‘Alibaba: The House that Jack Ma Built’, by Duncan Clark
In 1999, Duncan Clark gained bragging rights that any long-time China hand would relish today: the former Morgan Stanley investment banker turned business consultant was given the chance to visit the lakeside apartment of Jack Ma.
The flat was the nucleus of a new company that Ma had named Alibaba a few months before, saying he wanted to sell things online in China. To some this seemed a laughable prospect in a country that then had minuscule internet penetration.
But if Alibaba was to fail, it would not be for want of trying: you could “count the number of cofounders by the toothbrushes jammed into mugs on a shelf”, Clark writes of the company’s early years. And ultimately, the days and nights spent coding, calling and hustling would be rewarded in 2014 with a $25bn initial public offering, the biggest of all time.
Clark has long been one of the most visible westerners in China’s technology scene. In Alibaba: The House that Jack Ma Built, he draws on a considerable trove of personal reminiscences in addition to dozens of interviews to write what could be the definitive history not just of Alibaba but other titans of the Chinese internet such as Tencent, Sohu, Sina and Baidu — all household names in China but little known in the west.
The author tends to accentuate the positive about Alibaba, referring to his subject throughout as “Jack” and serving up a succession of anecdotes that illustrate his business genius. Many chapters begin with a stirring quote from Ma such as: “The Internet [is like] beer . . . the good stuff is at the bottom. Without the bubbles, the beer is flat and nobody would want to drink it.”
But the narrative is at its best when it seeks to place Alibaba in its local context. In Taobao, the eBay-like online marketplace launched by Ma in 2003, Clark sees a virtual reflection of the bustling Yiwu wholesale market just down the road in Alibaba’s home city of Hangzhou — and, beyond that, of Ma’s native Zhejiang province as a whole, which the author describes as “China’s crucible of entrepreneurship”. Blazing with pop-up boxes and floating banner ads, Taobao is about as far away from the clean lines and uncluttered negative spaces of Google as could be imagined.
While the bustling entrepreneurial energy of China’s bricks-and-mortar economy has been reproduced in Taobao and latterly its sister website Tmall, so have the problems — counterfeit goods and some accusations of counterfeit numbers following Alibaba wherever it goes.
Clark gives this side of the story too, offering the most thorough treatment yet of some of the more difficult episodes in Alibaba’s history. In 2011 an argument erupted over the transfer of the Alipay online payments business to a company controlled by Ma, which raised fears among minority shareholders Yahoo and SoftBank that the value of their stakes in Alibaba would be eroded.
The investors accused Ma of asset-stripping, while Ma argued that there were solid regulatory reasons for his apparent violation of corporate governance norms. Clark speaks to all the parties concerned, setting out the claims and counterclaims in accessible fashion — and Ma does not come off looking particularly good.
The last chapter, “Icon or Icarus?”, looks at the future of Alibaba, which has not had a particularly smooth ride from investors since it went public in 2014. After a vertiginous rise in the months following its IPO, Alibaba’s shares sank by 50 per cent before the summer of 2015 was out.
In late August, they fell below the $68 IPO price for the first time, and have hovered a little above negative territory ever since.
The book is a must-read for anyone hoping to navigate China’s new economy. Despite being behind the “Great firewall”, China’s internet — thanks largely to Ma — will become a part of everyone’s life sooner rather than later.
Alibaba: The House that Jack Ma Built, by Duncan Clark, Ecco, RRP£18.99/RRP$27.99, 304 pages
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