What next for China's Alibaba as Jack Ma steps down?

Alibaba.com Alibaba was one of the earliest entrants into the Chinese online sector and has benefited hugely from its growth

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For many in China, life just wouldn't be the same without Taobao, the country's largest online shopping platform.

"I spend four to five hours on Taobao every day," says Pan Li, a mother who lives in Beijing. "It's cheap and I can find things there that I can't find anywhere else."

Meanwhile, 1,200km (750 miles) further south, a salesman in the eastern city of Suzhou relies on a different website, Alibaba.com, to reach international buyers for his company's line of nuts and bolts.

"The first year we started using Alibaba, our sales multiplied two or three times," says Zhang Juyin, from the Suzhou Labour Protection Appliance Company. "Without Alibaba, we would need more staff to achieve the same turnover."

Both Taobao and Alibaba are owned by China's e-commerce giant, Alibaba Group, a private company based in the eastern city of Hangzhou.

By connecting Chinese sellers with online buyers, Alibaba's founder and chief executive, Jack Ma, helped elevate China to become the world's factory, says Li Wei, a professor of economics at the Cheung Kong Graduate School of Business in Beijing.

"His platform is a win-win for everyone involved," Mr Li says. "When Alibaba is successful, behind Alibaba are millions of people, tens of millions of people who are successful, and millions of businesses. There's a huge networking effect."

With annual revenues of $1.1bn (£707m), many investors are already salivating at the prospect of Alibaba's highly anticipated share sale, which could be as early as this year.

Young leader
Jack Ma Mr Ma has overseen the success of Alibaba but now wants to hand over the day-to-day operations to a younger generation of leaders

But some are worried about the company's future after Jack Ma retires as chief executive this week.

Mr Ma made a surprise announcement in January that he would move into a role as Alibaba's executive chairman, arguing the internet company would benefit from being run by a younger person. Mr Ma is 48.

His successors inherit a busy agenda. Alibaba recently invested $586m in Sina Weibo, the biggest of China's Twitter-like micro-blogging platforms.

It's believed that Alibaba's e-commerce businesses will attempt to capitalise on Weibo's social-networking power, though some doubt the plan will work.

Start Quote

I believe that doing what makes oneself happy, staying within one's own limits and being a good partner to one's more capable colleagues, is the right thing for me to do”

End Quote Jack Ma Alibaba

One may want to share shopping tips with Facebook friends, but anonymous Weibo followers would not have quite the same appeal.

Alibaba is also branching into mobile software. In 2011, the company unveiled Aliyun, a mobile platform that could rival Google Android in China.

Earlier this year, Aliyun Search made its debut. It's a consumer search platform that might eventually compete with Baidu, China's largest internet search engine, if it successfully uses consumer data culled from Taobao.

Even without these new products, Alibaba Group is busy guarding its territory within China, the world's largest e-commerce sector, as Mr Li explains.

"The competition is going to be very intense, but like in the United States, there is definitely a networking effect," he says. "If you become a dominant player, more people will find it easier to do business with you."

Steady course

So, what's next for Jack Ma?

"I believe that doing what makes oneself happy, staying within one's own limits and being a good partner to one's more capable colleagues is the right thing for me to do," Mr Ma wrote in an open letter to his employees.

Alibaba insists that Mr Ma's role will not change much, even after he moves into his new job as executive chairman of Alibaba, focusing on the company's long-term strategy. He has always functioned as Alibaba's visionary founder and will continue to work in that role.

That's good news for Pan Li, the mother who buys everything online.

"If Taobao ever closed, it would have a dramatic effect on me," she says. "I would explode!"

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