by Duncan Clark
Chapter One: The Iron Triangle
1.Some caution should be exercised in assessing the final volume, given that some goods might be returned for full refunds the next day by customers—mostly for legitimate reasons, such as being damaged in shipping or customers changing their minds—and the practice by some merchants on the platform of inflating their own sales by hiring third parties to boost their rankings (a phenomenon known as “brushing,” which is discussed in Chapter 12).
2.Originating as Bachelors’ Day in the early 1990s when single students launched an “anti–Valentine’s Day,” the date 11/11 was chosen to symbolize single people.
3.For Alibaba’s “business-to-consumer” website www.tmall.com.
4.A term copyrighted by Alibaba in 2012 to distinguish its own festival from the earlier common name for the festival of “baresticks holiday” (guanggun jie), chosen for the resemblance of 11/11 to two pairs of chopsticks.
5.In a TV interview with Emily Chang of Bloomberg West on Bloomberg TV.
6.The phrase echoes the Chinese saying “wanneng de shangdi,” which describes an omnipotent God.
7.The original meaning of the character “tao”—to pan for gold—had fallen into obscurity.
8.Tmall carries some inventory in selected categories such as Tmall Supermarket.
9.True to Jack’s passion for Chinese tradition, the name is an ancient term for servants.
10.The unfortunately named in English ali wangwang.
11.First launched in 2008 as Taobao Mall, it later became tmall.com.
12.Tmall also charges an annual fee.
13.In fiscal year 2015.
14.Offering a limited selection of items, mostly at entry-level prices.
15.Groupon itself entered China in 2011, but quickly ran into trouble and failed to gain traction.
16.Translates as “Super Good Deal.”
17.Twenty-eight square feet per capita in the United States, 16 in Germany, and 14 in the United Kingdom.
18.In 2009.
19.The list details marketplaces that reportedly “engage in and facilitate substantial copyright piracy and trademark counterfeiting.”
20.Including hiring its former general counsel.
21.Founded in Shenzhen in 1993 and sometimes described as the “FedEx of China.”
22.The word cainiao originates in Taiwan and literally means “green bird,” but it also has a military connotation, meaning “rookie soldier.”
23.Via 1,800 distribution centers and 97,000 delivery stations.
24.The company itself is registered in Shenzhen.
25.Shen, a close friend of Jack Ma, built his fortune in the China Yintai Group, a mining, retail, and real estate concern that includes the sixty-six-story Yin Tai tower in Beijing, which houses the city’s Park Hyatt hotel, where Shen has regularly hosted Jack for social events. Shen also controls a Hong Kong–listed retail subsidiary called InTime Department Stores, in which Alibaba has invested $700 million.
26.A local network of couriers in first- to third-tier cities, supplemented in less dense, and underdeveloped areas by more than 20,000 “self pickup” stations.
27.A nationwide logistics network.
28.JD is short for Jing Dong, with Jing the word for “capital,” as in Beijing, and Dong the character for “East,” but also derived from the given name of the company’s founder, Liu Qiangdong, known in English as Richard Liu. Liu founded his company in 1998 as a disk drive company, then in 2004 launched a B2C website called 360buy.com, which he later rebranded JD.com.
29.1.5 million square meters in total compared to Cainiao’s one million.
30.For orders placed by 11 A.M. and next day for orders placed by 11 P.M.
31.$778 billion in the year to June 2014.
32.A story explored in Chapter 11.
33.In 2014 it generated 11 billion yuan ($1.8 billion) in revenues.
34.Managed by brokerage Tian Hong Asset Management, which Ant Financial had recently purchased.
35.Via Ant Financial.
36.In 2013, Jack Ma teamed up with two other Mas (although they are unrelated): Pony Ma, Jack’s friend and CEO of Alibaba rival Tencent, and Ma Mingzhe, the chairman of Ping An Insurance. Together they launched China’s first and largest online insurer, Zhong An, signing up more than 150 million customers within a year.
37.The system checks the faces of prospective customers against police databases, although this has led to delays in the service’s rollout due to concerns by regulators.
Chapter Two: Jack Magic
1.The Club Med–owning chairman of Fosun Group.
2.In a conversation with the journalist Charlie Rose.
3.Jan “Jens” Van der Ven.
4.A stand-up comedian in Shanghai reportedly sources some of his material from Jack’s speeches.
5.Rivals like Baidu rely more on telesales.
