Alibaba’s co-founder and executive chairman, Jack Ma, announced his plans to step down from the colossus Chinese e-commerce company. He cited his goal to pursue philanthropy in education as his number one reason, Fortune reports. This is definitely a huge change for the $420 billion internet firm.
Ma was a former English teacher before he started the company in 1999. He was successful in building it into one of the world’s most consequential e-commerce and digital payments companies. Ultimately, this revolutionized the way Chinese people shop and pay for stuff.
In the long run, this success brought his net worth to over $40 billion, making him the richest man in China. He is even greatly revered by his fellow countrymen, with some of them hanging his portraits in their homes to worship in a very similar way they pay respect to the God of Wealth.
A spokesman for the company clarified Ma’s departure. Basically, he will still remain the executive chairman and is expected to provide transition plans over a significant period of time. This is contrary to a previously published story stating that his retirement is immediate. It turns out that the announcement was taken out of context and “factually wrong.”
Ma will turn 54 come Monday. His birthday also perfectly coincides with the Chinese holiday called Teacher’s Day. The latter, as the name suggests, simply celebrates all of the country’s educators.
In 2013, Ma also decided to step down as the company’s chief executive, though he chose to remain as its executive chairman.
During an interview with Times, he said that when his retirement comes, he would focus all his resources on education.
Alibaba first started as a business-to-business marketplace. However, when it began selling to consumers, it experienced an enormous growth. In fact, it is considered as one of the largest payment processors to date, thanks to its Alipay service (now called Ant Financial). The latter solely rely on 2D code that is linked to bank accounts in order to enable retailers to accept electronic payments. Ant Financial has revenues of about $40 billion a year.
With the consolidation of political power by China’s president, Xi Jinping, however, Alibaba’s business journey has greatly changed. Xi has been consistent in representing himself as an anti-corruption reformer. He even spearheaded a campaign that has punished about 1.5 million members of the Communist Party. That effort helped him consolidate party and popular power, leading to securing constitutional changes that allow him to serve as president for life.
Eventually, this allowed Xi to tighten his control over businesses, especially the ones that allow consumers to communicate over the Internet. He has also gone after billionaires who have mismanaged companies and allegedly committed crimes, with bribery and running afoul of the country’s politics being the infamous ones.
Alibaba’s growth and Ma’s wealth climate changes in modern China, as a burgeoning urban middle class now has more resources to spend. Authorities, on the other hand, enabled large accumulations of wealth. This is most especially the case when connected to forward-thinking enterprises.
Just last month, the company reported around 60 percent increase in its quarterly sales, and this happened despite its profits failing. The company’s annual revenue also totals about 250 billion yuan, or $40 billion.
Alibaba is not only a company deeply rooted in China, as it has made few inroads outside of the country. Its closest counterpart, Amazon, has crossed back and forth over the $1 trillion market value recently, and its CEO, Jeff Bezos, is the world’s wealthiest man, worth about $160 billion.
While it is true that Alibaba continues to a dominant force in China, its efforts of international expansion always face difficulty.