'Crazy' Jack Ma Set to Dominate The World
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Jack Ma , founder, chairman and CEO of the Chinese Web site Alibaba.com, took the stage yesterday at Yahoo's analyst day and boldly proclaimed that his company will take on all comers in the Chinese marketplace.
These comers include eBay, Google and Baidu, and Alibaba may well emerge as one of the top Internet companies in the world.
In August, Yahoo bet big on China, with a $1 billion dollar investment in Ma's Alibaba. The Yahoo investment is going a long way to help Ma and his dream of having a company that can influence China, Asia and, indeed, the world.
"I believe that e-commerce is going to change China," Ma said. "People call me crazy Jack. People call me stupid Jack. But whatever they call me, I still believe in e-commerce."
According to Ma, there are five key elements to Alibaba being successful at e-commerce in China.
The first one is e-marketplace, which Alibaba has in the form of its Alibaba portal and its TaoBao auction site.
The second element is the trust record, which is something that Ma noted over 160,000 companies have built up on Alibaba and over 15 million individual users.
Payment is also critical. To that end, Alibaba recently launched AliPay, the PayPal equivalent in China.
Alibaba CFO Joe Tsai considers AliPay a key driver of the company's success and e-commerce in China.
"Our own estimate is that the online payment market in China was worth $700 million last year, and AliPay was really the main driver," Tsai said. "We occupy over 40 percent of that market."
Tsai noted that AliPay is different from other payment systems in the market since AliPay is an escrow-based system.
"What that means is that it addresses the issue of settlement risk," Tsai explained. "Settlement risk is someone pays the cash and the other side has to deliver the goods. How do things cross in the middle and get settled?
"This is a true issue for e-commerce in China and it's a very serious issue, which, in the past, has hindered the growth of e-commerce in China."
AliPay solves the settlement risk issue by escrowing the cash until the goods are delivered.
"Through this payment system, we are actually able to increase the liquidity in the TaoBao marketplace."
Beyond pure-play e-commerce, Yahoo is the key to Ma's plans to dominate search in China.
"Today I don't see a real search engine in China," Ma said, discussing the fourth element. "Baidu is good. Google is good. But we have not started to compete yet. We will start in September."
And the fifth element of e-commerce success in China?
"We're probably going to launch No. 5 in the next two years, but today I'm not supposed to tell you about that," the charismatic Ma said.
The man from China with big ideas is not limited in his dreams to China alone. He believes a Chinese company can be a world leader.
"In 10 years, among the top-three most powerful Internet companies in the world, one of them will be from China," Ma predicted. "Among fortune 500, one will be a China private company, not a state-owned company.
"Whether Alibaba will be lucky enough to be one of top three Internet companies or Fortune 500 companies I don't know, but that's the goal we are looking for."