Why has Alibaba’s Jack Ma been so successful?

British retail bosses can learn a lot from China’s outgoing retail titan…

This article was first published on Management Today

David Blair, Global CEO, FITCH

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That Jack Ma has profoundly altered the face of business, both in China and here in the West, is not news. Many business leaders have scrambled to watch and learn as the project he started in a shared apartment in 1999 transformed into an organisation that has successfully infiltrated the entire Chinese shopping experience and continues to drive record profits.

And his record is not only rooted in his business success: he is famed for his flamboyance. His biographer Duncan Clark has put his success down to his charisma, as well as his strategic vision.

As he steps down from the company, there are many questions over the next stage for Alibaba. But first, there are crucial lessons to be learned from the man born to a poor family in Hangzhou, who can now use his £31billion fortune for his philanthropic efforts and future business ventures.

Customer-first innovation

Jack Ma, on finding no Chinese beers in his first online search for “beer”, saw an opportunity for a company that filled that space by providing an online marketplace. Alibaba was born — a key innovation that filled a gap for consumers. This can be taken as Ma’s template for future success with the company.

His reign over Alibaba has seen some amazing innovations through its pursuit of “new retail” — or the ‘blending of digital into real-world shopping experiences with the goal of creating the best of both worlds’. Its system of online platforms have enabled the provision of fantastic retail experiences that many struggling high street brands in the UK desperately want to emulate. These range from in-App browsing and payments that empower physical shopping, to Alipay — the brand’s popular payments platform — to automation and machine learning enabling it to understand the customer and move into spaces such as hospitality.

Look at Alibaba’s Singles Day, now synonymous with the Alibaba brand. An obscure anti-Valentines day begun by students in China, Alibaba co-opted the day in 2009 and over less than a decade has launched it into a glittering celebration, in which people across China buy themselves gifts — whether single or not. Last year, $30.8 billion in sales were made. This kind of scale has only been achieved because Alibaba used data to inform how to provide exceptional, customer first experiences.

Alibaba’s mastery of this ecosystem is what sets it apart: data-driven decisions around what customers want from a business, and in a way that customers love. Ming Zeng, now Chief Strategy Officer at Alibaba Group, put it this way: “Alibaba does what Amazon, eBay, PayPal, Google, FedEx, wholesalers, and a good portion of manufacturers do in the United States, with a healthy helping of financial services for garnish.”

Fostering talent

Ma, originally a teacher, has always valued his younger talent pipeline: he has explicitly left the business in order to enable the next generation to create what’s next, declaring: “I’m the person always looking forward”. He has also repeatedly advocated for gender parity in leadership, arguing that women in senior positions are essential to a healthy business. Unlike many of its big tech counterparts in the West, nearly half of Alibaba’s senior management team are women.

However, his legacy in terms of talent is somewhat diminished by his support of the ‘996’ working model: employees work 9am-9pm, six days a week. He has gone so far as to call the 12 hour day a ‘blessing’. It’s common practice in China, and has been called the ‘hustle’ that sets Chinese tech companies apart from Silicon Valley giants — but this does call into question employees’ well being.

Research indicates when working weeks go over 40 to 50 hours, employees’ total output over an extended period of time will drop below the level it had been in shorter working weeks. I’ll wager that if his successor, Daniel Zhang, reduces the working hours expected of employees, Alibaba’s overall output and productivity could improve even further.

Legacy

There are clear takeaways for business leaders from the career of Jack Ma — even for those less willing to dance onstage to Billie Jean. A mindset that utilises data to understand what customers need, implemented in a cross-channel approach to ensure a brand can provide an all-round customer-first retail experience, is essential for the customers of today.

As Ma himself said: “The world is big, and I am still young, so I want to try new things.” So do customers.

Follow David on LinkedIn here

Get in touch: hello@fitch.com

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