After Alibaba’s IPO, the well-known American CBS talk show, 60 Minutes, broadcast an interview with Jack Ma on Sunday, 28 September 2014. The talk show has been following Alibaba and Jack Ma since last year. 60 Minutes’ journalist Lara Logan visited Alibaba headquarters in Hangzhou, Zhejiang, to interview Mr. Ma on a range of topics from his company’s success and his unique business philosophy, including his attitude towards shareholders and how to deal with the government.
60 Minutes: In the USA shareholders are typically put first when it comes to business practice, but you seem to have a different view.
Jack Ma: Yes, I don’t necessarily think this is the correct approach. Shareholders are very important and I respect them. But shareholders come third: if your consumers are good and your employees are good then shareholders’ interests will be taken care of.
60 Minutes: This peculiarity didn’t stop Wall Street from sinking $25 billion on Alibaba, now listed on the NYSE as "BABA". The Internet giant will be linking sellers and buyers together. Through Taobao, users can interact and bargain with each other in a new way and on such a scale that American e-commerce and online shopping has not seen before.
60 Minutes: If I want to buy a house, I can hire an architect, buy a doorknob, decorate the entire house—from start to finish the whole project can be done on Alibaba, is that right?
Ma: Yes, as long as it is legal you can buy anything.
60 Minutes: Five or six years ago Alibaba wasn’t returning a profit. The company made $1 in 2002. How about now?
Ma: We’re at the level of $1 billion U.S.
60 Minutes: Alibaba is now the world's largest e-commerce company, outpacing Amazon and eBay. In China, Alibaba has created a new group: Internet consumers. Before Alibaba, some of these people had no way to come into contact with modern businesses.
60 Minutes: You have more than 500 million registered users.
Ma: Almost. But that’s still only 40% of the Chinese population. We will have more. 100 million people visit our site every day. The future is just starting.
60 Minutes: When you founded Alibaba in 1999, it was a completely different world than it is today, in terms of the Internet. Yahoo rather than Google was the most popular search engine. There were no iPods, iPhones or iPads, and out of every ten households in the United States only four had Internet access. The World Wide Web was hardly present in China. China had no retail stores except in large cities and most of China had no credit cards or parcel shipping. The only way to shop was through face-to-face transactions.
Ma: The year I started doing e-commerce, nobody believed China would be a successful environment for it. Chinese believe in relationships between people, in having face-to-face exchanges and in traditional forms of networking and communication. That explains why there was no credit system in China.
60 Minutes: Jack Ma therefore had to overcome centuries of tradition—to show Chinese buyers and sellers that Alibaba could be entrusted with real money for their virtual business. To this end Ma established a secure payment transaction system.
Ma: Every day we complete more than 30 million transactions. It’s impossible to see every person you are dealing with, moreover to communicate with every person delivering people’s goods. I want to show people that trust exists.
60 Minutes: It's all based on trust and relationships.
Ma: Yes, everything comes down to trust and relationships.
60 Minutes: Today in China, whether poor or rich as long as you have access to the Internet there are things you can sell and you can reach hundreds of millions of consumers through Ma's website. Chinese people who have never met before now have a way of doing business with each other, becoming part of the networked world. Thanks to this revolutionary idea Jack Ma has become the hero of millions of Chinese. Ma has no background in computer science or engineering, and said he first discovered the Internet in 1995.
Ma: Before then, I had never touched a keyboard nor used a computer. I had to ask what the Internet was. Someone said, "Jack, you can search for anything you want on the Internet." I said, "How do you do that? What does ‘search’ mean?” He said, "Just type it in." Computers were expensive and I didn’t want to run up his bill. He said, "Just do it." The first word I typed was, ‘Beer’. Slowly, I got hits for American beer, Japanese beer and German beer, but no Chinese beer. So I wondered: I searched in China, but got no Chinese data. When I went back to Hangzhou, although I was hesitant and had no money I always thought, "I want to start a business on the Internet."
60 Minutes: Today, Alibaba is valued up to $231 billion. Based in Hangzhou, the company ably rivals any of the Silicon Valley giants. Alibaba has also been recognised by the Chinese government.
60 Minutes: You once said that when you can reach hundreds of small businesses with your website, the government will recognise you. How do they view you now?
Ma: They recognise and hope we can create social stability. I told the government that my task is to help more people find work.
60 Minutes: Many people think that to be successful in China you have a good network or come from a wealthy background, but you had neither of these.
Ma: Right. I told my team that you can fall in love with the government, but don’t marry them. Therefore, we’ve maintained good relations. If it comes down to national security, we have developed a rigorous process to cooperate with the government. It’s no different between the cooperation between the U.S. government and Facebook or Google.
60 Minutes: Opening to the American market heralds Ma’s global Alibaba strategy, to connect sellers and buyers in the United States and China.
60 Minutes: Your strategy in the U.S. is not to take on U.S. markets, right? Google, Amazon and eBay don’t need to be concerned, do they?
Ma: We are here to help out. For example, to help small American businesses do business in China—which is exactly what we do best. We already have 100 million people shopping on our platform every day. How many will it be in three years? I don’t know, 300 million?