Good morning.
In 2013, Alibaba co-founder Jack Ma stepped down as CEO of the Chinese e-commerce giant at 48, arguing that he was too old for the job. (As Ma wrote in a letter: “Alibaba’s young people have better, more brilliant, dreams than mine.”) The same year, René Obermann, then 49, told me he was stepping down as CEO of Germany’s Deutsche Telekom because he felt too young to stay in a big company. He wanted to be more entrepreneurial. Ma was steering an $8.4 billion-a-year startup in the world’s hottest major economy; Obermann, transforming an $80 billion-a-year former state monopoly on a continent mired in recession.
I thought of these two because Alibaba.com, the B2B platform that launched Alibaba as a company in 1999, invested in European platform operator Visable last year and will today announce a partnership at the Paris Olympics to help former athletes become entrepreneurs. I can’t say more about that—the launch event is after this newsletter goes out and I agreed to keep it vague—but this gave me an opportunity to speak with Alibaba.com President Kuo Zhang about navigating a tough climate.
Alibaba has faced a range of challenges at home and abroad, recently shelving plans to list its logistics unit and grocery chain. Zhang’s wholesale unit is unrelated to those, generating almost $3 billion a year from connecting roughly 200,000 suppliers worldwide with more than 48 million global business buyers on its platform. As he notes, these are small and medium-sized enterprises that face similar challenges.
“They have a lack of experience, a lack of resources, they don’t know where to start, and they don’t know who to work with,” he says. “We’re a platform using all kinds of technologies to help them boost their business and compete.”
“What suppliers want is to give buyers what they need in the most efficient and price competitive way,” he adds, noting that SMEs now make up more than 60% of China’s exports and a growing portion in other parts of the world. Zhang’s focus is on wooing them to his platform by investing in AI, creating a more digitized and diversified supply chain, and offering guarantees on pricing, delivery and refunds. “We want the global trade experience to be just like B2C (business-to-consumer) online shopping.”
Zhang says he’s less concerned about geopolitics than keeping up with AI. “I need to keep updating my script and my keynotes,” he says. “It’s the first time that I cannot catch up with the product because it’s developing so fast.”
And the speed of change, was one reason that Jack Ma initially said he was stepping back. (He went on to run Ant Group and has since laid low, but did praise Alibaba’s restructuring a few months ago.)
René Obermann, meanwhile, briefly ran the Dutch cable operator Ziggo prior to a merger. He moved on to private equity firm Warburg Pincus, where he now chairs the European region, and is also the chairman of Airbus.
Diane Brady
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