60 Minutes: Alibaba Review
Lara Logan sat down with Jack Ma, the founder of Alibaba, the world’s largest e-commerce company. Alibaba is larger than Amazon and eBay combined and went public this month on the New York Stock Exchange and became one of the most valuable in the world.
Everything about Alibaba is unconventional, including Jack Ma, who is now famous across the world. Over a year ago, 60 Minutes talked to Jack Ma and they aired parts of that interview alongside a biography of Jack Ma.
60 Minutes: Alibaba & Shareholders
Jack Ma said that the shareholders in his company have almost no say. Customers come first. He said if they don’t want to invest because of that, then that’s fine. He respects shareholders, but they come third after customers and employees.
This unconventional view didn’t stop Wall Street from pouring $25 billion into his company.
60 Minutes: What Is Alibaba?
Alibaba is an internet shopping behemoth, where buyers and sellers connect to do business. Most of the company’s money comes from advertising and small transaction fees.
On Alibaba’s most popular site, Taobao, users talk to each other, barter, and engage in a way that doesn’t happen in American e-commerce sites.
Alibaba has close to 1 billion products for sale. Jack Ma said anything you can imagine can be bought on the site, as long as it’s legal.
5 or 6 years ago, Alibaba wasn’t even making a profit. In 2002, Alibaba made one dollar in profit. Today, the company makes billions of dollars. It’s also created hundreds of millions of internet consumers, a whole new social class in Communist China, people who never had access to modern commerce before Jack Ma came along.
Now, they have 500 million registered users, only a little bit more than 40 of China’s population. Over 100 million people go on the site every day to shop and 30 million transactions are finished every day.
60 Minutes: E-Commerce In China
When Jack Ma dreamed up Alibaba in 1999, the online world looked different. The most popular search engine was Yahoo, not Google. There were no iPods, iPads, or iPhones. Only 4 out of 10 American homes had internet connections and the internet barely reached to China. Retail stores were rare outside of the big cities in China. Most of the country had no package delivery or credit cards. The only way to buy was face-to-face and in cash.
Jack Ma said that no one believed China would have e-commerce, because there was no trusted system in China. He had to show them that they could trust Alibaba with their money. He did this by guaranteeing the transactions and creating his own payment system, an escrow account where Alibaba holds the buyer’s money until the goods are delivered.
Now, anyone, rich or poor, with access to the internet and something to sell can contact to hundreds of millions of people on one of Alibaba’s websites. Ordinary people in China who never had a way to do business before now have a way to do it. This created millions of jobs and made him a hero to millions of Chinese people.
60 Minutes: Jack Ma’s Childhood
Jack Ma grew up poor in Southeastern China in the 1960s, when the country was cut off from the west. In 1972, Richard Nixon came to Jack Ma’s hometown. It was the first visit by a U.S. president to Communist China and the city became a mecca for foreign tourists. Through them, Jack Ma got his first glimpse of a world outside of China. Even his name, Jack, came from an American tourist.
Jack Ma would offer free tours to tourists in exchange for free English lessons. Jack Ma never studied in the U.S. He had no status, connections, or money. He also failed the college entrance exam twice.
He also said he felt rejected by people because he was small and skinny and not handsome. He also said they didn’t like the way he talked.
But ultimately, he was able to get into school and become an English teacher.
60 Minutes: Jack Ma & The Internet
Jack Ma first saw the internet in 1995, when he came to the U.S. as a translator. Someone told him to search something on the internet and Jack Ma had never used a computer or a keyboard before. He didn’t know how to type and he was worried about breaking it.
But he searched for “beer”. He saw that American beer, German beer, and Japanese beer. But there wasn’t any Chinese beer. He searched for China, but there wasn’t anything on China, either.
“I came back and I said, ‘I want to do something called internet,'” he said.
60 Minutes: The Creation of Alibaba
His first two ventures failed. Four years later, he convinced some friends and former students, most of whom had never used the internet, to invest in him and his vision for Alibaba. With just over $50,000 in seed money, the company was born.
Today, the company is valued at $231 billion. Ma’s personal fortune makes him the richest man in China and one of the most influential.
60 Minutes: Alibaba & The Chinese Government
Jack Ma said that the Chinese government cares about Alibaba, because he helps stabilize the country. He provides a lot of jobs. He also said that he has a firm rule at his company to never take money from the government or China banks. It was important to him that if the government comes to him with a job, he can recommend them to a friend who is interested in doing it. Or else, he’ll do the job, but he’ll do it for free and ask them not to come to him again. But he said they have a good relationship with the government.
“I have a very strict talk to my team. Never, ever do business with government. You love them. Don’t marry them,” he said.
Alibaba also benefits from Chinese government policies that make it difficult for foreign competitors to operate there.
60 Minutes: Does Alibaba Give Info On Chinese Citizens To The Government?
Alibaba gathers more information on Chinese citizens than anyone in the country. Lara Logan asked him what he does when the government asks for that information.
He said that if the government needs the information for national security, then he would have to give it up. He also said he believed that Google and Facebook have to do the same if something threatened the national security of the USA.
60 Minutes: Alibaba In The U.S.
Jack Ma said that Alibaba gives a great opportunity to American businesses, with the potential for hundreds of millions of Chinese consumers for products made in America.
“We come to help, not invade,” he said.
He said that Alibaba can help American businesses in China better than anyone else, because they have 100 million buyers today. In three years, he said, there might be 300 million.