How will Jack Ma Achieve a Greater Alibaba?
Is it possible for enterprises to stick to idealism while striving to survive? Is it possible to have goals loftier than profit-making while remaining profit-driven? Is it possible to reconcile short-term interests with long-term achievements? Jack Ma (Ma Yun), with his wisdom of Tai chi, resolved these conflicts and is now turning Alibaba into a great enterprise.
Jack Ma's Pledge
In the winter of 1998, before Jack Ma led 17 founders to South China to start the business, he gave a pledge on the Great Wall: "We will build a company that Chinese people are proud of."
In the classic martial arts novel Xiao Ao Jiang Hu (The Smiling Proud Wanderer), Feng Qingyang, in his antique martial garments, briskly ascends the stage, and after a brief speech, begins to display the arts of Tai chi quan (shadow boxing) in such a natural and smooth manner that it garners him much applause. This is also how Jack Ma presented himself earlier this year at the May 17 Taobao Conference in Guangzhou. It was not the first time Ma showed his Tai chi quan skills in public. Instinctively, we view Ma's performance as one of his many tricks at "making a show." What we, the public, fail to realize is that Ma has been practicing Yang-style Tai chi quan for a dozen years.
Despite the public's dismissive attitude, Jack Ma implements the wisdom of Tai chi (literally meaning "The Great Ultimate") in the contest against international competitors, seeking to mold Alibaba into a great enterprise. Inside Alibaba, not only does Ma practice Tai chi quan, he also insists on teaching it, jinyu (one of the skills advocated by Taoists , literally meaning "keep silent") and jingzuo (meditation) to his senior executives. As well as being good physical exercise, the teachings are meant to induce people to view the world from the perspective of Tai chi tu (literally, "Diagram of the Great Ultimate").
How does one break the ceiling?
As a young child, Jack Ma started reading Chinese martial arts novels, a habit that has developed into a lifelong commitment. Contemplating such ideas as "excess vs. deficiency of yin and yang," "activity vs. stillness," "open and closed," "advance and retreat," he is now striving to find a pace and force that will allow Alibaba to successfully reign for 102 years.
Alibaba has come to a critical juncture in its development. "The next three years will prove decisive in shaping the future of Alibaba," said Chief Strategy Officer Zeng Ming. "It will determine whether Alibaba transcends itself both externally and internally and transforms its initial lead into a position of lasting development." He went on to remark that at Alibaba employees are constantly aware of the challenges ahead, and the fact that the company is always at risk of being devoured in an increasingly competitive marketplace unless timely adjustments are introduced.
"A successful enterprise needs to be led by an entrepreneur of excellence," said Zeng. "In most cases, the height of the entrepreneur imposes the ceiling on the growth of the enterprise, for it is the entrepreneur who determines the height of the enterprise. Why do successful enterprises lose? The success of an enterprise lies in the idiosyncratic style of the entrepreneur. The more successful an enterprise is, the more idiosyncratic its leader will become; and in extreme cases, successful enterprises may become utterly isolated in the end. That is a trap many entrepreneurs fall into.
"For a truly successful entrepreneur, the toughest task is to rise above the self. How one keeps a habit of introspection while adapting to the ever-changing world is a rather demanding task for all of us."
But to the relief of Zeng and Alibaba senior executives, Ma is now striving for a breakthrough for both himself and Alibaba, taking the financial crisis as a turning point. "Throughout the past two years or so, Ma has been straining hard to break the limit within his inner mind, which motivated other senior executives to ponder what their own part should be: How should I make a breakthrough for myself?" Zeng remarks. "And it naturally led to the creation of many inspirational ideas."
