Alibaba’s Former VP Tells How Jack Ma Beat Ebay From A Small China Apartment

Former VP of Alibaba and Director and Producer of Crocodile in the Yangtze: an Insider look at Alibaba.com Porter Erisman knows a thing or two about achieving e-commerce success in China. Joining Alibaba in 2000, he witnessed its ascent from a small startup based out of Jack Ma’s apartment to the largest e-commerce company in the world, which now employs 16,000 staff members.

In his new film, Erisman presents a candid portrait of Ma and his company through a documentary comprised of over 200 hours of archival footage filmed by more than 35 sources between 1995 and 2009. Told from the perspective of “an American fly on a Chinese wall,” the documentary covers the successes and mistakes Alibaba encountered as it rose to what it is today.

Erisman will be in Paris for the French premiere of the film at China Connect on March 6. With one month to go before the event, Laure de Carayon, founder of China Connect, asked him a few questions about his time at Alibaba, his experience working with Jack Ma, and what makes China’s e-commerce market unique.

Laure: How many were you when you joined Alibaba in 2000? And when you left in 2008?

Porter: When I interviewed with Alibaba in March of 2000, there were about 50 employees at the company and it was still working in Jack Ma’s apartment. By the time I joined the company one month later there were about 150 employees at the company and 15 000 when I left in 2008.

Porter

Porter Erisman.

The most thrilling experience was seeing the rapid growth of the websites and the impact they were having on entrepreneurs in China. First, it was exciting to watch the users grow on the site. Then to watch the revenues come in. And finally, to see the growth as the company grew from an apartment into what it is today—a global company with 25,000 employees.

The most challenging times were immediately after the bursting of the Internet bubble. The company had to lay off staff to survive and for a while it looked like the company might run out of money.

I left the company because, after eight years, I was ready to recharge my batteries and take on a new challenge. By the time I left, Alibaba.com had gone public, eBay had withdrawn from China, and there was a wide-open field for Alibaba to forge ahead. It was tough to leave, but being part of a startup company is like running a marathon—you have to give 100 percent all of the time. So I decided, after an amazing experience, to use Crocodile in the Yangtze as a way to bridge my career into a new direction – film.

What best describes Jack Ma ?

I’d describe him as idealistic, optimistic, competitive, innovative, and resilient.  He trained to be a teacher and his first job was as a teacher. So I think he measures his life by how positive an effect he has on the lives of others.

Of your eight years at Alibaba, what were your most memorable moments ?

The first time I saw the team at an Alibaba customer event was one of the most memorable moments. They were a rag-tag team of teachers, English teachers, journalists, and others who had no business background. Although they lacked experience, they had an innocence and idealism that attracted me to the company. When I first met the team, they assumed that, because they had so little experience, they would have to hand over control of the company to “foreign experts” and take a step back.  But over time, the team grew and developed and realized that they were indeed capable of running the company themselves and even do a better job than the so-called “Silicon Valley experts”. And they had the almost crazy idea of building a global internet company from China.

Other highlights include the pain of laying off staff when it looked like the company might not survive, and the joy of seeing the company pull itself into profitability and the enthusiasm of the staff.

How would you define the “Chinese-ness” of Alibaba/China’s e-commerce business, and more globally, what makes China’s internet different from that in the West ?

All products and services need to be local. And more than any other product or service, an internet business needs to be hyper-local, because it is a reflection of the culture, economy and society it is built to serve. In that sense, e-commerce companies should try to reflect and augment the offline way of doing business as much as possible. For example, in China, where people are less likely to trust a stranger to do a transaction online, we integrated chat software into the website so that buyers and sellers could get to know each other before making a transaction. We also made our payment system an escrow-based system, so that buyers and sellers could store their money in the hands of a trusted third party until their deal was consummated. The images and language on Chinese websites also tend to be more human and playful, to reflect the way people use other websites in China.

Tell us a bit about the competition with eBay in China.

When eBay entered the China market, almost no one gave Alibaba a chance. It was a classic David vs. Goliath battle, and we were happy to be the underdog against a well-funded eBay, which was the largest internet company in the world at that time. We found ways to outsmart eBay and use their own strength against them. And, most importantly, we built a better website that fit the local market conditions. Looking back, it seems like a foregone conclusion that Alibaba would win. But at the time, it was regarded as almost an impossibility.

We are now hearing about the superiority of China’s digital innovation: do you agree? Would you agree that there is a growing influence of the Chinese internet abroad?

Yes—I’d actually argue that Chinese internet companies are in many ways more innovative than many of their Western counterparts. They are also much more hungry because they are often coming from much more humble backgrounds and becoming an entrepreneur is a necessity rather than a luxury. While the basic business model for an internet company may be the same as in the west at the outset, the similarities only last for the first week. Things in China move much more quickly and benefit by not being held back by decades of traditional ways of doing business. Before long after launching, the business models are unrecognizable when compared with their western counterparts. I think you’re going to see more and more Western internet companies emulating successful ideas that come from China.

What best illustrates China’s entrepreneurship spirit? What do you think Westerners should pay attention to in regards to China’s extension/ambitions?

I’m biased, but I still think that Alibaba.com (the website) stands out as one of China’s most innovative businesses. First, it is a global business model that is worth billions of dollars now.  Second, it’s truly unique—there is no surviving Western counterpart or comparable, despite the fact that it was launched at a time when there were hundreds of well-funded Western business-to-businesses marketplaces competing with Alibaba. It’s an example of a truly global business model launched from China that competed on the global stage and went on to become the industry leader. I think we’ll so more examples like Alibaba.com in the future.


Laure de Carayon is the founder and organizer of China Connect, the largest gathering of experts on Chinese consumer trends, marketing, digital and mobile in Europe. Follow her on Twitter at @laure2carayon, and receive updates from ChinaConnect at @ChinaConnectEU.

 

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