LOG IN SUBSCRIBE

W SJ INDIA W SJ LIVE MARKETW ATCH BARRON'S PORTFOLIO DJX MORE

BUSINESS

ASIAN BUSINESS NEWS

Alibaba Founder Jack Ma Takes Center Stage Ahead of IPO

Alibaba FounderTakes Center Stage

1 of 12

Buffett Displays HisNuanced Side

2 of 12

Zulily CustomersPlay the WaitingGame

3 of 12

Pfizer ReportsLower Earnings,Revenue

4 of 12

Charismatic Executive Chairman of Chinese E-commerce Giant Is Sometimes Described as Alibaba's Spiritual Leader

Updated May 5, 2014 7:28 a.m. ET

Alibaba Defined

Last May, 40,000 Alibaba Group Holding Ltd. employees and customers met at a

Hangzhou soccer stadium in driving rain to watch Jack Ma step down as chief executive

of the Chinese e-commerce giant he founded in his apartment 15 years ago.

Before his valedictory speech, Mr. Ma belted out the Chinese pop song "I Love You,

China," from the stage. The crowd roared.

"Taking over from Jack Ma is a difficult

job," he said, dressed in oversize glasses

and a shiny silver jacket.

The three-hour extravaganza was a

testament to the central role the 49-year-

old Mr. Ma played—and continues to play

—in what is arguably the world's biggest

e-commerce company. Some employees

describe the charismatic Mr. Ma as

Alibaba's spiritual leader.

As Alibaba prepares to submit its first major filings as early as this week in what could be

one of the largest initial public offerings in U.S. history, Mr. Ma—now executive chairman

—still looms large in the company's dealings.

"I thought it would be easier when I stepped down from CEO, but now I'm finding out

being a chairman, if you want to be a good chairman, is much busier than being a CEO,"

Mr. Ma told The Wall Street Journal.

Mr. Ma's success has given him celebrity status in China, where bookstore shelves

Jack Ma started China's Internet giant Alibaba from his apartment in Hangzhou. Porter Erisman, a former

Alibaba employee, shares an insider's look at Ma's rise to the top.

What's This?Popular Now

ARTICLES

VIDEO

The Dubious Sciencein Crusade on Fat

1

Opinion: Standing toSue Obama

2

Opinion: SacrificingAfrica for ClimateChange

3

Why Narendra ModiWas Banned FromU.S.

4

Afghan LandslideSurvivors Await Aid

5

Funny SubmarineRules Keep Sailors1

TOP STORIES IN BUSINESS

By PAUL MOZUR And JURO OSAWA CONNECT

Email Print Comments

rMenu

News, Quotes, Companies, Videos SEARCH

Content From Sponsors

Jack Ma Milestones

October 1964—Born in Hangzhou, China, to parents

w ho w ere traditional musical theater performers.

1988—Graduates from Hangzhou Teacher's Institute.

1995—Launches f irst w ebsite, China Pages, an online

directory of Chinese companies.

September 1999—Creates Alibaba.com, a trading

w ebsite that connects Chinese suppliers w ith

overseas buyers, in his apartment.

1999-2000—Raises funds from Goldman Sachs,

SoftBank and other institutional investors.

May 2003—Launches consumer marketplace Taobao

to take on eBay in China.

December 2004—Launches electronic payment unit

Alipay.

August 2005—Secures $1 billion investment from

Yahoo.

April 2008—Launches online shopping mall Taobao

Mall, now called Tmall.

August 2010—Separates Alipay from Alibaba and

brings it under his control, later triggering a public feud

w ith Yahoo.

May 2013—Steps dow n as Alibaba CEO and

becomes executive chairman.

March 2014—Announces plan to seek an initial public

offering in the U.S.

April 2014—Discloses plan to form one of Asia's

largest philanthropic trusts.

Earlier Coverage

Alibaba's Jack Ma Sets Up Philanthropic

Trust

Digits: Jack Ma's Wild Side

Alibaba Flexes Muscles Before IPO

stock his biographies and airports replay clips of his motivational speeches on business

management.

