What makes Jack run?
Ex-Alibaba exec says Jack Ma will disrupt, not destroy China’s old economy in ‘additive’ role
He’s turning China’s old economy on its head, schmoozes with top Trump officials, is the go-to guy for stateside Chinese investments and tries to soothe Sino-US trade frictions. And oh yes – he does Michael Jackson dance routines at company parties.
He’s Jack Ma, the mercurial founder of China’s Alibaba Group. Ma, 53, spent nearly 20 years somersaulting his way through the technology shifts that transformed Alibaba into one of the world’s biggest companies. But as such changes continue to shake China and the rest of the world, stirring larger political and economic questions, speculation is growing about Ma’s future.
Has he become too powerful in China? Will his wings be clipped? How close is he to President Xi Jinping? Is he harnessing technology to destroy China’s old economy? What is Ma trying to achieve in Washington, and what are his real goals in life and business?
Porter Erisman is a former Alibaba vice-president who joined the fledgling e-commerce company in 2000, soon after Ma moved it out of his apartment in Hangzhou, China. He has a good handle on these issues.
Does Ma really want to be a disrupter of China’s old economy? “Yes and no,” Erisman told Asia Times. He says there are a lot of misconceptions – about both Ma and China’s economy in this regard.
Some analysts argue that China’s government has given Alibaba and Internet holding company Tencent the green light to shake up old-guard finance, retail and manufacturing firms in a freeing-up process known as “creative destruction”.
But Erisman thinks there’s a problem in making too literal a comparison between creative destruction in the US vs China. He notes that China has built a modern industrial and consumer economy from scratch in less than 50 years. Its economic infrastructure is younger and less entrenched than the United States’.
In retailing, for example, Erisman says it’s not a question of 1930s Macy’s department store models colliding with the online power of Amazon and Jeff Bezos. China’s retail sector is relatively advanced, is well wired and has less obsolete infrastructure blocking its way.
“E-commerce in the US has been very destructive, but it is more additive than destructive in China,” said Erisman, the author of Six Billion Shoppers, a recently published book about the impact that e-commerce is having on the developing world.
“Jack is a disrupter – especially when you look at banking and finance … But when you talk about his frame of mind, I’m sure his greater goal is to disrupt banking and finance in China in a very big way.”
“China is different because it never had the chance to build up a really sophisticated physical retail infrastructure. Traditional businesses didn’t take root,” he added. “E-commerce in China is more additive and creative.” Ma, according to Erisman, has also sought to make Alibaba a creative resource for the nation’s manufacturers and entrepreneurs and do the “right thing for China’s economy”.
At the same time, Erisman notes that Ma “always likes to challenge the status quo”.
“Jack is a disrupter – especially when you look at banking and finance. He’s tiptoeing into that. But when you talk about his frame of mind, I’m sure his greater goal is to disrupt banking and finance in China in a very big way,” said Erisman, who made an award-winning documentary, Crocodile in the Yangtze: The Alibaba Story, based on his experiences with Ma’s fledgling enterprise.
His assessment dovetails with a recent Bloomberg interview in which Ma was asked about the role Alibaba is playing in reforming China’s state-owned enterprises and battling entrenched business interests.
“We are pushing that, and this is why a lot of banks don’t like us in China. We’re not necessarily interested in buying the banks to change it, but because of us chasing them around, they reform,” he said.
Ma close to Xi?
Erisman says Alibaba’s biggest challenge has always been the likelihood that its growing power would invite a “big bear hug” from China’s government. Has that moment arrived? He doesn’t know.
“Jack’s motto is ‘be in love with the government but don’t marry it’,” Erisman mused.
But he says, on the upside, that Chinese officials have clearly allowed Ma to “become the face of China Inc”. They also view Ma as a good ambassador to represent China abroad. Erisman also notes that Xi was party secretary of eastern China’s Zhejiang province when Ma was building up his company in the provincial capital Hangzhou and that the two are believed to have a “good relationship”.
He has heard that Xi calls Ma occasionally for his perspective on important issues. So it’s still anyone’s guess if his power waltz with the Chinese leadership will continue or has come to an end.
Is Ma as visionary and ahead of the curve as some make him out to be? “If you take into account that he’s a guy who started his company in an apartment and is now worth US$450 billion, the answer is yes,” Erisman said. “Jack has what I would say is typical of the visionaries, the entrepreneurs of our time – like Mark Zuckerberg and Steve Jobs.”
Ultimately, what is Ma trying to do? “He measures his success in terms of the impact he has on society and the economy. This is what motivates him,” Erisman said. “He also likes to be in that leadership position. He also likes to be the one making the biggest amount of change – so Jack is very competitive in that regard.”
But Ma also knows how to build bridges and hone personal ties. Erisman says one of Ma’s closest friends is Yahoo co-founder Jerry Yang and that he has always been an active player in global power circuits like the Clinton Global Initiative.
“Jack is probably the most internationally savvy Chinese CEO out there,” Erisman said.
What’s with the Michael Jackson imitation? He says Ma, whose parents were traditional folk musicians and storytellers in China, has always been a bit of a ham. “He’s definitely a showman,” Erisman said.