As a result, we got all that quirky behavior from Ma and his staff members. Last summer, Ma went to Baiyunguan (White Cloud Temple) at Jinyun Mount in Chongqing, where he practiced jinyu and transcribed the sutra. In the autumn, he paid a visit to Kazuo Inamori in Kyoto, Japan, for a discussion on Man and spirit. In March of this year, Ma again led a team of 13 executives to the U.S., where they made an inspection tour of Google, Microsoft and Starbucks, and called on Bill Clinton and George Soros. Ma has, from the very beginning of his entrepreneurship, advocated the idea of "Eastern wisdom, Western operation and global marketing," and now he is cultivating himself with spiritual resources from both China and the West, ancient and modern. He is hunting for a way to transcend both himself and his business empire.
In February, before visiting America, Ma sent his assistant, Chen Wei, to the Chen village (Chenjiagou) of Wen County in Henan Province, where Wang Xi'an rested, the 19th century disciple of Chen-style Tai chi quan. Chen Wei told Wang Xi'an that Ma would find some time in the spring to study Tai chi quan under Master Wang, and Ma wished to learn not only authentic Tai chi skills but also knowledge for maintaining his company's harmonious development at a time of economic turmoil. The visit to Chen Village deeply impressed Chen Wei, as he still remembers how Master Wang flung him - a 1.8-meter-tall man - against the wall with just a flick of his hand.
Ma once said that every enterprise in China, before becoming the consummate master, has to grow from a little disciple who might be a rather awkward boxer. If it ever dreams of becoming a master, it has to practice Tai chi from the very beginning of its operation.
The third stage of Ma and the mirror of Alibaba
During a meeting in Bhutan in mid-June, Jack Ma told the audience an adapted version of the legend of Yang Luchan, the progenitor of Yang-style Tai chi quan.
The most interesting part of the tale was how Yang Luchan was taught the essence of Tai chi quan, "Great Master Chen Changxing agreed to accept Yang Luchan as his student," Ma said. "In the first year of his apprenticeship, Chen told Yang to forget all the martial skills he learned before; in the second year, Chen ordered Yang to pay attention to every detail in his everyday life; and in the third, to learn philosophy, through which Yang began to understand the principle of yin and yang; and only in the fourth year did Yang begin to learn martial skills; in the seventh year Yang became a master well trained in philosophy." This is the way Yang Luchan came to be known as Yang the Invincible, whose martial arts were unmatched in the capital.
Now we understand why Ma chose to study under Chen-style masters: He wants to draw inspiration from Tai chi for the development of Alibaba; also, he wants to transcend himself.
In fact, long ago Ma started his study of Taoism. Wang Shuai, Vice President of Alibaba Group, reveals that, apart from some Western philosophical works, Ma always keeps two Chinese classics in his car: Laozi's Tao Te Ching and Zhuangzi. Wang once joined Ma to practice jinyu and Tai chi quan, and it was then Ma told him that "many people are too busy walking to stop for a view of themselves. But to continue walking, they have to stop and look at themselves." In a conversation with Kazuo Inamori, Ma explained that having learned entrepreneurship and enterprise operation, he is now marching towards the third stage - that is, to study philosophy. It is high time for a search for the purpose of life. The 45-year old entrepreneur needs to stop for a clear view of himself.
But self-knowledge is the most difficult thing to attain. Borrowing as he did from the Delphic Oracle, Socrates' motto was, "Know thyself." Two millennia later, Nietzsche wrote:
"We are necessarily strangers to ourselves, we do not comprehend ourselves, we have to misunderstand ourselves, for us the law 'Each is furthest from himself' applies to all eternity - we are not 'men of knowledge' with respect to ourselves."
During the interview, Vice President Peng Lei told us a story, "During their visit to the U.S. one night, Ma and his 13 senior executives went for a drink. Cai Chongxin suggested that we make a comment about each other to find out what we actually were in each other's eyes. The talk went from 8 p.m. to 1 a.m., which was really an unforgettable experience, according to Cai. In the end, we realized that what you think you are is quite different from the impressions of those around you."
"It was just like looking at yourself in the mirror."
Ma observed that people at Alibaba need a mirror to "know thyself."
