The Curious Case of Jack Ma. What’s Next for the Billionaire?
Jack Ma had mysteriously 'disappeared' for months after Beijing's aggressive crackdown on his business empire.
Jack Ma, the billionaire Chinese entrepreneur and the co-founder of Alibaba Group, has resurfaced after months of being out of the public eye. Ma had mysteriously ‘disappeared’ for months after Beijing’s aggressive crackdown on his business empire.
On Wednesday, Ma appeared over video at an annual event he holds to recognize the work of rural teachers, according to Chinese media. At the event however, Ma made no mention of his disappearance from the public spotlight or his reason for reemerging now.
“Recently, my colleagues and I have been studying and thinking. We made a firmer resolution to devote ourselves to education philanthropy,” Ma said in the video, according to a Bloomberg report. “Working hard for rural revitalization and common prosperity is the responsibility for our generation of businessmen,” he said.
Nonetheless, Ma’s uncharacteristic absence from public life over the past few months sparked questions of whether Beijing was punishing him for being outspoken or if he was just ‘lying low’.
What’s up with the Chinese billionaire?
Ma’s absence from public eye came after he became embroiled in a bitter dispute with Chinese regulators. During an October 24 conference in Shanghai, Ma made critical comments about the state of China’s financial industry, saying that China’s state-backed banks operated like “pawn shops.” This was just a month before Ma’s Ant Group was about to launch the world’s biggest IPO, he went ahead and directly criticized the Chinese government, or the ruling Communist Party.
Beijing struck back by stopping his IPO and even summoned Ma and Ant executives to a meeting. The regulators have also asked for restructuring Ant Group’s business. The development has already cost Ma billions of dollars.
Just a month later, the Chinese government even started an anti-monopoly investigation against Alibaba, the company founded by Jack Ma. It may be noted that Jack Ma is no longer the chairman of Alibaba, but owns a large chunk of share in the company and is part of a core group responsible for selecting the majority of Alibaba’s board members.
Simply put, speaking out of turn seems to have cost Ma, with the Chinese government flexing its muscle to crack down on his businesses over the past few days — something that China’s ruling party has done in the past.
In fact, the Chinese government has a history of cracking down of big personalities. A CNN Business report suggested that the government had earlier turned up the heat on superstar actress Fan Bingbing, who had abruptly gone incognito in 2018 and appeared a year later to apologize for a tax evasion scandal.
Another instance is when real-estate tycoon Ran Zhiqiang suddenly disappeared for several months in 2020 after allegedly criticizing Chinese President Xi Jinping’s handling of the coronavirus pandemic. He was even jailed for 18 years on corruption charges.
Who is Jack Ma?
In this context it would be interesting to know a bit about Jack Ma. Born in 1964 as ‘Ma Yun’ to a humble family in Hangzhou city, Ma struggled hard in his early life when he worked as a guide for foreign tourists in the city. He later graduated in 1988 with a bachelor’s degree in English and started teaching English at a local university where he earned a mere $15 per month.
But as China opened up to entrepreneurs, many individuals like Ma grabbed the opportunity at the height of the global internet revolution. Ma founded the Chinese e-commerce firm, Alibaba, in 1999 as an online platform that initially allowed businesses to sell products to each other online but soon morphed into China’s largest online retail market. Needless to say, almost two decades later, Alibaba is an internet juggernaut and Ma is among the world’s richest men, with a net worth of more than $40 billion, according to the Bloomberg Billionaires Index.
Like Microsoft founder Bill Gates, he has created his own eponymous foundation, the Jack Ma Foundation that focuses on education. Ma has often described himself as something on an accidental entrepreneur. The Alibaba Group, headquartered in his hometown of Hangzhou, includes Tmall.com for business-to-consumer transactions and Taobao, China’s most popular online consumer marketplace, with hundreds of millions of products and services listed.
In 2014, Alibaba officially became one of the largest public offering in history with its IPO valued at $25 billion. That was a wakeup call about an emerging wave of technology giants in China’s state-dominated economy, believe experts. Under the ticker ”BABA” at the New York Stock Exchange, the e-commerce created history, having a market capitalization of roughly $219.8 billion, according to FactSet.
Ma has also being compared with Steve Jobs, owing to his obsession with innovation, charm and spiritualism, has time and again proved his mettle in the online retailing space. For example, it has used instant online micro-loans to grow its vendor base and get around inefficiencies in China’s financial markets. A blog post mentions “On Taobao, you find live scorpions, rental boyfriends or Tibetan Yak testicles and more bizarre…”
The company has now become a player in online payments and films, and it has been pouring investment into an array of ventures, including brick-and-mortar retail, cloud computing, meal delivery and advertising. It owns a stake in China’s hugely popular Twitter-like Weibo platform, and in 2015 it started the South China Morning Post newspaper. The company has transformed how Chinese people shop and pay – through its popular Alipay digital payment service.
“He put a human face on technology, and took China onto the global stage, not as a state-owned enterprise, crucially,” said Duncan Clark, managing director at Beijing tech advisory BDA and author of Alibaba: The House that Jack Built.
Ma stepped down as Alibaba’s chairman in 2019, handing the role over to the company’s current CEO, Daniel Zhang. But even though he stepped down from corporate positions and earnings calls, he retains significant influence over Alibaba and Ant and promotes them globally at business and political events. He also continues to mentor management talent in the “Alibaba Partnership”, a 35-member group of company managers.
What’s Next with Jack Ma?
After a surge in Alibaba’s Hong Kong-listed shares on January 20, the market valuation rose by $58 billion, Bloomberg reported.
Despite the company’s surge in market value, Ma’s standing with Beijing remains unclear. As of early December, the man most closely identified with the meteoric rise of China Inc. was advised by the government to stay in the country, a person familiar with the matter has said
“There’s still a lot of uncertainty on regulators’ next moves, but this does mean the status of Jack Ma is much better than a lot of people speculated,” Fang Kecheng, a professor at the Chinese University of Hong Kong told Bloomberg. In fact, the Chinese government’s regulatory action has forced Alibaba-affiliate Ant Group to suspend its plans for a $37 billion initial public offering (IPO).
According to a report in TechCrunch, the People’s Bank of China, the country’s central bank, “summoned Ant Group for regulatory talks on December 26th, announcing a sweeping plan for the fintech firm to ‘rectify’ its regulatory violations”. The banking authority laid out a five-point compliance agenda for Ant Group. The agenda is that Ant Group should return to its roots in payments and bring more transparency to transactions. Ant Group has reported to have established an internal “rectification workforce” to work on all the regulatory requirements.
According to a report in Bloomberg Intelligence, Jack Ma’s live-streamed appearance with rural teachers after keeping out of public view for more than two months may boost market sentiment on Alibaba and alleviate worst-case investor concerns. However, the monopoly probe launched in December by China’s State Administration for Market Regulation is yet to be resolved and may continue to weigh on the company’s future acquisitions and broader business practices.