6.To the China Daily, May 11, 2015.
7.Selected examples include: Chen Qi is the founder of juandou.com and mogujie.com, was a product manager at Taobao, and worked on UED (user experience design). Among Mogujie’s four founding team members, three came from Taobao. Apart from Chen Qi, the other two are Mogujie’s CTO Yue Xuqiang and CMO Li Yanzhu. Chen Xi is the founder of LavaRadio, an ambient music radio station, worked at Yahoo, and left about a year after Alibaba acquired Yahoo China. Cheng Wei is the cofounder of Didi Dache and worked at Taobao’s B2C unit. Gu Dayu is the founder and CEO of www.bong.cn, a smart sports bracelet, and worked at Alibaba’s International User Experience unit, Laiwang, and YunOS. Jiang Haibing was Alipay’s second employee and is the founder of mabole.com, an online merchant recruitment service company. Lai Jie is the founder of Treebear, a commercial Wi-Fi provider. Alibaba led Treebear’s Series A round in August 2014, taking a 10 percent stake. Lan Lan is the founder and CEO of 1kf.com, an O2O service platform to find physical therapists and masseurs, which was launched in March 2015. Li Liheng is the cofounder and CEO of chemayi.com, a localized auto/life-service platform. Li worked at Alibaba for eight years starting in 2002. The other two cofounders of chemayi.com are also Alibaba veterans, Lin Yan and Fan Qinglin. Li Zhiguo, the main developer of TrustPass, left Alibaba in 2004 to found koubei.com, a classified listing and community website. Alibaba invested in koubei.com in October 2006 and acquired the company in 2008, merging it into Yahoo China. Li, whose nickname was “Bug Li” at Alibaba, moved to AliCloud in February 2009 before quitting Alibaba again in September 2010. He then became an angel investor and is now CEO of wacai.com, an online financial management platform. Toto Sun (Sun Tongyu) is the former president of Taobao and cofounder of www.hezi.com, a virtual entertainment and education community for kids ages six to fourteen and their parents. Wang Hao is the cofounder and CEO of xiaom.com, a music streaming site. Xiaom was acquired by Alibaba in 2013, becoming part of AliMusic. David Wei (Wei Zhe) is the cofounder of Vision Knight Capital. Xu Ji is the founder and CEO of mangguoyisheng.com, an app for community doctors. Xu was Alibaba’s seventy-second employee. Wu Zhixiang is the founder and CEO of ly.com, a travel-booking website. Wu worked in Alibaba’s sales department for a year from 2001 to 2002. Ye Jinwu is the founder and CEO of yingyinglicai.com, a financial product purchasing app and worked at Alipay. Zhang Dou is the founder and CEO of yinyuetai.com. Zhang Hang is the cofounder of Didi Dache. Zhang Lianglun is the cofounder and CEO of mizhe.com and founder of BeiBei, a maternal and infant product e-commerce site. Zhou Kaicheng is the cofounder and CEO of Xingkong Qinang (www.xkqh.com), an O2O piano class service platform. David Wei’s Vision Knight Capital participated in its Series C funding in October 2015. Zhu Ning is the founder of youzan.com, a platform to open WeChat stores, cofounder of guang.com, an e-commerce site (already closed), cofounder of cafebeta.com, and worked as chief product designer at Alipay.
8.itjuzi.com.
Chapter Three: From Student to Teacher
1.A “baozhang.”
2.The work involves five elements: taolu (solo hand and weapons routines/forms), nei
gong and qigong (breathing, movement and awareness exercises, and meditation), tuishou (response drills), and sanshou (self-defense techniques).
3.“Benke.”
4.“Zhuanke.”
5.Although he probably coined the phrase much earlier.
Chapter Four: Hope and Coming to America
1.Classified as getihu (literally “single body units”) or individual businesses, and siying qiye, or privately owned businesses.
2.Formerly named Lin’an, it was the capital of the Southern Song dynasty from 1138 to 1276. In the thirteenth century, when Europe was in the Dark Ages, Hangzhou is thought to have been the most populous city on earth, with more than one and a half million inhabitants. Marco Polo and famous Arab adventurer Ibn Battuta are both believed to have visited the city.
3.China Post only guaranteed delivery in three days, but exporters needed to get shipping forms to the port overnight. By taking the midnight train from Hangzhou, Nie delivered the forms in time, charging multiple exporters 100 yuan for each form but paying only once the 30 yuan needed for the train ticket.
