Interview with Alibaba.com‘s CEO, Jack Ma1

Jack Ma: I think the most important thing is that we believed in our dream from day one, to today and tomorrow. I remember when I talked about my story for B2B and e-commerce in 2000. Everybody thought that I was crazy. Of course we made so many mistakes, like any company, but we never gave up the hope of making sure our dream came true.

Bulletin: You are often called the underdog, yet you rub shoulders with some of the world‘s most powerful movers and shakers. Are you getting tired of this label?

JM: I don‘t want to be recognized as a successful businessman, because one of the dreams that I wanted to realize when I set up my company in 1995, China Pages, was if Jack Ma can be successful then 80 percent of young people in and around the world can be successful also. We are just normal guys. If you work hard, if you learn quickly, then I think anyone has the chance. I don‘t think I am a successful businessperson. You have to create something: You create value for people, you help people, and then people help you. As a business, that is the result, not the process. Life is more fun than that.

B: Before setting up Alibaba you started China Pages, then helped MOFTEC and, more recently, established Taobao and AliPay. Do you have any more ideas up your sleeve?

JM: Yes. With e-commerce in the whole environment is not good enough. People complain about trust, people complain about payment, people complain about security. But we say, ?What is the use of complaining?? Build up the systems to deal with these issues. So we built up the trust. We built up the payment. We built up the online security. Then people say, well everybody is using pirated software. So we say ok, let‘s build a cheap software for those SMEs to use that they can afford. So that is Alisoft that we are going to release pretty soon. As an entrepreneur, don‘t complain about problems. Build solutions for them.

B: Many businesses try to sign up large corporate clients, but you seem to be focused on SMEs. Why?

JM: We are interested in catching shrimp, not the whales. When you catch shrimp, then you will also catch the whales. I think that is one of the reasons that we have survived. We bet on ‘s economic growth based on private SMEs. Five years ago, we said the main engine of ‘s economic growth will be SMEs and the private sector. So we said let‘s help these SMEs. Let‘s help the private sector. Let‘s help them with e-commerce. Let‘s help them to have more competitive power through using the Internet. We were lucky to have been there, because we created value first, then we thought about making money from them. So if they make RMB5 million a year, we say give us RMB5,000. That is fair. We have hundreds of thousands of customers, so we never worry about one customer leaving and then the whole company is in trouble. In , when doing business, always remember population. You have got the numbers. Without numbers, you will never win.

B: How did you establish trust among Alibaba users?

JM: In 2003, when we had one million free members, everybody was complaining: I don‘t trust this guy, etcetera. So I told my team let‘s build up a trust system, which we set up as TrustPass. Users pay RMB2,300, which we use to hire a third party to verify them. The second thing is that you should recommend five people who can vouch for you and you also need to list all the certificates/business licenses that you have. The third thing is that anyone on Alibaba who has done business with you should make a comment. At the beginning, it was very difficult. People said no one using an online B2B platform wants to make any comment. But we kept with it for four years. Now, we are becoming like a standard in . Over 200,000 companies, mainly SMEs, are using it. If you have a TrustPass on Alibaba, your feedback is seven times more than a free member. The other thing is many importers from Europe love TrustPass.

If you don‘t have it, they say go get it. Also, a lot of people are starting to print TrustPass on their business cards, so we think this has a lot of potential.

B: Why did you decide to take over Yahoo! instead of Google or Baidu?

JM: Well, first, Google was difficult to take over last year. It is so big and so successful, we wanted to, but it was very difficult. Baidu didn‘t have the synergy that we needed. We needed a global platform that can help Alibaba go global quickly. We needed a global partner on technology. So with all these aspects, we think that Yahoo! is the most suitable.

B: There seems to be a perception that "bigger is better" when it comes to online businesses. Do you think this is the case?

JM: No. I don‘t think bigger is better. First you have to make your business good, useful and valuable. Then, if members believe it is good, more people will join, so bigger is a natural result. A lot of dotcom sites try to make their sites bigger and bigger, but in the end, they do not create the real value.

B: Do you want Alibaba to be the world‘s biggest B2B platform?

JM: Of course, that is our dream. It costs nothing to dream. We want to make it big, but we have to keep on making it better first. Then bigger will be a natural result.

B: You still haven‘t declared that Alibaba will go public, why not?

JM: I think going public is like going to the gas station: You get the gas and keep on driving. We still have plenty of gas so can keep on driving. We are very profitable and have a lot of things we want to do that we have not done yet. And in the market, at least today, it is better for a company like Alibaba to be private, rather than to be public. But we will go public, we just don‘t have specific timetable for that yet. But we will be there.

B: Where does most of your revenue come from?

JM: Alibaba B2B. This is very profitable, very successful. It keeps on growing steadily and we believe it has a big future. Most of the income is from membership services and renewals. People love it and pay year after year, so it has become a community-based membership.

B: Where do you think eBay went wrong?

JM: They made some mistakes, and we were lucky that we made some good decisions. Of cours,e we also made a lot of mistakes, but maybe not as many as they did. I think that just because we won against eBay it does not mean we will win e-Bay . For Taobao, as to whether it will be successful or not, we will have to wait and see. If Taobao is bigger than eBay Global, then that means our dream and our vision are right, because I believe that the market is bigger than the online retail market. Toda,y we are just beginning, but five years later we will see.

B: You‘ve developed an online payment system, AliPay. What are your ambitions in the financial services area?

JM: We have over 160,000 Websites besides Taobao that are using Alipay as an online payment system in , so it has already become kind of a standard in . We are the largest online payment system in , and we also have the largest market share. We will keep on growing and this is my favourite baby today.

B: Do you plan to make it a globally accepted payment system like PayPal?

JM: Yes, that is why I called it Alipay, not Taobao-pay. People know Alibaba but they may not know Taobao. Maybe some day it will be global, but if you have a global view, you need to win first. will be a global market in the future so we want to win the market first.

B: Is setting up an online business in more difficult than in other countries?

JM: To me, I don‘t think it is difficult in . You see entrepreneurs every day setting up Websites and businesses. Doing business is easy in . But, to be successful, like anywhere else in the world, it is difficult.

B: What are the most common mistakes people make when trying to do business online in ?

JM: Arrogance, maybe. Many multinational companies come to thinking they know everything about business, but the environment is a little bit different in . Also, a lot of people are tech-oriented: They love the technology, but maybe their customers don‘t like it.

B: It has taken some time for people to get comfortable about shopping on the Internet. How do people in feel about buying online?

JM: That is where the potential lies. You know this is the trend, not the fashion. People in are going to shop online, whether it is five or ten years later. If shopping online is now difficult, then that is an opportunity for us. You have to figure out how do you convince people: How do you make them comfortable with it? We do this little by little. The more you do the more comfortable people become. So I never think of the problems as negative, but rather just the opposite. In , we now have 120 million Internet users, and now close to 30 million people are using online shopping. That still leaves about 90 million people who are not shopping online.

B: What advice would you give to any one thinking of starting an online business in ?

JM: Believe in your dream and believe in yourself. Do it because you want to do it, not because the investor wants you to do it, and not because other people want you to do it. Don‘t give up the dream and do anything you can to make sure you are getting close to your dream every day. Find good people, get your customers to love you and stick to that. Learn quickly, and learn from others the tactics and the skills, but don‘t change your dream. I remember in 2000, I said if there are nine rabbits on the ground, if you want to catch one, just focus on one. Change your tactics if you need to, but don‘t change the rabbit ? just stick with it. There are so many opportunities in that you cannot catch all of them. Get one first, put it in you pocket and then catch the others.