Jack Ma (Ma, Yun), “Alibaba” of China’s E-Commerce Business

Alibaba Group, even only with 12years history, is one of the biggest e-commerce platforms for small businesses in the world. Its business includes: Alibaba. com, which is for small firms to find customers and suppliers without going through middlemen, has 57million users, nearly in every country. Another marketplace, Taobao. com, is for individuals buying goods from each other; it has 300million customers and $29 billion-worth of goods. Also, China Yahoo! , One of China’s leading Internet portals, was acquired by Alibaba in 2005 as part of its strategic partnership with Yahoo!

Inc. In 2010, the revenue of Alibaba Group increased by 49% and with 47% profit increase compared to 2009. It had been named by Forbes as one of the best B2B platforms in the world for 5 years. Jack Ma (Ma, Yun), the founder of Alibaba, is the key to lead the success of Alibaba. Ma was chosen by the World Economic Forum as a “Young Global Leader” in 2001; He was named one of the “25 Most Powerful Businesspeople in Asia” by Fortune in 2005. He shows his charisma always, in front of his employees, and also be admired by all youngsters in China who dream to found their own companies.

Jack Ma reveals his transformational leadership from the set-up stage. By envisioning his vision and the desirable future, even though without any promises of return, he built up an 18-“Arhats” team to start this “new concept” business in China. After developing B2B business, Jack Ma has created and grasped big opportunities in these 12 years in C2C platform, online payment system, loan service, etc…huge investments didn’t give him and his team any chances to retreat, with the high expectations ; inspirational motivations, his team has gained successes of almost all strategic business plans.

But recently in Feb, 2010, Alibaba admitted that it had granted “gold” global suppliers (a mark of supposed integrity) to 2,236 dealers who it says subsequently defrauded buyers globally in 2009 and 2010. The top two executives at Alibaba. com have resigned to accept responsibility. In the statement from Alibaba, an internal investigation had found that about 100 sales staff and “a number of supervisors and sales managers” were “directly responsible in either intentionally or negligently allowing the fraudsters to evade” various controls.

Conclusion of the investigation report is: Excessive pursuit of performance makes the sales/managers to obtain short-term economic interests by any means, leading to the persistence of fraud. Jack Ma expressed his pity to lost 2 good leaders, especially when they were not personally involved in the fraud for any direct benefits. But Alibaba should be holding on the ethical principles, customer first value. Jack Ma emphasized that Ethics is the baseline when pursuing for performance. Although CEO or Alibaba. com – David Wei had lead to 4 years big increases, he still chose to agree his resignation.

However, it shows that as the company is getting bigger, Jack Ma met difficulty to drive his own values ; principles to the whole organization sustainably, if just by personal influence. As a big company already, should be Alibaba directed and managed by one people, or managed based on effective systems are more important at this stage? The origin of the fraud was: the performance evaluation system in B2B team(Alibaba. com) relies on Sales KPI too much. If Ma wants to get company’s value ; principles back, review and re-design would be necessary.

As an individual, Ma can’t influence over 22,000 employees directly. When getting to mature stage of Alibaba, Ma’s leadership needs to be more focusing on build up the suitable systems to motivate employees in the right direction. This also reflects in another area, assessing ; selecting the right leaders and the systems to develop talents. In the past 4 years, Ma changed 3 people for CEO for Yahoo(China) from hiring externally. Furthermore, he is still the one who leads the business direction/strategy on his own.

In stead of challenging the followers to get them developing fast enough to lead the business, Jack Ma preferred to hire CEO out of Alibaba in the past few years. but still, what’s getting better is, we can see recently, he started to put his followers into bigger ; leading roles to lead the business directly as they are getting more mature. Jack Ma ; Alibaba Group is facing fierce competitions from the threat of new entrants-some big internet companies in China. Let’s talk a look whether Ma’s leadership will help Alibaba group achieve it’s “Big Taobao” strategy, and go forward in the future.

References:

1. Alibaba, China’s king of e-commerce, http://www.economist.com/node/17800299
2. Alibaba and the 2236 thieves, http://www.economist.com/blogs/newsbook/2011/02/online-fraud_scandal_china
3. www.alibaba.com
4. http://baike.baidu.com/view/2296.htm