In Peng's opinion, he who is more mature loves more tranquility and balance and has a more urgent need for self-understanding, for he wishes to better understand himself so as to strike a balance in his mind. "The idea just occured to me that later this year, we should invite great masters to give three lectures on Confucianism, Taoism and Buddhism, respectively. It will allow us to acquire a better understanding of ourselves from the point of view of Tao."
For Alibaba is also in need of a mirror.
Seek the spiritual takeoff of a great enterprise
Abraham Maslow considers self-actualization the highest pursuit for human beings, and concludes that "those having actualized themselves are unmistakably devoted to pursuits of non-here and non-now aims: they follow the call of vocation." Alibaba staff members noticed that the issues Jack Ma kept talking about and thinking about over the years mostly concerned "mission" and "purpose."
During a Hong Kong shareholder meeting in early May, Ma said, "As the founder and CEO, I cannot cease to ask myself, 'Why did I found the enterprise, what does the company exist for?'"
After comparing Alibaba with certain great companies in the world, Ma seemed to better comprehend the importance of "purpose." As he understands it, a good company should, first of all, have no problem answering the question of purpose. Companies staffed by people with divergent views on purpose are doomed to fail.
Ma knows very well that a company should exist for something other than profit-making, that despite the obvious importance of profit a company should exist for more fundamental reasons. He says, "A company making little money is indolent and irresponsible, but companies driven purely by profit, it seems to me, are also valueless."
Whether a company is great or not lies not in its scale nor profitability nor market value, but depends on whether the company was founded upon a noble ideal, whether it creates value for the community.
Asked who Alibaba's biggest rival, Ma replies without hesitation, "Wal-Mart." People hear this and think Wal-Mart has been singled out solely from a competitive standpoint.
But what Ma actually has in mind is Sam Walton. He believes Walton is great because he instilled the concept of "customer service" into the minds of all of his staff members. All strategies and business operations at Wal-Mart are centered on this conviction and, thanks to Walton's unwavering commitment to this lofty ideal, Wal-Mart has grown into the No. 1 company in the world. Wherever Wal-Mart goes, life there is sure to improve for the middle class.
Purpose determines whether a company will be great, whether it will live a long life and transcend itself. As pointed out by Nikos Mourkogiannis, who views purpose as the starting point of a great company, "It is purpose that distinguishes greatness from excellence, legendary achievements from honorable feats, an eternal good name from ephemeral fame. " Jim Collins and Jerry Porras, authors of Build to Last, also observed that a well-conceived purpose is at the core of any long-lasting enterprise and may guide and inspire a company for a century or even longer.
To put it in plain terms, the essence of "purpose" consists of what is right and what is valuable. No purpose can be set in haste, as it needs to be explored and able to withstand the test of time. "The aim of success originates from a profound understanding of yourself and the environment you are in, from knowledge of your vocation," Mourkogiannis writes. "It requires your emotional self-knowledge and wisdom-in brief, all your talents, all your experience and beliefs. The purpose must be a gene imbedded in your belief, something you unconditionally believe in."
Can Alibaba define its purpose and stick to it forever? Can Alibaba think and act according to its purpose? Can such purpose be the root of 102 years of growth for Alibaba?
Defining the purpose of Alibaba as an enterprise
During the interview, Zeng Ming told us that many newly formed companies fail to define a clear aim; neither do they have any sense of vocation, since they strive merely for existence. But as they move forward, gain experience, enjoy greater social influence and become stronger at assembling resources, the seed of a dream will grow from the subconscious into a self-defined, self-driving and self-restraining force. The company's sense of purpose and its call of duty will then be clarified and the company becomes self-conscious.
Zeng offered a metaphorical interpretation of the notion of purpose: People who join a revolution do so with different motives, but a true proletariat fighter must be one who has experienced hardship and turned a concept into an ideal, honing his or her passion into sustainable courage.
He continued, "Yes, we coined the slogan, 'To make it easy to do business anywhere,' but I should also add that at that time, we were driven purely by passion. Alibaba is growing stronger, and only now do we feel the concreteness of responsibility. It is only when we are strong do we hear the call of duty."
