Book Review-Alibaba-Duncan Clark
I have read many articles and Quora answers to what China is and what China was. But this book and wisdom widened my horizon of china and what lies underneath the gigantic economy. Alibaba, the company, and Jack Ma, legendary founder are the best examples to study to understand it.
The author Duncan Clark, has been living in China for a decade, heads an investment boutique in China, and has also held shares in Alibaba. He is also qualified because he has had direct access to many of the employees including the founder, for this book. China was always the factory for the world, but BABA changed that to cater to rising middle class. Made in China to Bought in China was the new norm. Consumers in US, India, and rest of the world know only about Amazon, but Alibaba is way different from the retailer. Amazon sources most of the products, generic products for profitable service lines, has the guarantee of the consumer since it is backed by Amazon, logistics handling by prime. But Alibaba, lets the sellers talk to consumers directly, and even allows for haggling of prices, relies on third party courier services. It simply acts as an intermediary platform.
The iron triangle of e-commerce, logistics, and finance underpinned Alibaba's success. Unlike Amazon, Tmall and Taobao carry no inventory. He wanted to replicate the vibrancy of china’s markets online. He imagined this all at a time, when internet penetration was low, and rules for companies were highly regulated by the government. China's growth has not been westernized growth, billion population still consume mostly Chinese movie content, order online with Alibaba haggling with sellers, pay it via phone, unlike credit cards in the west. Even rival Amazon has a store on Tmall, selling imported food, shoes, and toys. It does not go with one size fits all approach, has a Groupon style offering, B2B, B2C, C2C market place options for customers.
The humble beginning of the English teacher, and how he capsized opportunities along the way, enthralled the west, and continued to developed Alibaba is detailed in the book. He still does not understand technology but is bold enough to admit it. The cloud ambitions of the company and AI offerings are well known. You do not need to understand tech to leverage it, you just need to sense the pulse of the market and psyche of the consumer. “ Learn from others the tactics and the skills, but don't change your dream”- true words indeed. His love for Chinese folk stories is sprinkled through the culture.
Single’s day celebration and record sales are well known. Its employees have also created more than 317 startups to date. Long march culture, where the huge investment of personnel and time is the hallmark of Alibaba. His English eloquence being a teacher comes in for huge appreciation, enticing crowds. He has been a mascot for the company, delivering lectures in English, talking like a teacher since he is one. All this has generated huge fanfare for the company, which other Chinese rivals have been unable to match. Tencent, Baidu are all giants, but the world does not know much about their founders. His Australian foster family fondly called “The Morley Family” is detailed, we can understand how he was relentless and humble in his early days.
China has a million companies that want to sell abroad, but they don't know how-Jack Ma
The beauty of the book lies in tying the ancient origins of the city, local Chinese culture, development of economy, and government controls. If you miss one of them, you miss the story, and Duncan has beautifully built the story in words. There is more China than Beijing or Shanghai. Zhejiang is the birthplace of the company, and the history of war, occupation, and the bustling port all accentuated the progress of the company.
The challenge lied in convincing merchants to embrace the internet when they had not heard of it. Even if you convince them that it is the future, they could not see what they paid for, since the internet was so limited in these provinces. Alibaba is an unconventional name for a Chinese company, it is Arabic, it was done since he believed in folklore and open sesame stories. Also, it came out on top of the alphabet. There were other companies like Sina, Sohu, Net ease cropping up with a different business model and backing of VC firms, ready to knock it off. Goldman Sachs and Softbank both firms backed BABA, and this helped it grow and more importantly survive during bust cycles.
Connecting suppliers in china with a global customer base were the idea. Most of the companies founded were by US-educated Chinese who wanted to replicate their western education methodologies in China. Some of them were successful but Jack Ma was different, he grew in china, and understood china better than anyone else. He proudly calls his company as the land of 1001 mistakes. SARS outbreak in 2003 and eBay China jitters all were important milestones. Reading the book is like leafing through pages of history, for Duncan knows the knack of the market and news.
Duncan marries both journalistic skills and storytelling skills into good use.
Yahoo, eBay both global giants had to bite the dust in China, and this book explains why and how. Not just BABA, but the tiny stories of Tencent, and Baidu are also detailed.
Explaining about a lone tree in the forest makes no sense, you got to explain the forest as well.
IPO plans, his growing ambitions of global domination, reduced investment stakes, stepping aside of the company, growing investment, and philanthropy arm are all in there. This book is a must-read for anyone who wants to know the market and technology landscape of China since 1999. Cultural understanding of the market is very crucial in knowing a country, and this book shall serve as a primer for the same.
Thanks to my dear friend CHANDRASEKAR M for gifting this book, indebted forever.