Alibaba: The House That Jack Ma Built pdfdrive com

Born Again: Taobao and the Humiliation of
eBay
Among China’s leading businessmen, Ma is known for his bombastic comments.
He routinely uses eBay as a dartboard while simultaneously praising it as one of
the companies he most admires.
—
San Francisco Chronicle
“The pioneers take the arrows, settlers take the land” is a phrase often used to
describe the conquering of the American West. As a new frontier known as the
Internet unfolded in China, Jack was determined to become one of the settlers.
He’d already been a pioneer with his early experience of going online in Seattle
in 1995. But with his first Internet venture, China Pages, he’d taken an arrow
from his state-owned partner, leaving the portal pioneers (Wang Zhidong of
Sina, Charles Zhang of Sohu, and William Ding of NetEase) to become the
settlers, the first Internet entrepreneurs in China to lead their companies to an
IPO. To close the gap, in September 2000, Jack invited the three portal founders
plus Wang Juntao—the chairman of consumer e-commerce venture 8848—to a
martial arts themed business conference entitled “Sword Discussion by the West
Lake” (
xihu lunjian)
1
that he hosted in Hangzhou. I chaired a roundtable
discussion at the event, held to promote the city as a “Silicon Paradise.” Jack
announced that Alibaba would move its China headquarters from Shanghai back
to Hangzhou. This was designed no doubt to please the governor of Zhejiang and
mayor of Hangzhou, who were among the local dignitaries in attendance. But I
quickly understood that the event, in particular the participation of the four
leading Internet figures of the day, was convened to demonstrate Alibaba’s
continued relevance in China’s Internet sector. Even though the company had
not yet secured an IPO, Jack wanted to stay in the limelight. Jack pulled this off
with a clever idea: inviting VIP guest Jin Yong, the Hong Kong author who had

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been an inspiration to Jack since his childhood. He knew Jin Yong would be a
big draw to the other Internet founders, too.
Shortly after Jack’s Hangzhou gathering, two of the four China Internet
pioneers were felled. Wang Juntao, the chairman of consumer e-commerce
pioneer 8848, was forced out by investors nervous about the mounting costs
incurred to overcome payment and logistics hurdles. Wang Zhidong, the founder
of Sina, was deposed in a palace coup,
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 victim of the company’s fractured and
fractious shareholder base.
Now only Jack, William Ding, and Charles Zhang remained at the helm of
the companies they had founded. Alibaba was surviving, but the business-to-
business e-commerce model he had chosen to follow was proving a struggle. In
the closing months of 2002, as Alibaba edged toward profitability, Jack started
to look at a new direction for the company: targeting China’s consumer e-
commerce market. Two models from the United States stood out: Amazon and
eBay.
Mimicking Amazon, 8848 had already folded. But two other domestic
“etailers,” both set up in 1999 when they had successfully raised venture
capital,
3
had survived, selling books and other products at fixed prices:
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Dangdang.com, run by cofounder Peggy Yu (Yu Yu), who had started her career
as an interpreter and secretary at a boiler manufacturer before studying for an
MBA at New York University, and Joyo.com, founded by Kingsoft’s Lei Jun
(later of handset vendor Xiaomi fame) and run by Diane Wang (Wang Shutong).

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