Behind Alibaba IPO is unlikely China success story

Published on NewsOK Modified: May 7, 2014 at 11:48 am •  Published: May 7, 2014
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HONG KONG (AP) — The mammoth IPO planned by e-commerce giant Alibaba Group highlights founder Jack Ma's improbable rise to China's entrepreneur-in-chief.

Ma, a former English teacher who flunked his college entrance exam twice, founded Alibaba in his apartment in 1999 with 17 friends and $60,000 they had raised. Charismatic by the gray standards of Chinese CEOs, the impish Ma has cult status in China, where he's seen as the equivalent of Steve Jobs, Jeff Bezos or Bill Gates.

In a country where state-owned enterprises dominate business and many owe their wealth to Communist Party ties, Ma stands out for his huge self-made success. Alibaba, which started as a site to link Chinese manufacturers with buyers overseas, became under Ma an e-commerce behemoth that is now expanding into banking, digital maps and online video.

The paperwork for Alibaba's initial public offering says it will raise at least $1 billion from the U.S. listing, but finance professionals believe that is a conservative notional figure to get the IPO process rolling. Estimates for the amount that could be raised have ranged from $10 billion to $20 billion. The price at which shares are sold might give Alibaba a market valuation of $200 billion, which is greater than Facebook.

Ma, who owns 8.9 percent of the company, is likely to become even wealthier following the IPO. He's already worth $8.4 billion, making him China's fifth-richest person, according to Forbes.

Ma, 49, stepped down as CEO last year, saying in a letter to employees that he's "no longer young for the Internet business." He remains chairman and an important figurehead for the company's 21,000 employees, though he's now focusing on philanthropy and recently established a charitable trust potentially worth billions.

"It would be hard to find a private citizen in China who's had such a big impact on the economy," said Porter Erisman, maker of a documentary about Alibaba and the company's former vice president of marketing. "I look at him as the pied piper of entrepreneurs in China. He created this platform, he pushed China online."

Ma is known as an enthralling speaker with a penchant for puns and slogans who enjoys performing at annual company meetings called Alifests. To mark the company's 10th anniversary in 2009, some 16,000 staff gathered in a stadium at Alibaba's Hangzhou home base were treated to a performance by Ma dressed as a punk rocker.

The entrepreneur may have inherited his knack for showmanship from his parents, who were performers of pingtan, a traditional form of storytelling and balladry that was banned during the violent upheaval of the Cultural Revolution.

As a boy, he was terrible at math but better at English and improved it by volunteering as tour guide in Hangzhou, a picturesque city near Shanghai. He earned an English degree from Hangzhou Teachers' Institute after passing the college exam on the third try. He taught at a local college, then set up his own translation company but moonlighted as a street peddler, hawking flowers, books, flashlights and clothes, to balance the books.