86 years to go
Breakingviews imagines the letter Jack Ma, founder of Alibaba Group, might pen to investors in the Chinese e-commerce empire a year from now.
Our first full year as a U.S.-listed company brought growth and change for Alibaba Group. As I prepare to step down as executive chairman, I want to warmly thank you for making our success possible.
We continued to invest in our core e-commerce marketplaces throughout 2015, true to our customers-first strategy. Our new “Little Emperors’ Month” shopping festival broke records after we waived all commissions for sellers. We seized opportunities in commercial property to launch our new Alimall concept, matching customers with suppliers in a convenient offline-to-offline environment.
Elsewhere in the ecosystem, our unlisted financial affiliate is thriving. In less than a year, Alibank has grown into China’s eighth biggest lender, after acquiring several troubled regional banks for an undisclosed sum. By December it had helped provide over 30 million crowd-funded residential mortgages.
The endurance of a horse is tested on a long journey. Profitability may decline further as we invest in lower-margin businesses, and we were of course disappointed by U.S. regulators’ decision to block our offer for Sony Pictures Entertainment in March.
But our customers are delighted with our progress. The first season of “Jack Ma’s The Apprentice” drew weekly audiences of 150 million. While we have written down the value of our stake in social network Weibo, I look forward to our new partnership with Facebook, which recently opened its flagship China office here in Hangzhou. And we are optimistic that shareholders in eBay will look favourably on our recent offer to buy the company and add over 1 million sellers to the Alibaba family.
As you know, from today I take a step back to focus on philanthropic activities, starting by giving away my remaining 8 percent stake in Alibaba. Rest assured that I will resolutely continue to protect our cultural integrity as head of the group’s controlling partnership. I welcome Facebook founder Mark Zuckerberg as our newest member, and look forward to him participating in our meetings in fluent Chinese.
Challenges remain. The regulators’ investigation into tax havens used by Alibaba and its peers continues. Global tech valuations are sliding. As a shareholder, I am naturally disappointed that the stock market fails to appreciate the wisdom of our decision to build the business for the long term. Nevertheless, I have faith in your patience. In our planned lifespan of 102 years, there is still plenty of time to achieve our dream!
This view is a Breakingviews prediction for 2015. Click here to see more predictions.