Ma Yun’s Internet World

By staff reporter ZHU HONG

As the founder and chairman of Alibaba Group, every one of Ma Yun’s business decisions attracts attention. From spending RMB 1.2 billion on stakes in the Guangzhou Evergrande Football Club to wholly acquiring UCWeb, and to making the Initial Public Offering (IPO) in the U.S., Ma Yun continues to make headlines with many fingers in many pies, despite having resigned as Alibaba’s CEO.

Ma Yun.

Alibaba, China’s largest e-commerce enterprise, boasts hundreds of millions of users and provides business platforms for millions of online shops, taking up 80 percent of China’s online shopping market share. The company’s two websites Taobao and Tmall registered a sales volume of US $240 billion in 2013, three times that of eBay and twice Amazon. In 2013, Alipay, the company’s smartphone-based payment platform, had a turnover more than three times that of U.S. rival PayPal.

“Fifteen years ago, Alibaba’s 18 Chinese founders were determined to establish a world-class Internet company. Fifteen years later, our company is more successful than we could ever imagine. Alibaba is entering an age of new challenges,” Ma Yun wrote in an email to Alibaba’s employees, before the company applied for its first U.S. IPO.

Father of the Chinese Internet

In a way, Ma Yun’s entrepreneurship parallels the history of China’s Internet.

In 1995, as an interpreter for a Chinese trade delegation to the U.S., Ma Yun encountered the Internet for the first time. “This is Internet, you can search anything by inputting key words,” said a local friend whose advice introduced Ma to the new world. Ma’s first search was for “beer” and returned huge amounts of information about German and American beer. Then he searched for “China,” but the response was “no data.” Ma wondered why there was nothing about China on the Internet. Thinking fast, he persuaded a friend to make a website for an English-Chinese translation service. Within three hours he received six emails requesting information, giving Ma his first glimpse of the Internet as a business opportunity.

After returning home, Ma set up China’s first business website – China Yellow Pages, which made homepages for other enterprises. Each homepage contained about 2,000 characters in both Chinese and English and a color picture, and cost RMB 20,000.

Invited by the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) in 1997, Ma Yun’s team joined the China International Electronic Commerce Center. Within a year they successively developed a number of websites for customers including several government ministries and commissions.

Ma left MOFTEC in early 1999 and established Alibaba in his apartment in Hangzhou. “If the business world is also divided into the poor and the rich, the Internet is for the poor,” said Ma. “I want to lead poor people to launch this revolution.” Born in Zhejiang, a province known for well-developed private small and medium-sized enterprises (SME), Ma has struggled with the market, and knows how hard it is to start a small business. “For instance, suppose the manufacturer’s price for a pen is US $15, but Wal-Mart offers a price of US $8. Since an order could be worth US $10 million, the supplier has to accept the order. However, if Wal-Mart cancels the order next year, the supplier is finished. Fortunately, small suppliers can now use the Internet to find other customers worldwide,” Ma explained.

Alibaba’s business model is to gather import and export information for small businesses across the world, helping them to find buyers who were otherwise only present at trade fairs. “SMEs are like scattered pebbles on beach, which the Internet can stick together. Combined, these small pebbles are mightier than boulders,” said Ma. “Online business is like throwing a sprat to catch a herring, winning competition with speed.”