Bloomberg: Alibaba no longer needs Jack Ma
- Tram Ho
Alibaba needs to overcome Jack Ma’s era quickly. Thankfully, the Chinese e-commerce giant’s latest revenue report shows it’s managing to do just that.
Alibaba’s revenue and operating profit hit new record highs despite a 3.9% decline in the Chinese economy’s retail sales due to the effects of the Covid-19 pandemic in 2020. Meanwhile Alibaba’s newer businesses, such as cloud computing and logistics, continue to grow stronger.
More importantly, Alibaba can escape any impact from the Chinese authorities’ aggression with Ant Group, a fintech company in which Alibaba has a stake. It was these moves that led to Ant’s dual IPO being canceled when there were only a few days left to go public.
Looking to appease investors, Alibaba’s current Chairman and CEO Daniel Zhang explained that spending on the e-commerce platform isn’t driven much by Ant’s financial products.
This is important as there are many indications that Ant’s business model could be altered, including the separation of payments from loans. Alibaba currently owns a 35% stake in Ant and receives a portion of the profits from the company.
However, Ant’s core product, Alipay, has been the key to unlocking e-commerce potential in China over the past two decades. The provision of credit services, such as micro-loans, further strengthens the spending power of consumers and helps merchants profit. However, Zhang sought to downplay that role, pointing to the existence of other auxiliary channels.
Meanwhile, Jack Ma has been the driving force behind Alibaba for more than 20 years and retains his position as a spiritual leader. However, Ma left his position in September 2019 and transferred the position of Chairman and CEO to Zhang. This has no effect on Alibaba and its market capitalization has risen to a record $ 352 billion in the 12 months since Jack Ma left.
At the end of October 2020 at a forum in Shanghai, Jack Ma criticized the rules of the Chinese financial system. It has had dire consequences. At the last minute, Ant Group’s IPO was canceled at the request of regulators, who thought its business model needed a reexamination.
Alibaba is inevitable. Company shares fell 30% over the next two months and Ant’s valuation looks to have halved. Now, Alibaba is also in the spotlight when authorities announced on December 24 that it had begun an investigation of the company’s antiprust violations. In an official statement, Alibaba said it was cooperating with the investigation agency.
Chances are, Ant’s business model as well as Alibaba’s perception of monopoly will still attract attention even if Jack Ma has no criticism of the Chinese management. However, the fact that Jack Ma spoke and paid the price. The man among China’s richest and most influential people has been quiet for months after his announcement. In the new move that happened on February 2, Jack Ma’s name was removed from the list of China’s greatest entrepreneurs in technology announced by the country’s media. These are clearly not coincidental.
Talking about operations after Jack Ma left in September 2019, Zhang noted the importance of opening up new services, such as grocery stores and cloud computing, even as it could damage key Alibaba operations.
“If we don’t kill our current businesses, someone will do it,” Zhang once told Bloomberg.
While new entities are thriving amid the impact of the Covid-19 pandemic, alternative financial platforms are available for consumer lending and hopefully avoid encountering governance. strict management of the authorities. That clearly shows that Alibaba is doing without Jack Ma, the founder who has associated his name with the Chinese e-commerce giant for decades.
According to data updated by Forbes on 2/2/2021, Jack Ma’s net worth is currently worth $ 61.3 billion. Before the incident of Ant, Jack Ma was one of the most admired business people in China. Coming from an English teacher, Jack Ma and his co-founders built one of the largest e-commerce empires in the world.
However, the future of Jack Ma is still questioned by many, especially when he has caught the eye of Chinese managers.
Source : Genk