Wed, Sep 11, 2019 - Page 10 News List

Alibaba’s Jack Ma steps down


Alibaba Group Holding Ltd founder Jack Ma, right, receives sunglasses and a leather jacket from then-California governor Arnold Schwarzenegger at the Alibaba Netrepreneur Summit in Hangzhou, China, on Sept. 11, 2010.

Photo: Bloomberg

Alibaba Group Holding Ltd (阿里巴巴) founder Jack Ma (馬雲), who helped launch China’s online retailing boom, yesterday stepped down as chairman of the world’s biggest e-commerce company at a time when its fast-changing industry faces uncertainty amid a US-Chinese trade dispute.

Ma, one of China’s wealthiest and best-known entrepreneurs, gave up his post on his 55th birthday as part of a succession announced a year ago.

He is to stay on as a member of the Alibaba Partnership, a 36-member group with the right to nominate a majority of the company’s board of directors.

Ma, a former English teacher, founded Alibaba in 1999 to connect Chinese exporters to US retailers.

The company has shifted focus to serving China’s growing consumer market and expanded into online banking, entertainment and cloud computing. Domestic businesses accounted for 66 percent of its US$16.7 billion in revenue in the quarter ending in June.

Chinese retailing faces uncertainty amid a trade dispute that has raised the cost of US imports.

Growth in online sales decelerated to 17.8 percent in the first half of this year amid slowing Chinese economic growth, down from last year’s full-year rate of 23.9 percent.

Alibaba said that its revenue rose 42 percent year-on-year in the quarter ending in June to US$16.7 billion and profit rose 145 percent to US$3.1 billion. Still, that was off slightly from last year’s full-year revenue growth of 51 percent.

The total amount of goods sold across Alibaba’s e-commerce platforms rose 25 percent last year to US$853 billion. By comparison, the biggest US e-commerce company, Inc, reported total sales of US$277 billion.

Alibaba is one of a group of companies — including Tencent Holding Ltd (騰訊), search engine Inc (百度) and e-commerce rival Inc (京東) — that have revolutionized shopping, entertainment and consumer services in China.

Alibaba was founded at a time when few Chinese were online. As Internet use spread, the company expanded into consumer-focused retailing and services. Few Chinese used credit cards, so Alibaba created the Alipay (支付寶) online payments system.

The company’s US$25 billion initial public offering on the New York Stock Exchange in September 2014 was the biggest to date by a Chinese company.

The Hurun Report, which follows China’s wealth, estimates Ma’s fortune at US$38 billion.

In 2015, Ma bought Hong Kong’s South China Morning Post.

Ma’s successor as chairman is CEO Daniel Zhang (張勇), a former accountant and 12-year veteran of Alibaba. He was previously president of its consumer-focused (天貓) business unit.

Ma faced controversy when it was disclosed in 2011 that Alibaba transferred control over Alipay to a company he controlled without immediately informing shareholders, including Yahoo Inc and Japan’s Softbank Group Corp.

Alibaba said that the move was required to comply with Chinese regulations, but some financial analysts said that the company was paid too little for a valuable asset. The dispute was later resolved by Alibaba, Yahoo and Softbank.

Corporate governance specialists have questioned the Alibaba Partnership, which gives Ma and a group of executives more control over the company than shareholders.

Ma has said that it ensures Alibaba focuses on long-term development instead of responding to pressure from financial markets.

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