China’s New Rock-Star CEOs

Even as China’s economy zooms forward at warp speed, Chinese CEOs till tend to be low key and secretive, like the apparatchiks of old. Perhaps remembering the Maoist days when wealth and fame attracted nothing but political headaches (and worse), they show caution, not charisma. And because few speak English, Chinese CEOs are little-known in the West. A new breed of Web entrepreneurs is changing all that.

Dubbed “Internet heroes,” these mavericks promote their own personalities as much as the corporations they run. They hog the limelight, glad-handing with the likes of Bill Clinton and Tony Blair. At a high-profile Internet forum late last year in Hangzhou, reporters thrust a forest of microphones at Charles Zhang, the stylish boss of Chinese Web portal Then part of the press horde hived off in pursuit of William Ding, the 34-year-old CEO of highly profitable Shanghai-based Timothy Chen Tianqiao of Shanda Interactive, whose multi-player online games (and sales of pre-paid cards to gamers) are the craze among Chinese youth, was ranked as China’s wealthiest man last year. These are the rock stars of China’s corporate world.

The superstar among them, at least for now, is Jack Ma, who hosted the Hangzhou event. Ma, 41, is CEO of , China’s biggest e-commerce empire. His personal wealth reportedly skyrocketed from $65 million to $370 million after Yahoo agreed to invest $1 billion in a 40 percent stake in privately held Alibaba last August, and Alibaba took over Yahoo’s China operations. Ma—known as “Crazy Jack” because of his brash personality and iconoclasm—is emblematic of the new Chinese business leaders who aren’t afraid to break the rules. Ma is making his name in the West as he takes on the China operations of giants such as eBay and Google.

Ma founded in 1999 with $60,000 gathered from 80 investors, as a business-to-business marketplace. Now it provides a platform for more than three million companies around the world. Last year it did $4.5 billion in domestic and international transactions. The Alibaba Group now includes Alipay, the Chinese version of Paypal, as well as Taobao, an online auction site that launched in May 2003 as a challenger to eBay in China. Last year Taobao handled $1 billion in goods and this year is handling $5 million worth of merchandise each day. Taobao is now China’s most used online auction site, largely because it allows users to sell and buy products for free. At the time, eBay sniffed at the formula with the motto that “free is not a business model.” But last December eBay’s China subsidiary said it would begin allowing users to open online shops on its Web site for free—a move widely acknowledged as a vindication for Taobao.

Ma’s deal with Yahoo has been the talk of Beijing. Yahoo’s Yang and Ma first met in 1997, when they traveled together to the Great Wall (at the time Ma worked for the Foreign Trade ministry). Yahoo now has a 40 percent stake in Alibaba, with Japan’s Softbank holding 27.4 percent and Alibaba managers, the rest. Ma has vowed to make Yahoo China the country’s top search engine within three years. He faces an uphill climb. Chinese-language is the undisputed search-engine leader. It snarfed up 46 percent of China’s search-engine market in the first quarter of the year; Yahoo China came in second with 21 percent and Google ranked third with a 13.2 percent. (These estimates come from Beijing-based Internet consultancy Analysys International, but figures vary widely among analysts.) Before the big deal, Ma had been prowling for a search engine to keep his empire in “the marathon race” to stay on top of the Internet game. Since the infusion of cash, he’s merged three search engines under the Yahoo China brand, and beefed up its entertainment component.

Ma is a study in hyper-kinesis, a barely-five-feet-tall whirlwind of sharp wits and elbows. In fluent English he cracks jokes and philosophizes while showing a visitor Alibaba’s trendy headquarters in Hangzhou. The hallways are lined with group photographs of Ma and his colleagues mountain-climbing together, dancing at year-end parties and cavorting at an elaborate Arabian Nights-style masquerade. Ma is big on corporate bonding and fun; last year the firm handed out $150,000 in bonuses (“like the Oscars”) to Alibabites who put on the best music and dance performances at a gala office bash. In one happy photo, Ma is dressed as a Middle-Eastern belly-dancer, replete with golden veil (a pun on the company’s name). Early on, he decided that his company would not indulge in handing out kickbacks, even though the practice is prevalent in the Chinese corporate world. “It’s extremely rare to find a charismatic Chinese CEO like Ma,” agrees Dongming Zhang, an analyst at the Beijing-based telecom consultancy BDA China.

In many ways, Ma’s story sounds like an American success story—and even comes with a bit of the Wild West. Ma, a 1988 graduate of the Hangzhou Teacher’s Institute with a BA in English, got his start as a teacher. He took his first trip to the United States in 1995, on behalf of a friend who was trying to recover some debts from an American associate involved in a highway construction project. For Ma, who was making about $10 a month as a teacher and part-time translator at the time, visiting America was a huge opportunity. He spent much of his savings buying new clothes for the trip and borrowed money from his father.

Ma’s American odyssey brought him to Malibu, Calif., where it took a bizarre twist. His friend’s U.S. associate in Malibu not only refused to pay the debt Ma had come to collect, but Ma says he also tried to persuade Ma to stay on in the United States as a business partner against his will. “At one point he started playing with his handgun,” says Ma. “It was obviously meant as a threat.” After a few days in virtual captivity, his so-called partner took him to Las Vegas, where Ma, by then almost penniless, says he won $600 playing the slot machines. Ma persuaded the American to let him travel on his own to Seattle, and used the Vegas winnings to buy the plane ticket.

Ma says he touched his first computer keyboard on that visit to Seattle. He pulled up the Yahoo search engine and typed in “beer” and “China”; no Chinese breweries popped up. He enlisted the help of friends to make a rough-edged Web site—and by the end of the day had received several e-mails. That first brush with the Web gave Ma the idea to look into “doing this Internet thing” when he returned to China. A decade later, Ma is still doing it, at warp speed.

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