4.Yunda, YTO, and ZTO.
5.As the Communist Party appointed both the senior bank officials and the senior executives of the SOEs, for better or worse there was no need for independent credit assessments and controls.
6.By the late 1990s Hong Kong and other overseas Chinese entrepreneurs had set up more than 50,000 factories in Guangdong Province, which has links to a diaspora of overseas Chinese numbering 20 million people. After Deng Xiaoping’s southern tour, which established a number of special economic zones, including Shenzhen, the overseas Chinese, including many rich entrepreneurs, provided a ready supply of financing and export markets. Guangdong’s location, adjacent to Hong Kong, and the world’s busiest shipping routes gave it a further edge over Zhejiang.
7.Written by journalist Zhou Jishan.
8.According to a September 1995 article in Hangzhou Daily.
Chapter Five: China Is Coming On
1.One of Jack’s early cards lists him as “marketing director.”
2.Starting in the late 1980s, Dr. Walter Toki at the Stanford Linear Accelerator Center played an instrumental role, after he reached out to the Chinese-born American physicist and Nobel Prize laureate T. D. Lee about establishing an Internet connection with scientists in China.
3.Via a satellite uplink from an AT&T ground station at Point Reyes, California.
4.In its first edition.
5.Called the “Golden Dove Project.”
6.John Nathan Hosteller, a Republican member of the House of Representatives from Indiana, and Democratic senator Bill Bradley of New Jersey.
7.The Qianjiang Evening News.
8.A sample listing from the site illustrates its simple nature: “Hydrofluoric acid with different concentrations packed in plastic drums of 25kgs” accompanied by the contact information for the Ningbo Material General Corporation.
9.Including a Hangzhou Daily article that appeared on October 18, 1996.
Chapter Six: Bubble and Birth
1.To The Economist.
2.CIECC had been established two years earlier to pursue “EDI” (Electronic Data Interchange) projects for MOFTEC.
3.She would later become chair, CEO, and Communist Party secretary of Chinese state-owned telecom manufacturer Putian. There she would actively promote China’s own standard for 3G mobile telephony, called TD-SCDMA, which failed to gain market acceptance.
4.Jasmine Zhang from Yinghaiwei asserts that Jack chose the name because it sounded like Ariba.com, another high-profile e-commerce website at the time.
5.Both domain names were registered under Jack Ma’s mother, Cui Wencai. On August 17, 1999, Cui transferred the ownership to Alibaba Ltd.
6.Alibaba.com was launched in April 1999, replacing the earlier alibabaonline.com and alibabaonline.com sites that had gone online in January. The company would later describe the site as a “trial” when unveiling an upgraded site at a formal launch ceremony the following October.
7.At China Pages, Jack had been joined by his wife, Cathy, Toto Sun (Sun Tongyu), Wu Yongming, James Sheng (Sheng Yifei), Ma Changwei, Lou Wensheng, and Simon Xie (Xie Shihuang), who had met Jack when working for Dife. Others from Hangzhou who had joined him in Beijing included Lucy Peng (Peng Lei, who quit her job as a teacher in Hangzhou when she married Toto Sun), Han Min, Jane Jiang (Jiang Fang), Trudy Dai (Dai Shan), and Zhou Yuehong.
8.For forty hours of access from ChinaNet.
9.Nearly all of the advertisers were technology firms, such as Intel, IBM, Compaq, Microsoft, Legend, and Founder.
10.Or “New Wave” (xin lang in Chinese).
11.Jack Hong, Benjamin Tsiang, and Hurst Lin. Sinanet had some users in Taiwan but struggled to make headway in China, and was blocked at times by the Chinese government.
12.From Dow Jones, Intel, and Morningside, an affiliate of the Hong Kong property developer Hang Lung run by Gerald Chen.
13.Only Raymond Lei had studied overseas, at Purdue University in Indiana, where he received a master’s degree in computer science.
14.Xiao Ao Jiang Hu in Chinese.
15.According to Chen Xiaoping, a professor at the University of Washington in Seattle.
16.Cai Chongxin, or in Taiwanese romanization, Tsai Chung-Hsin.
17.His father, Dr. Paul Tsai, is the founder of the Tsar & Tsai Law Firm, whose origins in 1965 make it one of the oldest partnership law firms in Taiwan.