Jin Jianhang, who has followed Jack Ma since 1999 and was one of the "Eighteen Arhats" (i.e. founders) of Alibaba (he is now president of koubei.com), was the one to coin the slogan, "To make it easy to do business anywhere." Jin catches our attention with the word "anywhere."
"Ma wants to do something for the world," Jin says. "He is preoccupied by how to make life easier for small business owners, enabling them to develop and grow in a better manner. Especially nowadays, when the Internet smashes national boundaries and becomes all-persuasive, Ma endeavors to break all sorts of limits, with a belief that small enterprises may develop better in the digital and information age than ever before."
The slogan was coined with the aim of supporting small and medium-sized enterprises. However, Alibaba had no definite purpose of its own until 2003, and the absence of a concrete purpose from the company's operating principles resulted in the following: the relationship and position of clients, personnel and stockholders was always in disarray. In the Dugujiujian (" Master Lonely Nine Sword") period of Alibaba, clients were not put in the No. 1 position. "Respect and service was rated ninth in terms of importance at that time," says Jin.
It was SARS that taught Alibaba staff and Ma that, at Alibaba, the top priority should always be the clients. The more difficult the situation is, the more will we care for our clients.
Even today, in Alibaba's training for newcomers, the lecturers will not neglect to mention this story: During the SARS epidemic, Ma, with his face covered by a surgeons mask, announced the decision that all 500 staff members in Hangzhou would work from home until the epidemic ended. For those who have no computers at home, they may move company PCs to their homes; for those without Internet access at home, a network would be provided to them by technicians. However, this was done without informing any clients. Any family member of the Alibaba staff receiving a phone call from clients would offer the greeting, "Hello, Alibaba." One of the staff members even asked his father, "Papa, please say 'Hello, Alibaba,' whenever you receive a phone call."
After the SARS storm, Ma summed up three principles: first, change is the only changeless thing in the world; second, never place profit-making at the top of the agenda; third, clients come first, personnel second, stockholders third. Jin sums up these principles in two words: "no profiteering." In 2004, Alibaba changed its values from Dugujiujian to Liumaishenjian. In the latter, "client first" is identified as the top priority.
Ma and Alibaba management have recently begun to realize the importance of this principle. "My recent reflections show that we have done a poor job regarding the 'client first' principle," Zeng says. "An organization, when it grows larger, may easily become so disconnected from its clients that it ignores the client in the decision-making process. When we have recalled our principle, we become more determined in our views and work. Once Ma attained clear thinking, the company's affairs were all handled in an orderly way."
What does Alibaba exist for? What do Ma and Alibaba teams run the business for? Ma has in recent years found clearer answers to these questions, making him all the more determined in his pursuit of true entrepreneurship.
What is the purpose of an enterprise? When asked at the stockholder meeting in Hong Kong in May, Ma answered that it is to "create value for the clients." As to the question, What sort of company is the greatest kind? Ma replied that it must be one that creates values, make its staff happy and earns good rewards.
"We consider it our mission to change the lifestyle of businessmen, to create value for the community and clients." Ma says, "This is a very important goal of our company. It is the firm conviction of Alibaba that has supported us in the past 10 years and will continue to support us in the coming decade."
Jack Ma's Wuji and Tai chi
During the interview, Wang Shuai told us how Ma proposed the thinking of Tai chitu (Tai chi diagram)and Yinyangyu in an executive meeting. "We now apply the thinking of yinyangyu in all our businesses," Jin says.
Ma is trying to shape the future of Alibaba with the wisdom of Tai chi.
The ancient Chinese understand Tai chi as the supreme and ultimate principle of the cosmos. Tai chitu (literally the "Diagram of the Great Ultimate"), the symbolic drawing of Tai chi, is made of a circle divided by an 'S' curve into a white half and a black half, which are termed yinyangyu. In yin there is yang, and vice versa. The diagram vividly depicts the philosophical thinking that everything in the world is composed of both yin and yang, which oppose each other but also complement each other.
