Alibaba founder Jack Ma to step down in 2019, pledges ‘smooth transition’

Jack Ma, who founded e-commerce giant Alibaba Group and helped to launch China’s online retailing boom, announced Monday, Sept. 10, 2018 that he will step down as the company’s chairman next September. (AP)
Updated 10 September 2018
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Alibaba founder Jack Ma to step down in 2019, pledges ‘smooth transition’

  • Ma, who has expressed a desire to follow in the philanthropy footsteps of Microsoft founder Bill Gates, said he would remain on Alibaba’s board until 2020
  • Ma was an English teacher before starting Alibaba in his apartment in the eastern city of Hangzhou in 1999

SHANGHAI: Alibaba co-founder Jack Ma announced on Monday he would step down as head of the pioneering Chinese e-commerce giant in one year, a departure already drawing comparisons to the retirement of late Apple founder Steve Jobs.
Analysts said the early withdrawal of the 54-year-old Ma, who became the charismatic face of a company that has revolutionized how and what China’s people consume, will test the company’s ability to carry on Ma’s vision amid rising competition.
But like Apple’s transition to current boss Tim Cook, Alibaba CEO and anointed successor Daniel Zhang may be less magnetic than his predecessor but has proven an able steward since effectively taking the operational reins years ago, they said.
“Day-to-day operations-wise Alibaba will not be affected that much. But since he’s (Ma) the face of the company, people may lose a little bit of faith,” said Jackson Wong, associate director with Huarong Securities in Hong Kong.
“But where Jobs died, Ma is expected to stay on in an advisory role, so there shouldn’t be too much impact.”
Ma — who turned 54 on Monday — said in a statement that he will stay on as executive chairman until his 55th birthday before handing over that role to Zhang.
“While remaining as executive chairman in the next 12 months, I will work closely with Daniel to ensure a smooth and successful transition,” Ma said.
Ma, who has expressed a desire to follow in the philanthropy footsteps of Microsoft founder Bill Gates, said he would remain on Alibaba’s board until 2020.
“The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba,” he said.
Ma was an English teacher before starting Alibaba in his apartment in the eastern city of Hangzhou in 1999 — where its headquarters remain to this day — building it into an e-commerce colossus and becoming one of the world’s richest men and most recognizable figures in China.
He has a net worth of more than $40 billion according to the Bloomberg Billionaires Index, and Alibaba, which has shares listed in New York, was valued at $420.8 billion as of last Friday.
“Ma possesses an enviable clarity about how everything fits together,” said Mark Tanner, founder of Shanghai-based research and marketing company China Skinny, told Bloomberg News.
“He has understood Chinese consumer needs better than anyone and provided online services to meet them through convenience, entertainment and efficiencies.”
Alibaba sought to reassure investors of the change, with Ma saying he had “full confidence” that a leadership hierarchy in place for years will “win support from customers, employees and shareholders.”
But while Alibaba may lose the company’s face, analysts said the business brains remain with Zhang.
With his impish grin, Ma in recent years has largely assumed a role as a globe-hopping ambassador, marked by playful antics such as dressing up as Michael Jackson for a dance routine at a company gathering last year.
But it has been largely under the more reserved Zhang’s stewardship that Alibaba’s two main e-commerce platforms, Taobao and Tmall, have turned into richly profitable cash cows and other arms such as digital payments have flourished, said Wong of Huarong Securities.
The company has wowed investors year after year with sterling revenue growth with Zhang at the helm.
But Alibaba faces intense competition in China from the likes of rivals Tencent, JD.com, and other rising upstarts.
Alibaba still dominates Chinese e-commerce, however, and is pouring investment into new initiatives to broaden its ecosystem and stake out position in fast-growing future arms.
These include bricks-and-mortar retail, cloud computing, digital media, movies, the grocery sector, meal deliveries and advertising.
It also has upped investments in overseas ventures and in 2015 bought the South China Morning Post newspaper.
Alibaba did not specify exactly what Ma has planned post-retirement, but the former teacher has in recent years taken on education initiatives as pet projects.
“I still have lots of dreams to pursue. Those who know me know that I do not like to sit idle,” he said.


US in criminal probe of China's Huawei

Updated 17 January 2019
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US in criminal probe of China's Huawei

  • The Wall Street Journal said the US justice department is looking into allegations of theft of trade secrets from Huawei's US business partners
  • Huawei forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government

WASHINGTON: US authorities are in the "advanced" stages of a criminal probe that could result in an indictment of Chinese technology giant Huawei, a report said Wednesday.
The Wall Street Journal, citing anonymous sources, said the Department of Justice is looking into allegations of theft of trade secrets from Huawei's US business partners, including a T-Mobile robotic device used to test smartphones.
Huawei and the Department of Justice declined to comment on the media report.
However, Huawei noted that "Huawei and T-Mobile settled their disputes in 2017 following a US jury verdict finding neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile's trade secret claim."
The move would further escalate tensions between the US and China after the arrest last year in Canada of Huawei's chief financial officer Meng Wanzhou, who is the daughter of the company founder.
The case of Meng, under house arrest awaiting proceedings, has inflamed US-China and Canada-China relations.
Two Canadians have been detained in China since Meng's arrest and a third has been sentenced to death on drug trafficking charges -- moves observers see as attempts by Beijing to pressure Ottawa over her case.
Huawei, the second-largest global smartphone maker and biggest producer of telecommunications equipment, has for years been under scrutiny in the US over purported links to the Chinese government.
Huawei's reclusive founder Ren Zhengfei, in a rare media interview Tuesday, forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government.
The tensions come amid a backdrop of President Donald Trump's efforts to get more manufacturing on US soil and slap hefty tariffs on Chinese goods for what he claims are unfair trade practices by Beijing.
In a related move, lawmakers introduced a bill to ban the export of American parts and components to Chinese telecom companies that are in violation of US export control or sanctions laws -- with Huawei and fellow Chinese firm ZTE the likely targets.
"Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People's Liberation Army," said Republican Senator Tom Cotton, one of the bill's sponsors.
Democratic Senator Chris Van Hollen said in the same statement: "Huawei and ZTE are two sides of the same coin. Both companies have repeatedly violated US laws, represent a significant risk to American national security interests and need to be held accountable."
Last year, Trump reached a deal with ZTE that eases tough financial penalties on the firm for helping Iran and North Korea evade American sanctions.
Trump said his decision in May to spare ZTE came following an appeal by Chinese President Xi Jinping to help save Chinese jobs.