18.Alumni include the playwright Thornton Wilder (Our Town), the former CEO of Walt Disney Michael Eisner, the singer Huey Lewis, former White House press secretary Jay Carney, and most recently Song Andong, the first Chinese player drafted by the NHL. Joe is now a trustee of the school.
19.His ancestral home was Huzhou, near Hangzhou.
20.In 1996, Joe married Clara Wu, a Stanford- and Harvard-educated professional born to Taiwanese parents in Kansas.
21.Galeazzo Scarampi, chief executive of Investor Asia Ltd.
22.As one shareholder, Raymond Lei, had left the company the eighteenth slot was available for him. Eighteen is a lucky number in China, but Joe decided to leave it vacant, and he became employee No. 19. “Nineteen has always been my lucky number. My lacrosse jersey number was nineteen. I was born on January nineteenth.”
23.A Cayman Islands company registered in June 1999 called Alibaba Group Holding Limited.
24.Joel Kellman at Fenwick & West helped set up some meetings.
25.The name “8848” was chosen because it represented the height of Mount Everest in meters.
26.Touting the first foreign-held license to operate Internet services in China.
27.He also wrote the seminal 2004 article, which later became a book, about the “long tail” as it applies to retailing online.
28.After receiving an MBA from Wharton, Yip had built up and sold a systems integration company in the United States before moving to Hong Kong and joining CIC.
29.These had been registered by a Hong Kong–born, UCLA computer science graduate named James Chu.
30.Despite Xinhua’s backing, his site china.com was repeatedly blocked in China by rival agencies.
Chapter Seven: Backers: Goldman and SoftBank
1.Ted and I took turns writing the “Beijing Byte” column about tech developments in China, taking over from Kristie Lu Stout, who is now an anchor at CNN International in Hong Kong.
2.The initial wave of foreign employees included a number of young China adventurers. One of the earliest, employee number forty, was David Oliver, who grew up on a farm on the South Island of New Zealand and had been working in China for a few years. After he saw Jack give a speech in Singapore in March 1999, David was so impressed that he flew to Hangzhou, and by September he had started working for Alibaba. He joined the company at a very low salary by Hong Kong standards—$20,000 a year—so low that he was later unable to afford to exercise his healthy allocation of options, priced at a mere five cents. Belgian Jan Van der Ven joined the company afte
r building a number of trade websites in Shenzhen before moving to the factory town of Dongguan, Guangdong. Another early recruit, number fifty-two, was Brian Wong. Originally from Palo Alto, California, Brian is now a vice president in the chairman’s office, constantly at Jack’s side on his frequent trips overseas. Alibaba then added a tier of MBAs including Todd Daum and Sanjay Varma. Alibaba organizes occasional gatherings of the earliest employees, issuing hats displaying the order of precedence of joining. (Jack is #001.)
3.Jack’s wife, Cathy, played an instrumental role in the international operations of the company for a number of years. Annie Xu, a UC Berkeley grad from Shanghai, has worked as general manager for Alibaba in the United States since May 2000. Abir Oreibi oversaw the company’s European business for eight years from 2000.
4.“Pre-money.”
5.Involving a “participated preferred feature.”
6.She was a member of the bank’s principal investment area (PIA) team launched in Asia by Henry Cornell. In addition to large investments in China such as in Ping An Insurance in 1994, after the bank had made some successful tech investments in Silicon Valley, Shirley was involved in placing small bets on tech companies in Asia, too. Shirley was named managing director at the bank the following year, at age thirty-two.
7.Investing in a company called ChinaRen.com, founded by three Stanford returnees. ChinaRen was later acquired by Sohu.
8.In 2015 he became the comanager of Joe Tsai’s multibillion-dollar family investment office.
9.Adding to the company’s existing Taiwan and Hong Kong sites.
10.Here at the company’s tenth anniversary.
11.At Alibaba, Aliren (literally “Alibaba People”) are employees who have stayed with the company for over three years.
12.Initially alibaba.com.cn, in 2010 becoming 1688.com.
13.Asia Business Conference.
14.In a 2003 interview with Zhejiang Satellite TV, he said, “Ten years ago I applied for Harvard twice and was rejected. I always wanted to go to Harvard and talk to the people there. . . . Until today I don’t care too much about the academic qualifications from elite universities around the world. I think Hangzhou Teachers College is pretty good.”