Alibaba founder Jack Ma — RBC: "I have not received salary for 12 years"

In the first interview with the Russian press, Alibaba founder told RBC why it is necessary to invest in Russia right now, why all Alibaba executives are younger than 45, and what is the difference between a mistake and a strategic choice.
23.06.2015
RBC
Origin source
"We need winter hats, and you know how to do them perfectly"

- In 2015, AliExpress registered legal entity in Russia, he has signed several partnership agreements and you SPIEF first arrived in our country. It is obvious that coming active expansion in Russia. Why now, when the Russian economy is in crisis?

- When other people think that everything is going well, I always say: you have to wait a little longer. And when all the panic, I think: you have to move forward. In any economy there are ups and downs. When the market falls, this is the best time to prepare. No matter what challenges we will face in the current economic situation - in the future everything will be fine. I never make plans for the year ahead, I think about the next five to ten years.

- Do you think that now cheaper to go to the Russian market?

- Invest in Russia right now is really cheaper. When everyone thought that the Internet was not developed, I was sure that this is just a great opportunity. When everyone was talking about how the internet works onpersonally, I say, the technology is still in need of improvement. In Russia, people talk so much about the problems. I believe that now is the time to think about the future. And as an entrepreneur, I always look to the future with optimism.

It is impossible to come to any market today and win it tomorrow. To build a good business takes time. The Russian economy is not in good shape right now - then it's time to enter the market. After five years in the Russian economy starts to recover.

The expansion right now - it's not an irrational decision. We studied the Russian market for several years and have realized that consumers liked the product. Infrastructure for e-commerce in Russia is far from perfect, as in China: online commerce and the Internet still only developing, the potential is huge. In addition, we understand that internally ready for expansion.

- What do you think, why AliExpress so well things are going in Russia? Whether buyers are similar mentality from Russia and China?

- Of course, there are similarities. Why online trade in China has grown so quickly? Because the infrastructure for tradeand the financial system were not in the best condition, but with the advent of the Internet, they are more and more refined. Two or three years ago, logistics was so bad, that if a girl from Russia ordered online thing from China on AliExpress, it delivered over 60-70 days. Now the delivery takes 20-25 days. And what if we do improve logistics? We see this as an opportunity for our business in Russia.

- Many analysts say AliExpress successful in Russia only because of the low prices.

- I do not know what prices in Russia. Probably low: no one would buy at high. But I hope that at the height of quality. I think that people are buying on AliExpress, in spite of the long delivery time, because of the good service and quality products. Now we need to improve payment and delivery, and things will get even better.

Generally, our goal - not to sell Chinese goods in Russia. I dream of a service through which small businesses from Russia will sell around the world. The Russian economy is bad, so why not sell in China? We have 2.5 million middle-class people. I think in 15 years there will be 500 million. AndThey have good products on request.

- Does China have a need for Russian goods? What specifically?

- I, too, it's interesting. First, Chinese consumers may be interested in food from Russia. Secondly, can demand clothing. I say clothes in China better and cheaper. Ok, but what about the winter clothes? We need winter hats, you are able to do very well. We think we need to bring in as many Russian tourists, and you can see what they are buying, and go to any stores. With these data it will be possible to understand that the Chinese will buy online.

- What are your plans in terms of sales in Russia or on the number connected to your local area businesses?

- In China, about 10 million are traded on our platform. If we have at least 1 million sellers from Russia, it's good.

- The SPIEF have held a meeting with representatives of "Mail of Russia". What forms of cooperation are you considering?

- I actually met with the general director of "Mail of Russia" [Dmitry Strashnova]. I am verys appreciate they have done in recent years to work - reducing the delivery time of China from 60 to 20 days. I asked if we can work together on the further development of logistics. I think in the next few months we will be able to move to a seven-day period, and significantly improve the existing services and infrastructure. We also think about improving the payment system. We have AliPay - possibly, Russia Pay will be in the future. If we start to invest - to work with the "Mail of Russia" and financial institutions, in 10 years Russia will be very advanced online trading and infrastructure for it.

- Are you interested in cooperation with the "Mail of Russia" as an investor?

- Doing business - not to buy the company. If our goal was to make money, perhaps we would be working under such a model. But the business - it's like a wedding. "OK, you do, let's get married" - that just does not work. Before you get married, you must first encounter for some time, get to know each other, so we need a good experience "courtship."

We need a lotMeet with representatives of the banking and logistics sectors in Russia. It is necessary that as many young people as possible in Russia to understand that the Internet and e-commerce can change their way of life. And on this we will work [on ad deal possible in 2016, passed TASS].