In Build to Last, Collins and Porras used Tai chitu as a symbol for farsighted thinking and long-lasting code of conduct.
One of their findings was that all great companies are characterized by their idiosyncratic way of thinking. Things commonly identified as incompatible - that is, either black or white - with no other alternatives, may in farsighted companies gain value as the companies choose to include both black and white over an all-or-nothing approach.
In fact, with this wisdom, Ma has resolved a major contradiction that had confused the Chinese business circle for 30 years. Could enterprises adhere to idealism while striving for survive? Could they have goals loftier than profit-making while remaining profit-driven at the same time? Is it possible for them to reconcile short-term interests with long-term achievements?
"Alibaba is a company driven by dreams," says Wei Zhe, CEO of Alibaba B2B. There is something distinctly idealistic about the company right from the very start.
Thanks to dedicated efforts made by Ma and his staff members, this "dream-driven" company has now grown into the most successful e-business group in the world out of an entrepreneurial team of 18 members with a fund of RMB 500,000. It has turned a concept into a cutting-edge trend for business patterns: Alibaba B2B, with a market share as high as 67%, has established itself as a leader in the Chinese export and B2B markets; Taobao owns 90% share of China's C2C market, and its transaction value in 2008 reached a staggering RMB 99.96 billion; Alipay ranks No. 1 with a market share of 53.29%, thus becoming the largest independent third-party payment platform in China; Alisoft secures first place with a market share of 49.1% and leads the online management software market.
Ma concludes, "We have adhered to our dream for 10 years, and that is how we got to where we are today. We talked about our ideals when we started our business, we persisted in our ideals through tough times, and now, we are still talking about our dreams.
"Money-making is not our goal; rather, it is a result. Alibaba will become the most profitable company in the world."
The operating income and profit of an enterprise will not generate any good results unless the enterprise strives to accomplish its mission, and only the results can truly guarantee the interests and respect of the shareholders. "This is how we understand business," Jin says.
Based on our interview and research, we managed to create a Tai chi diagram to illustrate the development mechanism of Alibaba.
It can be said that the Tai chi diagram represents the pivotal point of Ma and Alibaba in their route toward self-transcendence.
The Tai chi logic is manifested in various aspects of Alibaba's management, from its abstract corporate culture to the concrete behaviors and performances of the employees, and from abstract idealism to concrete market value and profits; Alibaba manages to integrate them in a manner of "openness to both black and white, with equal stress on yin and yang," which serves as the driving force behind its rapid and sustained development.
However, at the core of the successful operation of this internal mechanism is the fact that Alibaba persists in a high degree of unanimity between strategy, business layout and core ideology towards "creating value for clients."
But how should we incorporate our values into the management of enterprises? According to Zeng, the secret of Alibaba's success "is doing abstract things in a concrete manner and doing concrete things in an abstract manner."
Kendo of "Fengqingyang"-forgetting the sword in your hand
During our interview, Peng Lei told us, "The most forceful way 'to do abstract things in a concrete manner' is to combine corporate values with job appraisals, as we did in 2003." She was refuted by Zeng, who said, "We will cancel all job appraisals for chief executives of our affiliates and encourage them to make innovations. Performance is concrete, but we need to blur the criteria of evaluation." And according to Wang Shuai, "This year, the group doesn't have any performance requirements for our affiliates. Ma requires the chief executives only to look back on what they have done at the end of the year and assess their performances as 'satisfying' or 'unsatisfying.'"
We discover that Ma is turning the essence of Chinese martial arts and the Tai chi he learned into the management wisdom of Alibaba.
The origin of Ma's obsession with kung fu is a long story. As a child, he was fascinated by martial arts and practiced free combat. He favors the swordsman novels of Jin Yong (a famous swordsman writer based in Hong Kong), and he has practiced Tai chi quan for more than 10 years.
