into the future is its services for businesses. New retail is more than just delivery in 30 minutes; it’s bringing the full power of the online world into the offline. Supporting the digitization of retail and manufacturing is Alibaba’s cloud computing services, currently the largest provider in China (TechNode’s English site was previously hosted on Ali Cloud). On top of that, the amount of online and offline behavioral data they are collecting should allow them to create powerful prediction algorithms, compounding their potential for growth. With or without Ma at the helm, Alibaba is in a great position to continue to dominate for at least the next five years.