- A few days ago the sales in Russia began another giant of online trading from China - JD.com. How are you going to resist the rival in the struggle for the Russian market?

- We are different by business model: Alibaba is not engaged in e-commerce in its purest form. We help others to buy and sell. Our goal - that each company could operate as JD.com, that is, to sell things online. In addition, the Russian market should be more participants, so that the potential of online trading in Russia huge. Finally, you need to be financially stable company to successfully develop and invest in their development in new markets. Otherwise it will look like this: I want to go to Brazil, but where do we get the cache?

Jack Ma

Ma Yun (Jack Ma - a pseudonym) was born in a poor seven in 1964e musicians. He grew up in the Chinese megacities Hangzhou 180 km from Shanghai. Childhood Ma fell to the Cultural Revolution. While many schools were closed, and Ma had to learn English on their own. Western tourists visiting Hangzhou, and Ma led free tours for foreigners in exchange for English lessons. One of the tourists, and came up with his name, Jack.

Ma twice failed the exams in the Pedagogical Institute of Hangzhou, but eventually arrived and received a diploma in 1988. Master Jack Ma worked for six years, received a monthly salary of about $ 12-15. In 1995, he first visited the United States as a trade delegation interpreter. A friend showed Ma, how the Internet works. Jack typed in the search box Yahoo! «beer", but the results from China are not found and decided to make the Chinese Internet company. Back in China, he did online catalog "Chinese Yellow Pages", but the business did not take off.

In 1998-1999, the future billionaire has led a division of the Ministry of Foreign Trade and Economic Cooperation of China. In 1999, he left the bureaucracy and convinced St.oih friends create Alibaba Group - a trading platform for small and medium-sized businesses. Things were going up the hill: in the same year, Alibaba raised $ 5 million from Goldman Sachs and $ 20 million from SoftBank.

In its 50 years, Jack Ma - one of the richest people in China. In the global list of billionaires, according to Forbes he assigned to the 33rd line:. Ma magazine estimated at $ 24.5 billion only to the IPO Ma earned $ 867 million (all Alibaba valued at $ 167.8 billion). In 2013, Jack Ma resigned as president of the group and appointed a successor Jonathan Lu, but he remained chairman of the board of directors. In the spring of 2014, he also heads the charity.

"It is said that Alibaba everywhere, but we have a focus"

- Alibaba as "financial stability", which can not only enter new markets, but also to invest in other companies. For example, one of the solid investments - in messenger Snapchat. How do you choose what to invest in the projects? You are important financial figures or the identity of the founders?

- We're not looking for the founders and team. We believe that it is important that the team believed in what she was doing. For example, many years ago a whalebank market, we have started to compete with eBay. We as a team loved our market and believe that we can improve it in the long term 10-20 years. Moreover, we had nowhere to retreat: Unlike eBay, we had only the Chinese market - and we won.

When we find partners that are investing, we are helping, but does not prevent them succeed. This is different from our model of globalization American. Americans want to be the largest shareholders. We are looking for partners are investing and we believe that they should be the number one in the company, and we do not.

- Recently, Alibaba launched its video service similar to Netflix. Do you already have a private payment system AliPay and logistics Cainiao. What areas do you want to reach and why?

- People do not understand where we are going, because we believe the company. We do not consider ourselves a company and organization that will change the world trade in the future. Our primary goal - to simplify the work of small businesses. We are building a platform that will give them what we expect they need - financial instruments, logistical services, data collection, Cross-border trade opportunities. So we see ourselves in the next 10 years.

And in the next 10 years, to which we must prepare now, we'll focus on the two H: health ( «Health») and happiness ( «Happiness"). In the first case it means that we will invest in public health. And in the case with the happiness it comes to movies, theaters and other entertainment and communication facilities for young people. People are lost, said that Alibaba everywhere, but we have a focus - on the small business and two H.

- At Alibaba there are investors from Russia, in particular, Alisher Usmanov and Yuri Milner. Have you met them?

- No, we have not seen. But I'm going to do it in the framework of his current visit to Russia [meeting at SPIEF has not taken place]. I am happy to meet with our local friends. But not because we want more money - we should be grateful to all those who believed in us.

- It's only 2% of its revenue from online commerce Alibaba received from abroad. You have stated that you want to increase this figure to 40%. What percentage of this will take Russia?

- Yes, only 2% iss abroad: it is bad and good. In the next five years we will be the first company in the world, in which the total volume of sales on the markets will reach $ 1 trillion, and at least 20% of this amount will come not from China.