Alibaba, the largest e-commerce company

in the world's most populous country,

dwarfs its U.S. counterparts. In 2013, the

combined transaction volume of its

Taobao e-commerce marketplace and

another Alibaba-run shopping site called

Tmall reached $240 billion, according to a

person with knowledge of the figure. That

is triple the size of eBay Inc.,

more than double the size

of Amazon.com Inc.

Alipay, Alibaba's online payment platform,

last year handled more than triple the

amount of mobile payments processed by

PayPal.

Even after the expected multibillion-dollar

IPO, Alibaba's corporate structure will

allow Mr. Ma, who owns about 7% of the

company, to have a say in nominating

more than half of its board. Mr. Ma also

owns 46% of the holding company that

controls Alipay.

Mr. Ma has been at the center of Alibaba's

efforts to expand beyond e-commerce.

Vehicles in which Mr. Ma owns a stake

have invested in Chinese finance and

media companies—in at least one case

using loans from Alibaba.

Such deals may raise questions about

whether Mr. Ma would ever prioritize his

own investments over the interest of

Alibaba shareholders, said Paul

McKenzie, an analyst at Hong Kong-based brokerage CLSA. Mr. Ma didn't comment on

his investments.

Even though he is no longer CEO, Mr. Ma remains the face of Alibaba. As the e-

commerce company expands further into financial services, Mr. Ma has traded barbs

with some of China's big banks.

In an interview with the state-run People's Daily last year, Mr. Ma said China's banks

aren't lending to the country's small businesses: "I see there are 80% of the clients that

are not covered."

At a conference last month, China Minsheng Bank Corp. Chairman

Dong Wenbiao defended the current banking system and questioned Alibaba's financial

ambitions. "I said to Jack Ma, 'Give up your reform efforts. You don't have the ability,' " Mr.

Dong said.

EBAY +0.62%

AMZN +0.04%

600016.SH -1.40%

Sane

A Guide on HowWomen ShouldDress

2

Joel McHale'sElaborate ChrisChristie Takedown

3

Who is Jack Ma?

4

Who is Jack Ma?

5

What's This?

Due Diligence: The Make or Break

Phase of a Transaction

DealCloserBlog

First BRICS. Then PIIGS. Now, The

Formidable 5.

The Financialist

5 Savings Accounts with Excellent

Interest Rates

FindTheBest

Mr. Ma was born in Hangzhou, a city of 2.4 million people near Shanghai. His parents

were performers of a traditional Chinese musical theater called pingtan. He came of age

during China's economic flowering in the 1980s, learning English while an unpaid tour

guide to foreign visitors.

After twice failing China's national university entrance exam, Mr. Ma was accepted to

Hangzhou Teacher's Institute and graduated in 1988. As the economy improved in the

early 1990s, Mr. Ma began looking beyond teaching for work in business. He has said he

was rejected for a number of jobs, including as a manager at a Kentucky Fried Chicken.

During a 1995 trip to Seattle as a translator for a trade delegation, Mr. Ma went online for

the first time. When he saw how scant information was about China, he set out to create

his own company. That year, Mr. Ma started China Pages, an online directory of Chinese

companies; Alibaba followed in 1999.

Colleagues say Mr. Ma—who is married with a son and daughter—loves performing. At

Alibaba's annual "Alifest" conferences for customers and media, Mr. Ma has in past

years shared the stage with former President Bill Clinton, Los Angeles Lakers basketball

star Kobe Bryant and actor Arnold Schwarzenegger.

Mr. Ma has "that ability, even in a room of 600 people, to make people think [he is] talking

to one person, to you," said Duncan Clark, a longtime acquaintance and tech consultant

based in Beijing.

Mr. Ma's eccentric performances and his ability to motivate a crowd have helped build a

cultlike following among Alibaba employees. At the company's Hangzhou headquarters,

Mr. Ma has blessed hundreds of newlywed Alibaba employees in wedding attire during an

annual ritual.

Mr. Ma's decisiveness and his willingness to take big risks helped the company

overcome challenges, colleagues said.

