JACK MA – ALIBABA
2017 INVESTOR CONFERENCE
Enrique Aboitiz Mendieta
This a summary of the highlights of the Jack Ma talk during his yearly investor conference. This company is 18 years old and it dreams of 2 billion customers all over the world and a trillion dollars of revenue by its 20th anniversary. Of that number of customers, 1.2 billion will be from outside China.
It dreams of being an economy and not a business – 5th in the world right behind Japan.
This does not happen by accident. Chances favor the prepared, and this fellow and his team sure milked chance. They have seen the underlying river in China that was not seen by the world, the press, nor maybe the government.
He has data and he knows that data has to be transformed to information and wisdom for him to win.
Give attention to his thought process and how he expresses himself. His english is not the best in the world, but he is particularly clear in his message and his vision – crystal clarity of a vision that he is totally immersed in and which makes so much sense.
He is not from the land of plenty and of opportunity. He is from China, where so many said innovation was not possible because it was not a liberal democracy, because the government did not support the internet, and all kids of other fallacies.
I tell you, whenever truths become calciﬁed in the media the red light should go on in our minds — they are surely wrong. Question everything you hear as it is loaded with conﬁrmation bias, with ﬁction, with fallacy and with fallacies.
You can read this summary but you would do yourself a large justice by watching Jack Ma below twice, and then read my summary.
WE NEED TO LISTEN TO EVERYONE.
WE NEED TO QUESTION EVERYONE.
WE NEED TO QUESTION EVERYTHING WE DO, FROM EVERY REPORT WE READ OR WRITE, TO ALL NEWS WE HEAR, TO ALL DISCUSSIONS WE ARE ENGAGED IN. BECAUSE THEY ARE SURELY, SURELY WRONG OR INCOMPLETE.
THE ROLE OF A CHAIRMAN
- Make sure his company is a vision-mission driven company. Don’t worry about the next quarter. Don’t worry about the short-term stock price.
- Make sure that his company has a healthy culture and great people
- Build a healthy ecosystem for his company to survive.
EVERY YEAR, the chairman will need to review what they will do ten years later. They need to have three-year, five-year, and 10-year plans.
Jack Ma has a 102-year vision for his company – to be the 21st century, globalized company.
The FIRST TECHNOLOGY REVOLUTION had the business model called the factory. The SECOND TECHNOLOGY REVOLUTION had the business model called the company.
THE NEXT TECHNOLOGY REVOLUTION will depend on what will be the data time, the internet time, what business model will be the best for this century? Jack thinks it’s something called platformed business.
It’s not about catching opportunity – when even a pig will ﬂy. Rather, it’s about what kind of value you create for the future.
THERE ARE THREE PROBLEMS TO SOLVE
What problems you solve for the world also matters – the more you solve, the bigger a company you will be.
Think what the problems will be, then solve them. The way you compete is determined by how you judge for the future.
Businesses today were decided ten years ago – they were great then and now. What’s decided now will be the decisions for tomorrow. TOMORROW’S PROBLEMS ARE TO BE SOLVED TODAY.
If there are nine rabbits on the ground, and if you want to catch a rabbit, do not change rabbits — focus on one rabbit and change yourself to catch that rabbit.
Trade protection, anti-trade, and anti-globalization will be big problems for the future.
Globalization is a great thing.
- How to make globalization more inclusive so everyone has a chance? More jobs can be created by helping small businesses sell their products everywhere. Help 666 million small businesses sell and buy cross border and not just 60,000 big businesses.
- How to make global business more sustainable?
- How to make people happier and healthier?
The Alibaba Group envisions to be a $1 trillion-GMV company by 2019 – it’s 20th anniversary. Today, 500 million people are using their services.
Today, GMV-wise, Alibaba ranks as the 22nd “economy” in the world, just behind Argentina. Tomorrow, it aims to be the 5th largest “economy” in the world. After the U.S, China, Europe, and Japan, there’s Alibaba. Through this “economy,” Alibaba helps facilitate:
JACK’S VISION IN TRAVEL: In a couple of years or ﬁve years, you will be able to travel without a passport — just a mobile phone or facial recognition.
VISION IN LOGISTICS: Within China, anything you buy will get to you within 24 hours. Buy anything anywhere in the world, and it will get to you in 72 hours.
A couple of years ago, it took a Russian girl 2.5 months to receive a product. Nine days from China to Russia was already a skyrocket improvement.
VISION IN COMMERCE: EWTP, or electronic world trade platform , where small businesses can buy and sell across the board. Not EWTO – the ORGANIZATION, which is complicated.
A big business can clear customs in 24 hours — a small one in six weeks
Work with government to make it more inclusive by helping the small guys’ ability to move quickly.
VISION IN PAYMENT: TechFin – enable everyone gets ﬁnancing. Everyone is equal. Not only for those who don’t even need the money.
JACK TRAVELED 876 HOURS in 2016, to 40 countries, talking to leaders. Malaysia is the ﬁrst country to start EWTP; it will be the “testing country.”
NEXT 5 YEARS – China will import $8 trillion of goods and services.
This means 16 Walmarts Global. China is moving from exporter nation to an importer nation.
Internal China market Now, the country has 300 million middle class with low spending capability. In 5 years, China will have 500 m middle class – twice the U.S.’s population
The country is shifting to domestic consumption from being export and investment-driven.
E-commerce will thus play a huge role.
Alibaba thinks that in consumption upgrading, importing is the key.
CHINA IS FACING FIVE NEW’S in the next 10 years:
1. New Retail – Move from selling to services
2. New Manufacturing – IOT, or Internet of Things, will solve the manufacturing problem of China
3. New Financing – TechFin, not ﬁntech, to serve the small.
4. New Technology
5. New Energy
Professors talk about AI. Alibaba does not. Just uses it. AI is discussed by companies without data. They have been using it to have machines learn how to prevent thieves from stealing in their transactions area. They hired 200 policemen to teach computers to catch and prevent thieves – AI will be smarter than thieves. Bad guys do bad things with logic – in logic, AI will beat you.
IOT – last 20 years machines drink electricity. In the next 20 year,s machines will drink data. In the last 20 years we made people like machines. In the next 20 years, we will make machines like people.
People say Jack Ma is a salesman — no, he said he’s an evangelist. Evangelists believe in the future. Engineers believe in technology. Jack believes technology is for the future. The more things we do, the more we understand. We want to be the ones to solve problems.
They hold four management meetings a year – two in Chinese and two in English – they learn the languages. Alibaba was born in China but they grow for the world. They are not Amazon – they are an economy. We have Google business and Amazon business — they are an economy. The most important thing in a virtual economy is data – data is their water. The other important thing is network. Then there’s also environment – the value they create for Alibaba users.
THEY GUARANTEE THAT THEIR COUNTRY IS VISION-DRIVEN.
THEY HAVE TO SOLVE PROBLEMS FOR THE WORLD
THEY HAVE TO BE HAPPY AND HEALTHY.