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Alibaba

Huge opportunities in current adversity, says Jack Ma in final shareholder letter as Alibaba executive chairman

  • Jack Ma says strategic focus in data science, cloud computing, AI and IoT have laid the foundation for Alibaba to effect revolutionary change
PUBLISHED : Tuesday, 30 October, 2018, 11:17pm
UPDATED : Wednesday, 31 October, 2018, 2:11am

Jack Ma, Alibaba Group Holding’s executive chairman, in his final letter to shareholders before stepping down next year, said that the company will find opportunities amid the current “turbulence and instability” of the US-China trade war as the online giant is always planning for the future.

The letter comes less than two months after Ma announced that he would hand over the reins to chief executive Daniel Zhang Yong.

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Ma said in the letter dated Tuesday that the current US-China trade war is the third time in its 19-year history that the company has encountered a “setback in the global economy”, but reiterated that behind such challenging times are “huge opportunities”.

“The only question is how we should pivot. Monumental challenges give rise to monumental opportunities, and Alibaba is well-positioned because we are adept at weathering adversity,” he said.

“We strongly believe that if we innovate to solve problems and create real value in the process, market opportunity and profitability will not escape us.”

The New York-listed company has seen its stock price decline about 27 per cent since the beginning of the year to US$132.28 as of Monday, amid fears of squeezed margins as Alibaba invests heavily in offline retail and as companies begin to feel the impact of the US-China trade war.

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Ma’s comments come as China and US have imposed billions of dollars in tariffs on each other.

US President Donald Trump said on Tuesday that he thinks there will be a “great deal” with China on trade but added that he thought China was “not ready” to make a deal. Trump warned that he is prepared to levy billions of dollars worth of new tariffs if a deal cannot be reached.

Alibaba owns the South China Morning Post.

The company, which started out as an e-commerce firm that built an empire from its consumer marketplaces Taobao and Tmall, has since expanded its business to include cloud computing and has invested heavily in artificial intelligence as well as research and development.

“Our strategic focus in data science, cloud computing, artificial intelligence and the Internet of Things (IoT) have laid the foundation for us to effect revolutionary change,” Ma said.

“We aim to use our technology to create enormous value for the manufacturing, retail and financial sectors.”

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CEO Zhang, who also separately sent out a letter to shareholders on Tuesday, said that Alibaba is “making comprehensive strategic plans to get ready for the coming era of IoT”.

“When households, local communities, work places, commerce infrastructure and cities all become smart and connected, supported by cloud-computing technology, it will dramatically reshape business processes and lifestyles,” Zhang said.

Zhang, who is the mastermind behind Alibaba’s annual November 11 shopping extravaganza, Singles’ Day, also said that the company was confident of attaining its US$1 trillion gross merchandise volume goal by 2020.

“Looking further, we aim to achieve a bigger goal by 2036: serve two billion consumers globally, help 10 million small and medium enterprises to do business on our platform profitably and create 100 million job opportunities during the process,” he said.

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Meanwhile, Ma assured shareholders that even though he is stepping down, he will remain an Alibaba partner, shareholder and founder of the company.

“I will always be happy to engage in any discussion about the company at any time in the future,” he said. “I will forever belong to Alibaba, be grateful to Alibaba and be at Alibaba’s side to support and cheer for the company.”