When eBay Inc. entered China in 2002 by teaming up with a local shopping site, Mr. Ma

developed Taobao to compete head-on with the U.S. company.

"Jack said that the best defense is offense," said Joe Tsai, Alibaba's executive vice

chairman.

Mr. Ma also decided that Taobao should let merchants sell without paying listing or

transaction fees, even though his first website—Alibaba.com—was barely breaking even.

The no-fee model allowed Taobao to attract sellers quickly, and the business soon

overtook eBay's Chinese market. Taobao later figured out ways to generate revenue

through advertising.

In 2009, when the global financial crisis hit small Chinese merchants who were using

Alibaba.com to find overseas buyers, company executives—including David Wei,

Alibaba.com's then CEO—proposed cutting fees by as much as half.

"Jack said if merchants disappear there will be no Alibaba," Mr. Wei recalled. "Jack didn't

even think for a second."

Cutting fees helped Alibaba.com weather the financial crisis and led to a jump in users,

pushing up its net profit by 45% in 2010 over 2009.

Although Mr. Ma started Alibaba with little background in business or technology, he knew

enough to pick the right people.

Several months after he launched Alibaba, Mr. Ma hired Mr. Tsai, a Taiwanese-born,

Yale-educated lawyer. Mr. Tsai has played a central role in Alibaba's fundraising and

acquisitions, from the first $5 million investment by Goldman Sachs Group Inc.

in 1999 to the widely anticipated U.S. IPO.

When Alibaba celebrated the 10th anniversary of its Taobao shopping site, founder Jack Ma took the

stage to sing in front of 40,000 employees and customers at a Hangzhou stadium.

GS -0.93%

Community rules

JOURNAL COMMUNITYAdd a Comment

Track replies to my comment

WSJ In-Depth

View All Comments (1)

Current and former colleagues say Mr. Ma makes decisions with gut instinct.

In late 2004, when Alibaba decided to launch Alipay, Mr. Ma flew to Guangzhou to visit

Jonathan Lu, Alibaba's current chief executive, who was then the head of a regional sales

team.

Mr. Lu recalled Mr. Ma asking whether he knew anything about Alipay, or about PayPal.

When Mr. Lu replied that he didn't, Mr. Ma responded, "Good. You are in charge of

Alipay," Mr. Lu recalled.

Corrections and Amplifications

Alipay was separated from Alibaba in August 2010. An earlier version of the timeline in

this article said Alipay and Alibaba were separated in May 2011.

Write to Paul Mozur at paul.mozur@wsj.com and Juro Osawa at juro.osawa@wsj.com

Will Putin's GazeReach Latvia?

Alibaba FounderTakes Center Stage

Afghan LandslideSurvivors Await Aid

Why Iraq Is MovingCloser to Full-ScaleSectarian War

Woman ProvidesFunds for HouseplantUpon Her Death

BMW PlotsSustainable Supercar

To add a comment please

Log in Create an AccountYour real name is required

for commenting.

CLEAR POST

Wall Street JournalFacebookTwitter LinkedInFourSquareGoogle+YouTubePodcastsRSS Feed AppStoreBack to Top

Customer Service

Customer Center

Contact Us

WSJ Weekend

Contact Directory

Corrections

Policy

Privacy Policy

Cookie Policy

Data Policy

Copyright Policy

Updated : Subscriber

Agreement& Terms of Use

Your Ad Choices

Ads

Advertise

Place a Classified Ad

Sell Your Home

Sell Your Business

Commercial Real Estate Ads

Recruitment & Career Ads

Franchising

Advertise Locally

Tools & Features

Apps

Emails & Alerts

Graphics & Photos

Columns

Topics

Guides

Portfolio

Old Portfolio

More

Register for Free

Reprints

E-books

Content Partnerships

Conferences

Academic Partnerships

Leadership Program

Events in Asia

Mobile Site

Subscribe / Login

Email Print Comments Order Reprints

News Archive

Jobs at WSJ Copyright ©2014 Dow Jones & Company, Inc. All Rights Reserved.