Jack Ma, who co-founded the world’s largest e-commerce platform, is planning a transition out of his role as executive chairman at the $420 billion Alibaba Group to focus on philanthropy and other pursuits the NYT reported.
Ma – China’s richest man according to the Bloomberg billionaire index– will disclose his plans, including a timeline for the transition, on Monday, when the former English teacher turns 54, the WSJ added noting that Ma wants to ensure an orderly transition and plans to remain on the company’s board; he told the New York Times that his retirement was “not the end of an era, but the beginning of one.”
“I sat down with our senior executives 10 years ago, and asked what Alibaba would do without me,” Ma said in an interview with the South China Morning Post, which Alibaba owns. “I’m very proud that Alibaba now has the structure, corporate culture, governance and system for grooming talent that allows me to step away without causing disruption.”
“There are a lot of things I can learn from Bill Gates. I can never be as rich, but one thing I can do better is to retire earlier,” Ma said during an interview last week with Bloomberg Television. “I think some day, and soon, I’ll go back to teaching. This is something I think I can do much better than being CEO of Alibaba.”
Ma, who co-founded Alibaba in 1999, stepped down as chief executive in 2013. He currently serves as the company’s international face at top political and business events. Since handing off his CEO title to Daniel Zhang, Ma has spent 40% of the year travelling the globe to preach about the virtues of globalisation and inter-connectedness, the potential of technology to improve lives, and about philanthropy.
“Jack overseas and at home is the most recognizable symbol of the China internet explosion and more broadly the China consumer boom,” said Duncan Clark, a business consultant in China and author of “Alibaba: The House that Jack Built.” “So you have an iconic figure associated with these two major forces, who plans to relinquish his executive functions.”
Ma’s retirement comes as China’s business environment has soured, with Beijing and state-owned enterprises increasingly playing more interventionist roles with companies and seeking to regulate the industry where Alibaba and main rival Tencent, are battling for consumers.
Under President Xi Jinping, China’s internet industry has grown and become more important, prompting the government to tighten its leash. China’s government has been exerting greater control over technology companies, including through a cybersecurity law adopted last year. The clampdown has largely affected content-driven companies.
“His retirement will be interpreted as frustration or concern whether he likes it or not”, Clark said.
The Chinese economy is also facing slowing growth and increasing debt, and the country is embroiled in an escalating trade war with the United States. Growing trade tensions and hurdles for Chinese companies in offshore M&A are presenting a new challenge for Chinese tech firms, especially those like Alibaba which are rapidly expanding overseas. Earlier this year, regulators blocked a $1.2 billion bid for money transfer service Moneygram International Inc by Ant Financial on national security grounds, which the company said was related to “geopolitical” changes.
Ma’s decision also comes as U.S. police investigate an allegation of rape against Richard Liu, the head of e-commerce rival JD.com, which has hammered its shares. The incident spooked investors as the company had no clear succession plan.
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Succession planning for a company barely out of its teens underscores its founders’ commitment of handing down a corporate structure that can outlast them. That contrasts with the tycoons of Asia, where 85% of billionaires face a shift from first-generation founders to their successors, according to a 2016 UBS report that tracked 1,400 billionaires over 20 years.
And yet, while Ma’s plan to gradually step back is a milestone, analysts and industry professionals said it was unlikely his involvement would change significantly: “I don’t think it means that much, frankly. He stepped back from the CEO role about four or five years ago and very specifically made a comment about wanting the younger people to lead the company,” said Kevin Carter, founder of The Emerging Markets Internet exchange-trade fund.
Ma oversees a number of charitable projects in education and environmental fields. He is a cult figure in China’s internet industry and has attracted a big following among entrepreneurs and in pop culture. At events, he is often met with screaming fans.
Alibaba was founded by 18 people led by Ma. China’s biggest e-commerce firm, it now has more than 66,000 full-time employees, the company’s latest annual filing showed. The company had a market value of about $420 billion as of Friday. Ma also controls Ant Financial, which was valued at about $150 billion after a recent fundraising round.