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China tech

China tech trailblazer Jack Ma passes $460bn torch at Alibaba

Successor Daniel Zhang to expand B2B and cloud to complement e-commerce

SHANGHAI/NEW YORK -- Two decades after launching his company in an apartment with 17 colleagues and students, the English teacher-turned-entrepreneur Jack Ma Yun has stepped down as chairman of Alibaba Group Holding after building an empire worth $460 billion and reshaping China's consumer landscape through technological innovation.

Ma announced his retirement on Sept. 10 during Alibaba's 20th anniversary celebration at a stadium in its home city of Hangzhou. Speaking before roughly 60,000 attendees, Ma said he had been preparing for this moment for a decade, including finding a successor.

That role falls to CEO Daniel Zhang Yong. Though Ma retains a seat on Alibaba's board, he is expected to leave it once his term ends in July 2020. Ma, who is China's richest man -- worth $34.6 billion according to Forbes -- says he plans to return to education and focus on charitable work.

The departing leader said the theme of the handover on Sept. 10 was "not Jack Ma's retirement, but the onset of a system's succession."

Zhang, who took the reins as CEO in 2015, is known as the mastermind behind many of Alibaba's creations including its Singles Day shopping festival. Before joining Alibaba, Zhang served as chief financial officer of video gaming company Shanda Interactive Entertainment, after a stint as an accountant at PwC.

In a video interview published by Alibaba in December, Zhang laid out his vision for the company's next decade.

Much work lies ahead "to help enterprises streamline their business and improve efficiency with the power of digital technology, and to make social and public service smarter," Zhang said.

"This is what I think Alibaba will devote itself to over the next 10 years: to provide the kinds of business infrastructure needed to make doing business in the digital economy era easier and facilitate whole industries," he said.

This evolution already can be observed in the rapid growth of Alibaba's enterprise-facing business segments in recent years, including cloud services.

It also echoes the broader trend of the Chinese tech world turning toward business-to-business opportunities, as the imminent fading of the country's demographic dividend -- and the consumer potential that came with population growth -- appears to be a common anxiety.

A similar shift can be seen on the American West Coast, where growth from cloud services is lifting shares of Amazon and Microsoft. Among relatively young companies, IPOs this year of enterprise communication tools Slack and Zoom overshadowed those of consumer-focused Uber Technologies and Pinterest.

The leadership change also opens a new chapter in the relationship between Alibaba and SoftBank Group. The Japanese conglomerate, which owns 26% of Alibaba, invested in the company mere months after its founding, and CEO Masayoshi Son shares a close personal bond with Ma.

SoftBank counts on the roughly 13 trillion yen ($121 billion) in unrealized capital gains from its Alibaba investment as a sort of collateral for the group's wide-ranging tech investments.

According to Ma, Alibaba has three goals: lasting for 102 years -- in other words, from the 20th century to the 22nd; providing services to China's small and midsize enterprises; and becoming the world's largest e-commerce company.

Time will tell whether Alibaba reaches the first goal, but the other two have been achieved. The company led the global e-commerce industry in retail gross merchandise volume last fiscal year at 5.73 trillion yuan ($804 billion), surpassing It reported a 37% rise in net profit to a record 87.6 billion yuan for the year through March, with the core e-commerce business still serving as the main growth driver.

Alibaba's valuation has more than doubled to roughly $460 billion since its September 2014 listing on the New York Stock Exchange.

Ma realized the internet's potential early on. During a visit to the U.S. 20 years ago, he asserted that information technology would change the world.

Now Alibaba sells everything consumers need for daily life and more, and can even deliver it within a day in many areas. Its 670-million-strong domestic user base is a sign of modern China's affluence.

And Alibaba unit Ant Financial's Alipay mobile payment service, which boasts more than 1 billion users worldwide, helped usher in China's cashless revolution.

At the event on Sept. 10, Ma said that "Alibaba's future lies not in proving we can rake in 102 years of profits, but in proving we are willing to shoulder 102 years of responsibility."

Later, Ma and Zhang took to the stage together, dressed in studded leather jackets, to co-perform songs including "You Raise Me Up" as part of the celebration.

Ma, meanwhile, essentially leaves unsolved the question of how to continue expanding the company while working with a Chinese government that is tightening its grip on the private sector. Alibaba has garnered generous support from Beijing, but at the cost of forcing Ma to toe the Communist Party line in his public remarks.

Keeping the government at arm's length is a challenge shared by the younger tech businesses like Bytedance, operator of popular short video app TikTok, that have sprung up in Alibaba's wake.

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