Jack Ma, China’s richest man, will mark his 55th birthday on Tuesday (Sept. 10) by stepping down from his role as chairman of Alibaba, the e-commerce company he grew into one of the 10 most valuable tech firms worldwide.
“…I still have lots of dreams to pursue. Those who know me know that I do not like to sit idle,” Ma wrote in an open letter announcing the move last year, “The world is big, and I am still young, so I want to try new things— because what if new dreams can be realized?!”
Thousands of Alibaba employees will gather to bid him farewell on Tuesday evening at an Olympic-sized stadium in Hangzhou, where the company is headquartered. The company warned guests in an email to “expect to have very heavy traffic,” while taxi drivers complained about the congestion caused by the flow of cars flocking to the venue. “It’s all because Alibaba’s 20th anniversary—the whole city is on fire,” said a taxi driver surnamed Geng.
The company Ma founded with friends out of his apartment in 1999 is now valued at $460 billion—and along the way he became the strongest symbol of China’s rise as a technology power. He’s now a fixture at global events featuring economic titans, such as Davos, putting his language skills from his former career as an English teacher to good use with off-the-cuff playful remarks—he got even Jeff Bezos taking notes as Amazon was entering China.
“That separates him from many of his Chinese peers,” said Brock Silvers, managing director at Shanghai-based private equity firm Kaiyuan Capital. “And his overseas efforts have helped pave the way for future generations of Chinese executives, which means his legacy in this regard will be significantly beneficial.”
Ma’s ability to stand out from a bunch of largely face-less Chinese executives helped build faith among investors in his business empire, which in addition to e-commerce sites for everyone from individual sellers to foreign brands, includes supermarkets, mobile payments, and cloud computing. And that’s not to speak of its investments in e-commerce and payments overseas.
Compared with low-profile Pony Ma, the founder and CEO of Tencent, China’s other tech behemoth, Ma comes across as candid and down-to-earth. His over-the-top performances at company events—in 2017, Ma dressed as Michael Jackson and danced to Billie Jean—also suggested he’s someone who doesn’t take himself too seriously.
Despite Ma’s personal influence on Alibaba—where he’s seen as much as a spiritual mentor as an executive, presiding over group weddings of Alibaba staff each year (see feature photo) and drawing on martial arts adventure epics to inspire the company’s more than 100,000 employees (pdf, p. 183)—his retirement is unlikely to have a major impact on the company.
The succession plan for Ma to transfer the chairman role to the more low-key Daniel Zhang, who replaced Ma as Alibaba CEO in 2015, has taken almost a decade to complete—setting a “gold standard,” for succession for Asian companies, which often become mired in squabbles over the next generation of leadership or hamstrung by unforeseen events.
Ma wrote last year when he announced his retirement plan that Alibaba had graduated from a company that relies on individuals, to being a firm that flourishes on collective excellence. He described Zhang, who’s credited with coming up with the idea for the company’s megahit Singles’ Day shopping festival, as someone “who has the guts to innovate and test creative business models.”
After Sept. 10, Ma plans to spend more of his time addressing China’s problems, in particular the issue of training better teachers for rural areas, through his foundation set up in 2014. Next month, he’ll also be at the first Africa Netpreneur Awards, to announce the winner of this year’s $1 million prize, continuing his role as the face of Chinese entrepreneurship.
In a reassuring sign, the company reported stronger-than-expected second-quarter results last month, thanks to both cloud computing and a strong online shopping performance that defied a slowing Chinese economy and uncertainty from escalating trade tensions with the US.
Ma will remain on Alibaba’s board of directors into 2020, and is also expected to exert influence after his retirement through the Alibaba partnership, consisting of a group of company veterans that develops future talent for the company. Alibaba said in a statement to Quartz that Ma “is and will remain an integral part of Alibaba. While he won’t be participating in the day-to-day operation, he will continue to offer guidance and opinions.”
More than other large Chinese tech firms, Alibaba has had to compete with foreign players—with both eBay and Amazon entering five years after the company was founded. But Ma’s journey to becoming a tech billionaire has also come in a tech sphere increasingly shaped by Beijing’s protectionism of domestic tech firms, which coupled with its desire to control flow of information on cyberspace, has resulted in many foreign players being blocked from entry.
“Beijing could have opened its market to foreign players but it hasn’t,” said said Tai-leung Chong, an associate economics professor at the Chinese University of Hong Kong. “So to an extent we can say these Chinese companies can develop to such a massive scale partly thanks to government nurturing.”
In return, staying on the right side of the Chinese Communist Party is essential for Chinese entrepreneurs—many of whom are party members, including Ma himself, as the state-run People’s Daily confirmed when it announced he was on a list of entrepreneurs that China recognized last year as having made an outsize contribution to the country. At times, this balancing act has teetered too far in heeding signals from Beijing, at least in the eyes of foreign observers.
An example of this was Ma’s controversial transfer of ownership of the digital payments platform Alipay out of Alibaba to another entity controlled by him after China’s central bank in 2010 required third-party payment providers to apply for licenses. Yahoo, then a major Alibaba shareholder, said it only found out in 2011, seven months after the fact. The move, Alibaba said, was one that had been discussed, and was “in the best interests of the company” given the upcoming deadline.
To many it was an unconvincing explanation for failing to keep shareholders in the know. It didn’t help that Ma, in a business program on state broadcaster CCTV around that time, had said he could “donate Alipay” (in Chinese) to the Chinese government if needed—a nod to China’s concerns about the financial risks posed by digital players. Alipay is now under Alibaba’s fintech affliate Ant Financial, which is valued over $150 billion.
More recently, Ma praised the one-party political system for its stability in late 2017. The same week, he called on Facebook and Google to “follow the rules” in order to do business in China, speaking at the World Internet Conference in Wuzhen, an annual event where Beijing promotes its own more restrictive model of the internet. The most recent example highlighting the intertwined relationship between the Chinese tech giant and Beijing involves an unlikely hit app, reportedly developed with the help of an Alibaba unit, for party members to study the thinking of Chinese president Xi Jinping.
After Xi took over as party general secretary in 2012, consolidating power around himself, executives are increasingly under pressure to voice their support for Beijing’s objectives, said Kaiyuan’s Silvers. That creates increasing risks they could take a position at odds with shareholders.
“The world has changed in the years since the Xi administration came to power, and the whole of corporate China now seems more comfortable publicly supporting Beijing’s political mandates. This includes [Alibaba], and Ma has been an effective ambassador with a reassuring manner,” said Silvers, adding “This is a difficult and worsening issue for China’s offshore corporates, and one likely to continue to bedevil the ‘retiring’ Ma.”