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April 2015
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Lifestyle  
 
VOL.7 May 2015
A for Alibaba
From struggling teacher to the global face of China Inc., Alibaba founder Ma Yun gets his transformation recorded for the outside world
By Sudeshna Sarkar

 

Alibaba founder Jack Ma (third left)

On a fateful day in 2000, when a former English teacher from east China's Zhejiang Province strode into an auditorium in Berlin to deliver the keynote speech at a mega Internet conference, an unnerving sight greeted him. In the giant hall meant to seat 500, there were only three people waiting to listen to him.

"We thought we had gone to the wrong place," said Porter Erisman, who had accompanied the speaker. "But Ma Yun did not falter. He gave a very satisfying speech, talking for 45 minutes. When it was over, his confidence was unshaken. 'Don't worry,' he told me. 'The next time we come, the auditorium will be full.'"

It was a prophetic statement. Last year, Erisman returned to Berlin to screen his documentary on the teacher who had become one of the richest men in the world and the face of Chinese entrepreneurs going global. The auditorium was packed. "It showed people are now interested in knowing about Alibaba," Erisman said with quiet satisfaction.

From teaching to trillions

Ma Yun or Jack Ma's transformation from a nonentity who flunked his university entrance examination repeatedly to the emperor of e-commerce with Alibaba, the company he founded to help Chinese businesses go online, is a fascinating story for the world today.

And Erisman, the American MBA from the Kellogg School of Management who came to China first with his mother in 1986, is probably one of the most knowledgeable people to write about this metamorphosis. As vice president at Alibaba for eight years when the fledgling startup had just moved out of Ma's apartment into a small office, he had a "front-row view" of the phenomenon that changed China's e-commerce landscape.

"In 2001, I wrote a page (planning to write a book on Alibaba)," Erisman said from Tokyo, where he is based now. "But I thought the venture could go out of business and there was no point in writing a book."

But seven years later, Ma's business-to-business marketplace for Chinese companies, especially small and medium-sized enterprises, had successfully held its own against eBay. It had consolidated its position by launching the indigenous online shopping site Taobao, following it up with the third-party online payment platform Alipay. Other innovations would follow, like eTao, the online shopping search engine, and Tmall.com, the retail website. Last year, when Alibaba listed on the New York Stock Exchange, it was one of the most anticipated global initial public offerings, shooting past Facebook with its $228.5 billion market capitalization on first trade.

"When I signed up, Ma was always saying he would leave in four years since he was an English teacher with no business experience," Erisman reminisced. "He said he would hand it over to a professional manager. The moving thing was that over time Ma gained confidence and the team gained confidence that they were capable of running the business like the Western companies and would not need to give it to the big managers. I wanted to describe this transformation."

So Erisman decided to make a film. Crocodile in the Yangtze draws on nearly 200 hours of footage accumulated during his nine years at Alibaba. "I felt that telling the inside story, in the most candid way possible, about the ups and downs the team encountered would provide a great case study for entrepreneurs or others chasing a dream of their own," he says on his website.

When Erisman told Ma what he wanted to do, he says Ma told him, "You are probably the best person to do so."

So he left Alibaba to make his "docu-memoir" with Italian Giuseppe de Angelis and traveled to different parts of the world to tell the Alibaba story. At a screening last May, a publisher approached him, asking if he had ever thought of writing a book on Alibaba. He said he had, sent them his outline and was signed up by Palgrave Macmillan. The book, Alibaba's World, was formally launched this month and would be followed by a Chinese version.

Adding a new chapter

Erisman could be setting a new trend. There are books galore on successful Western businessmen and entrepreneurs like Warren Buffett, Bill Gates and Steve Jobs and there are books written by successful entrepreneurs themselves, from George Soros to Mark Zuckerberg. But there is virtually nothing on China's success stories.

"In China, there are a lot of books in Chinese but I can't think of any book in English for a global audience," Erisman conceded. "But then, global entrepreneurs in China are a new trend and Jack Ma happens to be the first example. He's the first to have traveled in Europe, talking openly to the Western media. He has become the face of China Inc. Edgar Snow wrote Red Star Over China [the 1937 classic account of the Communist Party of China (CPC) when it was still an unknown factor to the outside world, and revolutionary leader Mao Zedong]; my book is about a business revolutionary."

He has another parallel between Mao and Ma. In 2002, he explored China for two months, trying to follow the route taken by the CPC's Red Army while it was retreating from enemies between October 1934 and October 1935. The Long March, covering some of China's most arduous terrain, consolidated Mao's position as the leader of the Party and marked his rise to power.

"The Long March was a lesson that can be applied to Alibaba too," Erisman says. "During the first part of the march, the Red Army was following the advice of Soviet experts who advocated a forceful attack on the enemy. The strategy worked poorly and the army was getting annihilated. Then Mao became the leader and started using guerrilla tactics. That was the turning point that led to the success.

"In the start, Alibaba was also in retreat. It was following the advice of Western experts and was running out of business. The Amazon business model doesn't work in developing countries as it needs a very efficient commercial infrastructure, payment system and logistics. In developing countries, entrepreneurs have to build an ecosystem from scratch, which is what Ma did. He went on from being the founder of Alibaba to being its leader."

Alibaba in Africa

While touring with his documentary, Erisman received an email from a man he had never met.

"How can I watch your movie?" the man asked.

"I can come and show the film," Erisman offered.

The query was from Sim Shagaya, CEO of Konga.com, the "Alibaba" of Nigeria. Shagaya had founded the e-commerce company in Lagos in 2012 on the Amazon model. "After struggling to adapt the Amazon (U.S.) model to the local market, they were shifting gears and rolling out an Alibaba-style (Chinese) business model there," Erisman said. "It turns out the local conditions in China are much closer to the conditions in Nigeria and so there are a lot of learnings from China that are spreading to African e-commerce. You can imagine e-commerce taking root and building critical mass in entrepreneurial Nigeria, spreading through neighboring West African countries and really being adopted throughout the continent."

So after screening the film for Konga staffers and the startup community in Nigeria, Erisman returned to Nigeria for a month as a consultant. His conclusion: "The Alibaba experiment has proven to the world that e-commerce can thrive in emerging countries and lead to a boom."

 

 

 

 

 

 

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