For him, Jin Yong's novels are full of pleasure and romantic imagination. Ma realizes that "a man without dreams and romantic ideals will never succeed." Ma really believes that a lot of things mentioned in Jin Yong's novels are real, and he says, "For many things in his novels, people say they are unreal and impossible, but in fact, they can be real and possible."
In 2000, Ma was excited at the news that CCTV was about to shoot Xiao Ao Jiang Hu (The Smiling Proud Wanderer, one of Jin Yong's best-known novels) into a TV series, and he went about looking for personal connections in order to play the role of Feng Qingyang. But the actor for the role had been decided and he was versed in martial arts. Ma eagerly proposed to have a martial arts competition - "Two candidates go across a bridge and the one who beats the other down the bridge will win. And the winner will get the role." In the end, Ma was not chosen due to lack of acting experience. Returning to the company, Ma named all the offices after places in the novels of Jin Yong, and he even named Alibaba's values after the secrets of kung fu.
The "Master Lonely Nine Swords" used by Alibaba to name its nine values in 2001 come from Jin Yong's The Smiling Proud Wanderer. In 2004, after the SARS epidemic, Alibaba's values were condensed into "Six Pulses Magic Sword," an expression from Jin Yong's Eight Guardians of Buddhism.
Later, when he started Taobao. net, everybody chose characters in the swordsman novels of Jin Yong as their nicknames. Ma chose the name Feng Qingyang. "Feng Qingyang has always been my favorite because his strength lies in the fact that he shows no sleight of hand, in a manner I have always longed for, " says Ma, who believes that a real kung fu master should be capable of defeating his enemies without showing any "concrete" skills.
Actually, to fight "unskillfully" is the style Ma wants for the management of Alibaba.
Ma told his senior executives to "forget the sword in your hand" and "check how many things you have done for your clients, how much value you have created and how many people have become your clients because of what you have done" rather than looking into the figures of statement, profits, stock, etc.
According to Zhou Lan, a former secretary for Ma who has worked for Alibaba in many different departments, including sales, marketing and administration, Ma often told them, "The key to being a successful salesperson is not to be preoccupied with the money in the pockets of your clients. If you always think about the money there, your clients will never be satisfied with your services. You may make money for a while, but you will lose your clients some day," with a reference to Hangzhou Zhang Sheng Ji, a Hangzhou-based hotel.
"When we decide on a business, we should not ask, 'How much money can we make out of it?' or, 'What about our competitors in the business?'" says Alipay Vice President Qiu Changheng. "Instead, we should ask, 'For whom we are doing the business? Do clients really need the service?'" During their recent discussions about Alipay business planning for the coming five to 10 years, they drew a circle at the center to represent consumers and another circle nearby to represent businesses. "We are to discuss topics such as, 'What kind of service are we able to offer?' 'How do we design our services?' and, 'What kind of value can we offer?'" This is the key point. "We are not preoccupied with how much profit it will bring us, because profit is only a result, not our starting point. We should proceed from the interests of our clients."
During the three months following Alibaba B2B's listing, its stock price fluctuated, slumping from a high of HK$41.80 to HK$3.46. Many people expected Ma's response, including both investors and its gloating competitors. Some small shareholders wrote letters on the Internet asking him to buy back the shares to lift the price. Ma remained unmoved. For a while, Wei couldn't help suggesting, "Shouldn't we do something about it?" Ma replied, "Think carefully about it. Do you want to do the business for just one year or for many decades?"
"So I told my employees and shareholders to forget about stock price," Ma says, "We will keep our promise to our clients and to our employees. We didn't make a promise of stock price; what we have promised is our performance and how many clients will benefit from us."
Therefore, Ma cancelled job appraisals and profit-making requirements for presidents of Alibaba affiliates. He even put a cap on the quarterly profits for Wei and Lu Zhaoxi, president of Taobao, and required them to assess their performance as "satisfying" or "unsatisfying."
