The New Internet Economy: A Chat With Alibaba CTO Wang Jian

1/24/14Follow @bromano

Don’t compare Chinese e-commerce company Alibaba Group to Amazon, eBay, Google, or other U.S. Internet giants. Think bigger. Think Walmart.

Yet even Walmart doesn’t quite capture the scale or nature of Alibaba’s operations. To CTO Wang Jian, who visited Seattle this week, Alibaba provides such a fundamental, all-encompassing service to the modern economy that it’s competing with electricity—at least figuratively.

In the coming year or two, Alibaba is expected to embark on what could be an epically large U.S. public stock offering, which could value the company somewhere north of $150 billion.

Before joining Alibaba, Wang was assistant managing director at Microsoft Research Asia, and a former psychology professor. Now he and other executives are visiting the U.S. to help Americans learn just what Alibaba is and does.

We were informed in advance of our interview that Wang was not here to talk about the IPO, but he did share his thoughts on a wide range of topics, from cloud computing to innovation, freedom, and the Internet in China.

Today, the business-to-business website that former English teacher Jack Ma and 18 others began in a Hangzhou, China, apartment in 1999 has expanded into an Internet conglomerate. Alibaba is an e-commerce company, a big data company, a technology platform company, and, most crucially, Wang says, an innovation company.

The Chinese giant—in which Sunnyvale, CA-based Yahoo (NASDAQ: YHOO) has a 24 percent ownership stake—is actually made up of some 25 discrete businesses, and provides platforms for virtually every permutation of global e-commerce: Companies looking to have their products manufactured can find producers in China and elsewhere on Alibaba.com, an online marketplace that is one of the original businesses, and now has buyers and sellers in 240 countries and regions. Some 20 percent of the buyers are in the United States, and a growing number of U.S. sellers are also using the platform to showcase their products in China. Washington-state cherry growers, for example, are using the company’s platform and Alibaba logistics services to express-ship their freshest Bings and Rainiers directly to Chinese tables.

Alibaba headquarters

Alibaba headquarters

Consumers in China shop for products from international brands on Tmall.com, and they “treasure hunt” on Taobao.com, a consumer-to-consumer marketplace. Meanwhile, AliExpress is Alibaba’s nearly four-year-old marketplace geared for buyers outside of China.

Most of these transactions are carried out over Alipay.com, a payment platform with some 800 million accounts. The company is pushing more airlines and hotels to accept payment over Alipay, catering to the growing ranks of Chinese tourists.

It’s all supported by a technology portfolio including a cloud computing and data management business, mobile operating system, logistics services, search engines, and more. That’s what Wang runs.

The potential IPO is just one of many things that could make the sprawling company a household name in the U.S. In our interview, Wang discussed Alibaba’s contemplation of an expanded research and development presence in the U.S.; its interest in investing in U.S. startups; its ambitions to reach English-speaking customers; and the story of how Jack Ma first saw the Internet, right here in Seattle.

What follows has been condensed and edited for clarity.

Xconomy: What’s the main purpose of your visit?

Wang Jian: As the company grows, we thought it would be better to get to know more and more people around the world, instead of just focusing in China. So a year ago, we decided actually we should have some events in the States. So we did our first in Silicon Valley last October, and so this is our second time. It’s a very general purpose, just to make sure we have a kind of technical forum to get people to know more about Alibaba. Also it’s a good opportunity for us to get to know more people.

X: It’s obviously a company with a broad array of activities. In your interactions with people during these forums, what are some of the bigger misconceptions they have when they think about Alibaba that you’re trying to adjust or correct?

WJ: People would like an analogy like, “Alibaba is like Amazon.” It’s not. … Next Page »

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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