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.


Oil near 4-year high as producers resist output rise to offset Iran sanctions

Updated 18 min 42 sec ago
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Oil near 4-year high as producers resist output rise to offset Iran sanctions

  • The United States from November 4 will target Iran’s oil exports with sanctions
  • US President Donald Trump has demanded that OPEC and Russia increase their supplies to make up for the expected fall in Iranian exports

SINGAPORE: Oil prices on Tuesday were within reach of four-year highs hit in the previous session, as looming US sanctions against Iran and unwillingness by the Organization of the Petroleum Exporting Countries (OPEC) to raise output supported the market.
Brent crude futures were at $81.45 per barrel at 0421 GMT, up 25 cents, or 0.3 percent, and close to the intraday peak touched the previous day at $81.48, the highest level since November 2014.
US West Texas Intermediate (WTI) crude futures were at $72.27 a barrel, up 19 cents, or 0.3 percent from their last settlement.
The United States from Nov. 4 will target Iran’s oil exports with sanctions, and Washington is putting pressure on governments and companies around the world to fall in line and cut purchases from Tehran.
“Iran will lose sizeable export volumes, and given OPEC+ reluctance to raise output, the market is ill-equipped to fill the supply gap,” Harry Tchilinguirian, global head of commodity markets strategy at French bank BNP Paribas, told the Reuters Global Oil Forum on Tuesday.
OPEC+ is the name given to the group of oil producers, including non-OPEC supplier Russia, that agreed to curtail output starting in 2017.
While Britain, China, France, Germany, Russia and Iran on Tuesday said they were determined to develop payment mechanisms to continue trading despite the sanctions by the United States, most analysts expect Washington’s actions to knock between 1 million and 1.5 million barrels per day (bpd) of crude oil supplies out of markets.
“We view Brent’s rally above $80 per barrel as fundamentally justified,” said Fitch Solutions in a note.
US President Donald Trump has demanded that OPEC and Russia increase their supplies to make up for the expected fall in Iranian exports. Iran is the third-largest producer in OPEC.
OPEC and Russia, however, have so far rebuffed such calls.
“Any formal decision on oil output by the producer group, barring an extraordinary meeting, will only take place at the December meeting. Thus, the window period for oil prices to potentially extend gains is quite wide as Iran loses exports and OPEC+ remains on standby,” Tchilinguirian said.
Ashley Kelty, oil analyst at financial services firm Cantor Fitzgerald said crude could soon hit $90 per barrel.
“We don’t believe OPEC can actually raise output significantly in the near term, as the physical spare capacity in the system is not that high,” Kelty said.
Bank of America Merrill Lynch has lifted its average Brent price forecast for 2019 from $75 per barrel to $80, while it increased its WTI crude oil forecast by $2 to $71 per barrel.
The bank said “the Iran factor may dominate the market near-term and cause a (crude price) spike,” although it added that emerging market “demand concerns could reappear thereafter.”
Indian refiners — struggling from high crude feedstock prices and a sliding rupee — are planning to reduce oil imports in what could be a first sign that high prices are starting to hurt demand.
Despite the bullish sentiment, some traders said current prices already reflected the tighter market, and that more oil would be coming in 2019.
Commodity trading giant Vitol said on Tuesday that non-OPEC producers, especially the United States, may insert up to 2 million bpd of new crude into the market in 2019.
To reflect rising US oil exports, CME Group Inc. said on Monday it will launch a WTI Houston crude futures contract in the fourth quarter.
CME’s announcement comes after rival Intercontinental Exchange said in July it would offer a Houston crude futures contract.