In the current 2% of the Russian market it is already in the top three markets for the group. In this case there is difficulty with the delivery, and many Russians know little about Alibaba and do not represent that they have the opportunity not only to buy but also to sell things online. We are still young, we can wait another five to ten years. So far only one company of Russia participates in the experiment to sell items through Alibaba in the global market [belonging to the Alibaba online platform Tmall Global joined the first Russian dealer - a network of supermarkets "ABC"].

- You said that in five years, the volume of sales through the Alibaba close to $ 1 trillion. How do you plan to reach this figure?

- In China, the lives of 1.3 billion people. In 2014, our sales volume has already reached the level of Walmart [capitalization in November 2014 has already surpassed Walmart Alibaba: $ 251 billion versus $ 246 billion]. In general, if our growth rate in China only five litersie we will be selling, like the four Walmart.

See, now we have about 800 million users in China, sales amounted to $ 0.5 trillion, the potential - $ 2 trillion, and without taking into account the global market. But the demand in developing countries and the world at large is huge. The population of the United States - more than 300 million people, and if we attract 100 million customers there, it will be good.

So with the current growth rate [Alibaba's revenue in the last quarter of 2014 increased by 40% compared to the same period in 2013], we need even less than five years, to achieve a volume of $ 1 trillion in the world. But, because we need a lot more thing to do, we have set a bar. When we type a base of 2 billion users in China, India, Indonesia, Russia and other countries, we will be very attractive for a small business as a trading platform. That we have a crazy dream, to which we aspire.

Alibaba Group

Alibaba Group controls about 80% of e-commerce market in China. Holding combines several lines of business: Taobao, AliExpress, Tmall (platform for online trading), AliPay (payment system), China Smart Logistic Network (logistics platform), Alibaba Cloud Computing (cloud service).

Services Alibaba successfully develop and outside China. In particular, the online store of AliExpress is in the top 10 most visited sites in Russia in May 2015 of its monthly audience reached 22.6 million people, according to TNS.

At an early stage of development invested Goldman Sachs ($ 5 million) in the Alibaba Group, SoftBank ($ 20 million). In 2005, Yahoo! Short-, investing in the Alibaba $ 1 billion, has received 40% of the group. In 2012, Alibaba has bought a 20 percent stake back. Among the investors Alibaba also fund DST Global Yuri Milner and Alisher Usmanov, funds Glade Brook Capital Partners, Primavera Capital Group, CICC, Boyu Capital and others: all the company raised seven rounds totaling $ 4.8 billion.

September 19, 2014 held Alibaba IPO. It was the largest public offering in the history of the New York Stock Exchange: the group was estimated at $ 167.8 billion According to the financial statements, in the last quarter of 2014 in Alibaba was 334 million active customers.. Proceeds of the holding for the last fiscal year (ended March 31, 2015) was $ 76.2 billion, which is 45% higher than a year earlier, and net profit - $ 24.3 million (4% growth).

According to Crunchbase, Alibaba completely bought eight toMpano, including advertising platform AdChina and AutoNavi map service, and has invested in dozens of projects, such as $ 200 million invested in Snapchat messenger.

"The money that I have, I do not belong"

- And what is your crazy dream in your personal life?

- In my personal life? If I had one!

I would like to have more free time. This month has been crazy: I was in New York, Chicago, in the cities of Japan, Brazil, Russia. Only one month - and five movements.

- So you want to travel less?

- Oh yeah! When I was young I told my classmates that one day I will have breakfast in London, lunch in Paris and dine in Buenos Aires. I studied English and I thought that such a life would be perfect for me. Now I know how awful it is. The pilot of my plane - the busiest in the world, we travel every day. This is not because we need more money. We have a mission. I hope to be able to retire early. Recently, we have reformed: moved all the top managers, who racewere in the 1960s, on the other items, and left in managerial positions only those who were born after 1970. Our team - three thousand young people who were born in the 1990s.. In the future, I look forward to them.

- What is the worst possible solution in the business you have ever received?

- We've had a lot of small mistakes in almost everything - finance, recruitment, relations with the government's operations. And we continue to make mistakes. What is our biggest mistake? Really serious, that could kill our business was not: see, we are still alive.

We quickly learn from their mistakes and are changing. Every mistake - this acquisition. For example, six years ago we were deciding what to invest in the first place - in the cloud and mobile technologies. We decided to start with the "cloud". mobile boom began two years later, and we had to catch up. We can call the decision a mistake, but we can - a strategic choice that we made at that time. But we woke up and quickly changed strategy. Now we - the world's largest company in the mobility segmentOnline Trading th [at iResearch data, at the end of December 2014 Alibaba share in the mobile commerce market reached 86%. According to the company report, the number of monthly active users of all groups of applications was 265 million, up 95% more than the year before].

