Monday, 10 September 2018

Ali Baba's Jack Ma to retire.

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 Jack Ma will on Monday unveil succession plans at Alibaba, but in reality
he has spent a decade setting the stage to step back from the Chinese tech company he founded almost 20 years ago.Mr Ma handed over the reins as chief executive in 2013, first to Jonathan Lu. Daniel Zhang, who replaced Mr Lu two years later, shoulders the bulk of the day-to-day running of the company along with platoons of business heads. “They have a lot of generals,” said Duncan Clark, who runs consultancy BDA and has authored a book on Alibaba.Nonetheless, his planned retirement— to focus on education and philanthropy — marks a new era for the world of China tech, most of which is barely 20 years old. Mr Ma has eschewed the traditional Chinese business model, long in evidence in Hong Kong, of passing the baton to sons (mostly) and daughters. Instead, the next generation has been groomed from the ranks of employees.But Mr Ma, a former English teacher, has always been something of an anomaly: the head of one of the world’s biggest tech companies who does not understand coding but revels in showmanship; and an admired but somewhat accidental business leader: in his case, he has joked, the C-suite acronym should stand for Chief Education Officer.Thus, he has focused on being the very public face of Alibaba and its big vision man, spinning long-term strategy and fostering the company’s strong corporate culture from an inner sanctum on Alibaba’s vast campus in Hangzhou.He also spends much of his time on the road — 40 per cent according to the South China Morning Post, which Alibaba owns — pressing the flesh with heads of state, launching joint initiatives or encouraging young entrepreneurs in Africa.That is in contrast to Pony Ma, his opposite number (and no relation) at Tencent. The two companies dominate China’s tech sector, but Tencent’s more low-profile Mr Ma — who is chief executive and chairman — is more involved domestically, according to company insiders, especially when it comes to dealing with government and regulators.Yet the more peripatetic Mr Ma at Alibaba is still careful to adhere to Beijing’s message, at least most of the time. He has championed a “digital Silk Road” to complement Beijing’s Belt and Road Initiative; and generally acts as the “soft power” face of China, speaking to packed-out meetings at the likes of Davos.That role, analysts say, is unlikely to disappear completely. Mr Ma is a lifetime member of the 36-member Alibaba partnership, which nominates some board members and is the torchbearer for the group’s corporate mission and culture. He is also a shareholder and has jointly invested with Alibaba through his Yunfeng Capital fund.His philanthropic interests, too, are likely to merge. Alibaba has donated funds to help eradicate poverty, which again chime with government aims; protect the environment; and towards education. By contrast, he has “detached himself from day-to-day operations of the company”, since stepping down as chief executive, said one person familiar with the group, leaving other executives to manage the business.“It didn’t make a jot of difference when he stepped down in 2013,” said Mr Clark. “But inevitably Jack is a symbol. Like it or not, what he does is going to be interpreted differently.”Some of that was in evidence on Chinese social media at the weekend. In a nod to the souring sentiment on China tech, “Qingdao Uncle” posted on Weibo: “Retreating from the front line at a time like this — how wise!”Mr Ma has never hosted an earnings call, which instead are handled by Mr Zhang, executive vice-chairman Joe Tsai and chief financial officer Maggie Wu. While Mr Ma delights in comp√®ring the all-singing all-dancing gala that accompanies the group’s annual Singles Day, Mr Zhang is the event’s architect and heavily involved in ensuring the 24-hour shopping frenzy proceeds smoothly.Similarly, while many of Alibaba’s initiatives carry his imprimatur, they are increasingly led by the next generation. Mr Zhang is driving new retail — the blending of online and offline shopping — through operations such as the Hema supermarket chain where consumers can shop, order deliveries or eat in situ. Mr Zhang is likewise championing Alibaba’s grand plan for global trade without frontiers, which kicked off last year with a bilateral deal designed to ease the passage of goods shipped by smaller businesses between China and Malaysia.

 This week’s meetings illustrate the dynamics. Mr Ma will be in Russia to attend the signing of a partnership with Russian internet company — the group’s long-awaited deal in the country after its proposed initiative with Sberbank fell through— but will not lead the ceremony.Another sign of his advance planning came in a regulatory filing this year that restructured the company’s variable interest entity (VIE), the vehicle adopted by scores of overseas-listed Chinese tech companies to get round mainland rules that do not allow sensitive assets to be held by foreigners.Alibaba this year inserted extra layers of ownership, so the VIEs are no longer owned by just a few people, including Mr Ma. The move, criticised by some for adding complexity, was aimed at reducing “key man risk”, Alibaba said.As the countdown to retirement drew closer, Mr Ma grew more expansive on plans for his next act in an interview with Bloomberg TV on Friday, saying there was much he could learn from Bill Gates, Microsoft founder and philanthropist. “I can never be as rich as Bill Gates but one thing I can do better than him is retire earlier,” he said.

Financial Times.

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