While he is visiting Israel, we wonder how Jack Ma, a slim English teacher, has become the owner of now one of the world’s largest online trading empire and the richest man in China. Just to give you an idea how big Alibaba is, think of it like this: Alibaba’s IPO turned out to be the biggest US IPO in the history. Bigger than Facebook, Google and Twitter combined.
Ma started his visit to Israel flouting on the Dead Sea surface and a first business visit at the offices of Erel Margalit’s Jerusalem Venture Capital Fund (JVP), which Alibaba invests in. Unlike other senior executives, Ma has arrived dressed in a simple-looking sweatshirt and surprised many with a very personal and friendly approach to all who wanted to take a photo of him or get close to him.
1 – Ma began his career as an English teacher and translator. During a working trip to the United States in 1995, he first encountered the Internet. He was fascinated by technology and quickly searched the word “beer.” The results showed a variety of beers from different countries, but to Ma’s disappointment, none of them was from China.
This how he set up his first technology business: an online catalog of Chinese companies, sold to a local telecom company for $800,000, through which Ma and his partners founded Alibaba.
2 – Alibaba and Ma rose to prominence after defeating eBay in China. The US online trade pioneer has already dominated 70% of the online shopping market in China, but Ma has gone through a series of brilliant business moves, including waiving commissions from sellers on the company’s website. With their help, he pushed the American giant out of China. “eBay may be a shark in the ocean, but I’m a crocodile in the Yangtze River,” he said then.
3 – It is hard to think of an American company that holds the US with as much power as Alibaba in China. Alibaba Group, which is traded at a company value of $460 billion, also holds Ant Financial, a giant financial company, which operates the largest mobile payment application in China, as well as a video watching site and a great entertainment arm.
4 – Alibaba’s enormous power requires the smaller players in China to cooperate.
Of the 124 Chinese technology companies with a value of over $1 billion, 51% are controlled or supported by one of three Chinese technology giants: Alibaba, Baidu, which operates the popular search engine in China, and Tencent, China’s leading social networking and messaging company, WeChat.
A Chinese start-up who does not cooperate with one of the three runs the risk of setting up a parallel operation to compete with him.
5 – In China, business and politics always go together. Alibaba could not have grown to its present size without support from the ruling Communist Party. Alibaba’s ties with the administration are even better than those of government-owned companies.
6 -Ma is considered an avowed and enthusiastic supporter of the Communist Party and President Jiang Jinping and speaks a lot about the Chinese system.
In a letter written in 2013 in Hong Kong’s Hong Kong Morning Post, Ma was quoted as saying that the violent suppression of the protest in Tiananmen Square, which killed thousands of people, was “a right decision for its time.” In response to the storm, Ma issued a denial and claimed that the quotes published did not reflect his words.
By chance or not, in December 2015, Alibaba bought the newspaper, which for years was considered a harsh critic of the Chinese Communist Party. To Ma’s credit, it is said that the newspaper continues to publish critical articles, but there are those who claim that it is not at the same frequency.
7 – On trade, Ma continues the line of the Chinese government, which calls for the strengthening of economic globalization and warns of the dangers of a Sino-US trade war shortly after Donald Trump was elected president of the United States.
At a meeting with Trump, Ma promised that Alibaba would create a million jobs in the US within five years, which apparently did not convince the US administration and last January the US announced it was blocking the sale of MoneyGram to the Alibaba group for reasons of national security.
Alibaba intended to pay $1.2 billion for it. Recently, Ma sounded more assertive vis-a-vis the US, saying, for example, that countries such as China must develop chip technology themselves in order to free themselves from US control in the field.
8 Alibaba’s enormous power and its control of large databases in China are a source of concern among critics. A system called Sesame Credit, which produces social rankings for the Aliababa users, attracts special attention.
Sesame Credit uses data from Alibaba’s services. Customers receive a score based on a variety of factors based on social media interactions and purchases carried out on Alibaba one of the world’s largest monopolies. The information they have about each one is huge. They really know what you’re doing from the moment you get up in the morning until you go to sleep.