In a sense, the "satisfying" and "unsatisfying" criteria is the secret of Ma, which integrates Feng Qingyang's Kendo with the essence of Six Pulses Magic Sword and enables Alibaba to transcend itself and proceed toward greatness.
According to Zeng, Alibaba's innovation is oriented toward its clients. It's true; when you really listen to your clients, you realize that they are never satisfied and they will let you know which work is done well and which is not, thus motivating you to further improve your services.
"Follow others rather than center on yourself; you thrive when you follow others, and you stagnate when you're concerned only with yourself" - that is the principle and wisdom of Tai chi Pushing Hand.
A new state of Alibaba-"internal and external cultivation, and a win-win situation"
Alibaba finds itself facing a once-in-a-lifetime chance. "We are excited to see that a new commercial culture is rapidly taking shape," Zeng says. "China is at the turning point where an industrial society is being transformed into a post-industrial society. It may take three or five years, but we have seen its power."
Zeng believes that the modern industrialized production standard and modern commercial culture are products of the third industrial revolution. The world economy approached post-industrialism after developing for more than 200 years, but in the Internet age, especially with the advent of "Cloud Computing," we are undergoing a fundamental technical revolution, which lays a foundation entering the post-industrial era.
The three core features of industrial production are "standardization," "production line" and "large-scale production," and the resultant lowered production costs. Large-scale production reaches a new height as a result of the trend toward "made in China." The production relations of the post-industrial era differ from those of the industrial era mainly in the economy of scope. "Specialized logistics," "personalized marketing" and "flexible manufacture" are the backbone of the post-industrial era, and at the core there is mass customization and production based on demand.
One hundred years ago, Ford and General Electric seized the opportunity offered by the second industrial revolution, made great achievements and took the lead in the world. Now, China is moving faster in mass customization based on demand, as compared with other countries. This is possibly "a chance for China to surpass other countries in economy," and "China will truly lead the world as long as it grasps the opportunity, though it lagged behind Western countries by 200 hundred years during the industrial era," Zeng says.
For Alibaba, this is also a revolutionary opportunity to double its results, transcend itself and make history. As Zeng put it, "E-business will facilitate a new industrial revolution caused by mass customization, and it should be viewed as a substantial force. You will not make any achievement unless you keep up with the force."
Zeng Ming holds that the thing Alibaba has to do now is construct e-business infrastructure to propel the revolution from the bottom. A public platform of e-business technique and service should be built based on SaaS (software-as-a-service), e-payment, online sale, logistics distribution, credit system, etc., by which SOEs will be able to use more efficient and reliable services with lower costs in production, sale and distribution. He says, "When internal management and external cooperation can be achieved more efficiently via the Internet, the economic mode of all of society will be changed. The new commercial culture is an entirely new production method based on real informatization."
At the First Net Trader Fair held on May 17th 2009, Jack Ma announced that he will integrate the strength of Alibaba with Taobao and build up an e-business platform to realize C2B2B and launch a new concept, "Net goods," which are goods that have broken away from traditional channels. According to him, if we accept that Net traders emerged in the first decade of e-business development, marking the beginning of the "Net trading era," the following 10 years will be the "Net goods era," when the excessive profits from channels will be returned to consumers and manufacturers via the Internet. This denotes a revolution in consumption and mode of production, with the ultimate purpose of preventing excessive profits. By then, Alibaba B2B will be the largest Net goods manufacturing platform, and Taobao the biggest Net goods consumption platform. "Net goods, as well as 'made in China,' will become the mainstream in the coming 10 years," Ma says.
Wei explains that "Net goods" means customized production based on consumers' demand and flexible production of manufacturers. C2B2B is an e-business revolution. "Small-scale customization, flexible production and point-to-point logistics" will not only cut down inventory but also reduce empty loading rate. Products will be delivered directly from the manufacturers to the consumers, involving no waste, so customers will truly become the focus of all activities. In this sense, Alibaba may supplant Wal-Mart. Alibaba is creating a healthier "green mode" to create the greatest values with the least resources, realizing an essential breakthrough in post-industrial consumption.
