What’s Next at Alibaba?

Monday, December 4, 2006 23:35

A few years ago, I saw Jack Ma speak at an Australian Chamber of Commerce meeting, and even though it was probably a speech he had give a dozen times, I was impressed.

Listening to him speak reminded me of a number of friends who in the late 90s who were cramped into small spaces shoe stringing a company that would hopefully at some point IPO. you could hear the passion, hope, and his personal investment come out when he spoke…. and I think everyone in the room felt it cause not a single mobile phone was answered for the hour and a bit we were there.

It was still pre-Yahoo days, and the Alibaba story was just getting out, and some of the most memorable things for me were (remember.. .he was not rich yet).
1) He and his team would wait for the cheapest cabs rather than spend an extra .4RMB/ KM… that is .05USD per KM
2) Alibaba was a true Chinese startup and the management team worked out of apartments, cafes, and held out on the office until they were sure they could support it
3) All new Alibaba offices had to start out of apartments, and once it was able to financially hold itself up it could then move into proper digs.

A few months later, while having dinner with an early investor we were discussing the “Alibaba story”, and it is only in retrospect that I can really appreciate Jack’s genius when it came to landing the Yahoo investment.

And now two years later, it looks like Jack has something else cooking……

The last few weeks have seen a lot of activity in the Hangzhou HQ of Alibaba, and it has me wondering what is next..

October 30: Alibaba Invests in Koubei
In what may be Alibaba’s answer to Google ads, Alibaba reportedly paid between 5 to 6 million USD for a share of Koubei. As reported by China Web Review, it didn’t take long for Koubei ads to be up on Yahoo China

November 20: Former Head Of B&Q China Joins Alibaba
B&Q has been the big box darling in China. More successful than their E.U. Operations, there are now over 50 stores in China, and they are opening what seems like a store every couple of weeks now.

The success comes from a good strategy, good management, and cash, and Alibaba (cash flush) has now added to the management side of the equation.

So, the question in my mind is why would a big box, brick and mortar, executive join a company that is solely on the cyberstage at this point?

Is Alibaba going to go after Wal-Mart? they know all the suppliers already…

November 24: China’s State Post Bureau to cooperate with Alibaba in e-commerce
Through the success of Taobao, Alibaba was able to jump from B2B to B2C, and jump they did… right on top of Ebay‘s head.

for Alibaba, key to the success of Taobao has been Alipay. Ebay was just not able to make the money side work for customers, and the result was that Taobao was able to grab the critical mass of traffic to crush Ebay’s China dreams.

This cooperation in my eyes is good all around for a couple ways:
1) China Post has the best logistics network in China, and would effectively allow Tao Bao participants to send and receive anywhere
2) While not reported, the privatization of China Post and resulting separation of China Post’s banking arm, could be a very flexible platform through with ecommerce payments are made.

Wrap-Up:
Jack Ma has been the poster child in China for successful entrepreneurs. He took some savings, strapped together some seed money, and within a few years had placed his company on the tour plan for all international venture capitalists.

While starting with Alibaba, the competition with Global Sources had to be daunting to say the least, but by bringing in the right people to help formulate corporate strategies early, Alibaba was able to move from B2B to B2C, and was able to land Yahoo China.

As indicated above, the last month has been an active one, and I think that 2007 will bring some Alisurprises to companies who had no idea Alibaba was even interested in their space.

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One Response to “What’s Next at Alibaba?”

  1. All Roads Lead To China » What’s Next at Alibaba? (Part 2) says:

    May 15th, 2007 at 8:05 pm

    […] 6 months ago, I began to wonder what was next for Jack and Co at Alibaba. […]

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