Small goes big with Jack Ma

28 January 2015 - 08:39 By David Shapiro
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DAVID SHAPIRO: Deputy chairman of Sasfin Securities
DAVID SHAPIRO: Deputy chairman of Sasfin Securities
Image: SUPPLIED

I've never had the urge to attend the World Economic Forum's annual meeting in Davos.

No doubt my sentiments have been swayed by the knowledge that I am not a member of the local business elite, prominent enough to earn an invitation to this high-ranking talk-fest.

Even so, I would find it taxing justifying the stiff entry fee and travel costs to my firm's management and shareholders. Besides, I am not good at deliberating noble causes, like poverty alleviation, income disparities and carbon emissions, especially at a venue where the daily tariff for a hotel room could probably sustain a homeless family for a month.

I wouldn't be comfortable at a lavish cocktail party hosted by our president at which he pitches for outside investment when lights at power stations back home are tripping, or when he warmly embraces his brothers from Africa while his supporters in Soweto are beating foreign shop-owners.

Sitting in my office in Johannesburg, I enjoyed the international TV coverage of the event, particularly from Bloomberg TV's UK and US teams. Their interviews unlocked revealing insights from some of the world's foremost business, financial and political personalities.

Among the issues discussed, I was struck by bankers' perceptions that the onerous regulatory rules enforced after the financial crisis constrained credit channels, counteracting the purpose of stimulatory monetary measures, like those launched last week by the European Central Bank, intended to push heaps of cash into the banking system for onward lending to businesses and households.

The highlight of my viewing was Charlie Rose's chat with Alibaba CEO Jack Ma. Alibaba is a Chinese e-commerce company that listed on the New York Stock Exchange in September, raising $25-billion, the largest initial public offering in history. Ma is China's richest man with a net worth of $30-billion.

A humble man, Ma approaches life and business with Buffett-like warmth and humour, though, unlike the Sage of Omaha, he did not enjoy a middle-class upbringing. Buffett often comments how grateful he is that he was born in America, accepting that if he had been raised in Bangladesh or any other poor nation he would never have achieved his success.

Ma was born in 1964 in Hangzhou, China at the end of the Cultural Revolution. He failed school and university entrance exams, including 10 attempts to study at Harvard, was rejected by the police force and rebuffed when he applied for a job at KFC.

Richard Nixon's visit to Hangzhou in the 1970s sparked a tourist boom in Zhejiang Province. For nine years Ma rode his bicycle to a popular hotel, offering his services - free - as a tourist guide. It taught him to speak English, and communicating with visitors opened his mind to new thoughts and ideas.

Ma was introduced to the wonders of the internet on a visit to Seattle in the US in 1995.

Without major retail chains in China, Ma developed the notion of creating an avenue that would allow small businesses to sell their products to customers on the mainland and in other countries.

Initially he struggled to raise the capital to fund his business and in the beginning shoppers merely shared info on his site. His breakthrough came with the introduction of Alipay, an online payment platform.

Today 100 million customers shop daily on Alibaba, buying products from millions of small and medium-size corporations around the world. Ma believes that, in 10 years' time, Alibaba will serve more than 2 billion consumers. Unlike Wal-Mart, which expands by building stores, Alibaba grows by adding servers.

Ma's presence at Davos was to reassure the young, inspiring them not to lose hope. If he could overcome so many obstacles on his road to success, nothing is impossible.

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