Alibaba Founder Jack Ma.
That’s because people may be expecting too much from China’s biggest e-commerce company since its IPO, said Ma, who is known for often peppering his speeches with controversial comments.
The warning echoes previous remarks from the billionaire about the challenges facing the company, from employees becoming complacent and stopping innovation to failing to embrace opportunities in the mobile age. Ma is steering Alibaba into new businesses of digital entertainment and health care as it adjusts to post-IPO life as the 10th-largest company by market value, surpassing Coca-Cola Co. and Facebook Inc.
“Even two months before the IPO, people didn’t think we would make money,” Ma said in a speech today at the World Internet Conference in Wuzhen, China. “Now the problem is people think we are too good -- we can do anything. This is the most dangerous moment.”
Alibaba raised a record $25 billion in September’s IPO. Since then, the shares have surged 60 percent and the company’s Singles’ Day promotion on Nov. 11 saw shoppers spend a record 57.1 billion yuan ($9.3 billion) on goods.
“This is Ma’s typical speech style,” said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. “He’s probably worried that his staff will become too complacent, and wants to remind them that the company isn’t as good as what people are expecting it to be.”
Hollywood Hunt
Ma is spearheading Alibaba’s hunt for Hollywood movies and television shows as it expands its video and entertainment content on set-top boxes.Alibaba prefers to invest in specific films rather than in movie studios, a person familiar with the matter said this month. The Hangzhou-based company wants to become a more significant distributor of content by using customer shopping and viewing data to forecast what productions will become hits among Chinese viewers, the person said.
The company is focusing on health and entertainment because China’s biggest troubles in 10 years will be in health and happiness, Ma said today.
Hangzhou-based Alibaba released its first set-top box in collaboration with Wasu Media Holding Co. in September 2013. A month later, it announced another box under the Tmall brand, the name of one of Alibaba’s biggest e-commerce platforms.
Users of Alibaba’s set-top boxes can watch TV channels and high-definition movies, shop online and play games. Alibaba buys rights from studios that control films and TV content to show them online for a fee, often by territory.
Bond Sale
The e-commerce giant is also planning to raise as much as $8 billion as soon as this week in its first U.S. bond sale, people with knowledge of the matter said.The company will use the proceeds to refinance its credit facilities, according to a statement. The bonds will be rated A+, or the fifth highest investment-grade, by Standard & Poor’s and an equivalent A1 by Moody’s Investors Service.
Alibaba already has $11 billion in loans and credit lines, according to data compiled by Bloomberg.
Should Alibaba raise $8 billion, the bond sale would be the largest ever denominated in U.S. dollars in Asia, according to data compiled by Bloomberg.
Ma sees many opportunities for Alibaba around the world and doesn’t want to compete with EBay Inc. and Amazon.com Inc. in the U.S.
Russia, Brazil
“We invest in the future,” Ma said. “Don’t run after money. Money will run after people.”Alibaba already is the top shopping site in Russia and Brazil, markets where it currently has no employees. AliExpress, an Alibaba site for users outside China, has become the No. 1 shopping site in Russia, according to researcher TNS.
The company is also building its online payment system Alipay globally as it tries to process more digital sales for small businesses around the world.
Alipay has 17.9 million active users overseas in more than 100 countries and is accepted by 2,000 merchants overseas, Sabrina Peng, vice president for Alibaba’s finance arm’s international business, said in October.
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