Why global investors ask: Where’s Jack Ma?

Jennifer Pak Apr 24, 2023
Heard on:
Jack Ma at a startup fair in Paris in 2019. Since China's crackdown on tech moguls in 2020, Ma has largely kept a low profile. Phillipe Lopez/AFP via Getty Images

Why global investors ask: Where’s Jack Ma?

Jennifer Pak Apr 24, 2023
Heard on:
Jack Ma at a startup fair in Paris in 2019. Since China's crackdown on tech moguls in 2020, Ma has largely kept a low profile. Phillipe Lopez/AFP via Getty Images

Jack Ma, the founder of Chinese tech giant Alibaba, has just accepted a position as an honorary professor of entrepreneurship at the University of Hong Kong. Ma has been out of the public eye for more than two years and only resurfaced in mainland China last month.

“Ma was a high-profile individual who became associated with the rise of entrepreneurship and big tech,” said Duncan Clark, an advisor to Alibaba in the company’s early days and author of the book, “Alibaba: The House That Jack Ma Built.

But Ma was also the first to fall foul of China’s government when it became nervous of the power of tech companies and launched a crackdown on them in 2020.

The charisma factor

People who know Ma have said he is highly charismatic.

In a 2008 profile of Ma, Chinese government broadcaster CCTV asked the tech entrepreneur to comment on his appearance — skinny, sunken cheeks and a strong jawline.

“I am definitely not handsome, but I would not say I’m ugly,” Ma said with a smile. “I’m just a bit odd-looking.”

Ma said he didn’t make his fortune because of his looks or family connections. He also admitted that he had a hot temper, fought a lot in school and barely scraped into college on his third try.

“If Jack Ma can be successful, then 80% of the people can be successful as well,” Ma said in a 2009 speech at the Asia Society. “I don’t have any financial background. I don’t have a rich father. And I don’t  have any relationship with any government officials.”

Early days as an English teacher and translator

In 1972, U.S. President Richard Nixon made a historic visit to China, including to Ma’s childhood hometown of Hangzhou. After that, foreign tourists started arriving in the city.

“I went to the Hangzhou hotel, now called Hangzhou Shangri-La Hotel, because that was the hotel [that could] receive the foreign visitors,” he said at the World Economic Forum 2015 meeting in Davos, Switzerland. “So, every morning for nine years, I showed [the tourists] around as a free guide, and they taught me English.”

Ma later became an English teacher himself.

When China’s economy reformed and opened further under Chinese leader Deng Xiaoping, Ma started working as a translator.

It was on a business trip to Seattle in 1995 that Ma encountered something called “the Internet.”

“I searched the first word, ‘beer,’” Ma said at the 2015 Davos meeting. The audience broke into laughter. “I don’t know why because easy to spell maybe and I see beers from Germany, beers from the USA, beers from Japan, but there is no beer from China.”

Then he typed the word “China” in the search engine. “Nothing,” Ma said.

The Alibaba era

In 1999, Ma created Alibaba.com along with 17 partners. The site helps connect small Chinese manufacturers to overseas businesses.

Brian Wong and Jack Ma sit together on a stage.
Jack Ma, right, seen in 2018 at Alibaba’s Hangzhou headquarters alongside former exec Brian Wong. (Courtesy Wong)

Brian Wong from Palo Alto, California, was an Alibaba executive for almost two decades. He recalls the early days.

“We were at an event. We were explaining the homepage and all the things you put on that. Then, somebody raised their hand. They say, ‘Well, what do you put on the back of the page?’” Wong said. “The guy literally thinks it’s a printed page.”

Wong said the client base they had were small and medium-sized business owners. “Our salespeople were as much the educators as they were salespeople,” he said.

He added that Alibaba was unique in finding solutions for emerging markets.

When the firm launched its business-to-consumer site, Taobao, in 2003, it was not an instant hit.

“The fundamental challenge that Alibaba and all the internet companies faced early on was a lack of trust amongst consumers. Firstly, in payment,” Clark said adding that China was mostly a cash-based society then and credit cards were not common. “Why pay for a good that hasn’t arrived yet? You might get ripped off. It [was] a very deep-seated fear in China.”

The advent of Alipay

Alibaba’s solution was to set up an escrow payment system in 2004 called Alipay. Taobao consumers pay into an escrow account. The money is held until the goods are received. Once consumers indicate they are satisfied, then Alipay releases the funds to sellers.

Along the way, Taobao grew so big it virtually displaced U.S. giants such as eBay and Amazon in China.

“Jack Ma’s status in China [is] basically a Steve Jobs plus-plus kind of scenario,” Clark said.

Alipay is now an essential tool for daily living in China. It is one of two major mobile payment apps in the country that also offers small loans, insurance and investment products.

“[China has] no FICO scores. This is all created based on the back of this digital economy, which, frankly is quite amazing that you can build that from scratch in such a fast rate,” Wong said.

That enthusiasm may not have been shared by Chinese leaders.

The crackdown

Author Duncan Clark said that at the time of the government’s 2020 crackdown on tech moguls, Ma was singled out even though he was no longer chairman of Alibaba.

Some suggest that may have been because of a speech he gave in 2020 at a financial forum in Shanghai. In the speech, Ma slammed Chinese financial regulators as essentially antiquated.

Shortly after, Alibaba was forced to shelve the listing of its financial arm, the Ant Group, which oversees Alipay.

The aftermath

Ma has been keeping a low profile ever since. He reportedly spent most of the last two years abroad and has been spotted in Japan, Thailand, Singapore and Australia.

Meanwhile, Chinese regulators have investigated and fined the company and other tech firms like Tencent, Meituan and Didi under anti-monopoly or data security laws. Tech stocks plunged.

They rebounded slightly last month when Ma, returning from abroad, made a visit to his home city of Hangzhou.

“I think the idea that Jack Ma’s whereabouts are a barometer for the Chinese tech sector is a little bit overblown,” said Kendra Schaefer with Beijing-based consultancy group Trivium China.

But she understands why global investors and the media fixate on Ma’s movements. “There isn’t a lot of great publicly available information in English on what the Chinese government is doing, saying and thinking.”

Some point out that the government’s move against tech giants may not have been all about politics.

Experts say the tech sector is dynamic but also under-regulated — something Wong points out in his book, “The Tao of Alibaba.”

“It’s possible that there was this need to kind of slow things down,” he said.

When Ma reappeared last month, Alibaba announced it would split into six smaller units. Earlier this year, Ma ceded control over Ant Group. Despite these apparent concessions, there is no word yet on the shelved initial public offering of Ant.

Additional research by Charles Zhang.

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