- You mentioned mistakes in relations with the authorities. What did you have difficulty with the Chinese government and how you overcame them and?

- Well, that 15 years ago, when we began to do business, no one knew anything about the Internet, including China, Russia, the United States Government We immediately realized that it is not necessary to wait until the authorities will understand how everything works, and it is necessary to talk to the government and to explain what the Internet use and why we need to work together on its development. I talked with the leaders of different countries. I say, Jack, you're all talk, perhaps, you have excellent communication. But I do not do business with the states. I always say: you can love power, but it is not necessary to marry.

I try to make the government understand how the Internet works, and is ready to help the government to solve the problem for free. I explain that we have toWe give new jobs. Of course, when you grow to enormous size, you're faced with certain problems that come from the authorities. But we need to treat this as a part of nature as to the fact that sometimes you bite down on your tongue. The Russian government may worry that we are entering the market. We need to talk to them, listen to what they are worried, and tell you what worries us. Communication in a relationship with the government is very important.

- Many businesses, richer, begin to engage in charity. You are not an exception. What you have achieved in this direction?

- When I was 30 years old, I said to myself that I would do something useful when I get rich. I - a teacher by training, but he taught only six years. And I'm sorry I do not do this anymore. I decided that 50 years, I have to learn to make money, and after 50 - spend it wisely. The money I have, I do not belong: the money - my responsibility. When you have $ 1 million, you're rich and can spend the money. When the $ 10 million you have, you begin to worry - about the dollar exchange rate, about whereto them to invest. When you have $ 1 billion, it is not your property: it is - means that you trusted people so you can use them better than themselves.

So I have a fund to which I originally sent Alibaba shares 2% [on the establishment of the charity fund Jack Ma and Alibaba founder Joe Tsai announced in April 2014, when you run into it invested $ 2.4 billion]. At the moment I put it around $ 4 billion, but this is only the beginning. Our foundation focuses on supporting the environment, education, health. Besides, I want to make a contribution to the development of talented young people who want to engage in charity. For such a work is not enough one desire - need skills and abilities. A person can come with the words "I love helping people," and then squander the money wasted and breed confusion in business. People need to be taught.

I do not know how to spend the money well - just learning. This is my second career, and it was much more difficult than to make money.

- Businessmen from Russia, like expensive "toys" - private jets, yachts and so forthalley. What an expensive thing you have bought yourself the first thing that got rich?

- I have not made that first purchase. Yes, I have a plane, but I need it to work. I'm not interested in buying all the floor of their things - cars, yachts ... Because of personal aircraft I have more work: before I could say that I do not have time and opportunity to get somewhere. Now I travel all the time, you understand. What kind of a status thing I bought? I do not even know.

- Maybe, iPhone?

- IPhone I bought a wife. I will share with you a secret, which had not previously said: I have not received a salary for almost 12 years. So I do not know how to spend money. When I need to buy something, I often give money to someone and ask to buy. In general, see, I do not even have watches and rings. I do not wear watches for about 30 years: now just do not understand why they are needed, because I can see the time on your smartphone.

What did Jack Ma at the St. Petersburg Economic Forum 2015

Jack Ma first came to Russia on an official visit in the framework of the economic forum, which was held June 18-20 in St. Petersburg.Prior to this, Ma visited Russia as a tourist - even before the creation of Alibaba.

"The purpose of the visit was to SPIEF is to provide an understanding of our business and tell government representatives and entrepreneurs about the opportunities offered by Alibaba. So we met with various representatives of public organizations in the framework of this visit ", - he told RBC representative of Alibaba.

On June 19 forum Ma gave a presentation on the big data business, "From Information Technology to Information technology: a new era in trade and commerce» (From IT to DT: A new era for commerce and trade). Alibaba founder participated in the meeting of Russian President Vladimir Putin with the businessmen from Russia and from abroad. Specific decisions at this meeting, according to "Vedomosti", did not take a business again I asked the president to impose sanctions and other problems.

The SPIEF Jack Ma has met with Director General of "Mail of Russia" Dmitry Strashnova. He also talked to the Minister of Communications and Mass Media Nikolai Nikiforov and Minister of Economic Development Alexei Ulyukaev toldRBC a source familiar with the plans of THE PARTIES. According to the "Vesti.ru ', Ma spoke with the CEO" Yandex "Arkady Volozh companies about possible cooperation. According Volozh, Ma expressed interest in the ongoing search engine research and said it is looking for partners in the areas of logistics and electronic payments.