In Wei's opinion, the new commercial culture is not only a reshuffling of production relations but also a remolding of social relations, for in the industrial era, because of monopolized resources and capital, all social relations are incongruous and in conflict, resulting in endless conflicts and confrontations, whereas the nature of the "green mode" now being pursued by Alibaba lies in "harmony" - the harmony between companies, between employers and employees, suppliers and consumers.
"The new commercial culture focuses more on cultural issues than commercial ones. Culture is the impact behind all economic phenomena." Peng discovers that Alibaba has actually influenced a large group of clients in its behavior and values. What impressed her most was an episode in Guangdong, when she was there for a meeting; tradespeople often got together to chat about how to make money or where to go for a sauna. But now she often finds that some people, after conducting business with Alibaba for some time, are discussing how to manage an enterprise, how to aid children in orphanages and so on, in conjunction with the values and culture of Alibaba. She observes, "What we have brought to our clients is not only business, but also ways to do business."
Ma's Tai chi skills have led Alibaba to a new height, where Alibaba is no longer a "business organization" based on material foundation but a "business institution" with corporate culture and values at its core. After exercising Six Pulses Magic Sword to a certain level, Ma is pushing Alibaba toward a new commercial culture that they can firmly believe in: it is based on openness, the spirit of sharing, globalization and social responsibility; their business principles are clients first, employees second and shareholders third; they believe in the future of the consumer-oriented business system and believe that SMEs will become the main body of commercial societies; they believe that "Net traders, Net goods and Net regulations" will become the three pillars of the commercial ecological system.
With his own commercial practice, Ma tells us that, in order to succeed, future enterprises must possess such features, which are also basic principles of future business.
"We will announce to the world on September 10 that we hope to create a new commercial culture for the world via e-business and the Internet in the next decade; we don't want to see fraud and dishonesty; we want fewer non-transparent companies and profit-oriented companies. It is our mission to influence the world and improve the business world through the Internet," Ma said at a shareholders' meeting in May.
Jin adds, "Business principles are not stipulated by Alibaba, but are formulated to be shared with others. We hope future enterprises will abide by the principles. Only in this way can a company enhance its competitiveness with a truly global vision."
Zhu Yichong, born in 1984, graduated from an ordinary junior college, and he used to play computer games at school. Failing to find a job after graduation, he started an online shop on Taobao in 2006. Three years later, the "Xinlan T Tou" shop run by him and his girlfriend earned two "gold crowns" with a weekly business revenue of RMB 800,000. They rented a 2,000 sqm storehouse in Shanghai and hired 50 employees. He says that it is Ma who helped him find his life's direction and it is Taobao that taught him methods of doing business. More importantly, he learned the basic principle of business: good faith. So far, Taobao has more than 70 "gold crown" sellers.
At the Yiwu Institute of Business Administration, a group of students who just enrolled start their Net store on Taobao with encouragement from Vice President Jia Shaohua. At Entrepreneurship School, we can see a group of students busy buying and delivering goods during lunch break. On the wall behind them, there is a picture of Ma.
As a matter of fact, numerous such sellers, suppliers, consumers and logistics companies have come together and formed enormous ecological e-business groups centering on Taobao and Alibaba. Especially after Alibaba introduced the strategy of constructing an "ecological enterprise" in 2007, the trend has become even stronger, and together they constitute a huge "e-business stakeholder" cluster, which is constantly changing Alibaba's business pattern.
However, whatever changes Alibaba undergoes, the company will always feel the simplicity, sincerity, enthusiasm and persevering spirit of Ali.
This is because all 14,000 employees of Alibaba are motivated by a great mission in front of them, and behind them is Ma, practicing Tai chi quan.
Jin Yong once said, "When you practice Tai chi quan, your focus is not on your physical strength, but on the kung fu in your heart." Today, Ma, who worships Jin Yong, shares with us not only money but, more importantly, spiritual strength.
