tv Duncan Clark on Alibaba CSPAN August 30, 2016 8:59pm-10:02pm EDT
>> digest curtis martin new phenomena book that talks about a the revenue -- read the silence of michael angelo and all of the tumultuous events of a major opportunity and what is happening now there's so much going on in the world. two things can happen we can screw that up or hundreds of years of prosperity. >> is 350 pages i am a voracious and rapid reader so i'm hoping one day my ratings will re-read.
>> isn't there a booklet you are involved with greg. >> i did start the congressional writers caucus trouble sides of the aisle. we do workshops and not authors come in and it is wonderful refreshing group of members. >> i thought i would take a little break so you see the movie set you want to read the book. but i got in treat with net flicks of man in the high castle berger used to read science fiction so these are the things that i just finished up a biography with
a wonderful one on washington. >> a funny saying happened on my way in asking me to chair the platform committee of the rnc. with the republic shin platform but to go back and finish a book that i started why should matter and why we should have the help and he is a fellow member here from utah and i have had that on my shelf for a long time. with the story of the triumph of maturity --
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defense popover to the register we also have a full calendar of events on the web site. a couple quick scenes on protocol please silence or turn off your cellphone.org c-span is here recording but the second thing he has agreed to sign books however we do ask that you purchase of book that is out near the front. also mr. clark has agreed to answer questions and then to come around with the microphone.
to speak clearly with the benefit of everyone. i am pleased to introduce mr. duncan clark and his book "alibaba" the house that jack ma built". when first heard about all the baba in 2014 with the u.s. ipo it turned out that only to be the of largest of any company but the largest in u.s. history . and that is amazing considering we don't really know what alibaba is. party bay, a part amazon part paper out why someone with experience of why he is so valuable because he is the founder and still charming blend dash chairman which is a consultant here based in china and the status is will they to
daniel and an allied of ways that mirrors the chinese economy with insider knowledge to explain that in a way that very few kay and. and enjoyed the talk. [applause] >> i am impressed you committed all that to memory. for those of you to reach out digest did they look around because that is not uh alibaba product suss talk
about the driving internet culture. but obviously there is a book but i want to talk about alibaba is my first book is actually his third company when you look at entrepreneurialism, failure is more interesting than success and jack allow failure but the bookstores with a chapter with alibaba accompanied than jack but then we go back in time for a lot of challenges one of the things that will resonate citizen just uh tiny -- and china story if to be a underestimated for
so to start with three things it isn't the amazon but what we mean by this is with the iconic companies it is not the chinese market say would not expect them to be the equivalent jack did not start off to create the amazon of china but they did try to become the amazon of china that is the height in meters of mount everest but it was the unlucky name for a company and jack to not want to do the company in 1999 because the chinese
market was not mature enough because people did not have enough money they could not ship them reliably when the reasons it is a successful peace all these problems and created the architecture of trust to know the iris commodity other than fresh air is trust anomie that with the people of china but society is developed and separate ways and erratically invent to be broken down and ultimately create a successful trading environment he had to close the loop and so he did with the innovation yes it is
partly like pay paul wicked is better than those in the u.s. by steadied innovation in people think of that year recap moment like the label if it is incremental and that is what jack has done. he is the entrepreneur and entrepreneur. so is the of book we talk about how he saw as the of problems it is only those three things to become very prominent to take on ebay and defeated them.
mcginnis the book's center has a left-of-center origin i am most became an evil capitalist with the stock options to work with him several years and was given the right in 2003 pdf that is a $30 million mistake so this gives me street crash. [laughter] i had the opportunity but the fact is i underestimated jack. i will not do that again. but this problem is so difficult nobody can resist the huge company coming and. but with ebay basically if
you were not borne back then we had uh crisis and they survived reasonably well done and there was the presumption but jack outsmarted them so the origins of his iconic status because he took on and defeated the big ad international american company. and famously people talk about the crocodile. but he is the machine. and it took awhile. and it is light a comedian.
this endeavor early is a stand-up is a reservoir. so we can just pick one at random but those are good ones but everybody thinks there is of great danger of opportunity here and there. slam trying to make fortune cookies. so maybe there is a joint venture but he always has this type of job but going back into more detail but it is more about jack with this book is interesting i have known him again and i have worked with him but rarely before that i heard lots of things and i heard his story .
and to do research with the dow jones search service. but found a news article to talk about the australian family that jack met at 15 years old. to track down the boys who was 12 years old when he met jack. and he has been extremely helpful to me. some of the pictures in the books have never been seen before. talk about the ipo every story was just recycling the same pictures and often did not make sense. so i dug into this story randomly calling and
dealing. then i e-mail the u.s. studio fence said that's me how can i help? to impose a stereotype his name is not bruce but it is stated and he shared with me the family photos but it was 18 oz meeting -- the chance meeting. but it says the sign in life we have wealthy people was it look? jack has made his own look he really isn't a tektite - - day tech guy.
he had one of the of 120 at uneven know how you get that. you have to do that three times but in china it isn't a society that values the creativity. and it is age huge obstacle for him. his english was good. sewed true to the traditions i overplay that left-wing element but a union organizer with of communist party and tell it disbanded soviet taken his family to china because he wanted to
show the three children a socialist environment so as a result jack became a penthouse with david that was pretty embarrassing for jack i think it is cute. and corresponded that is the big deal in china and ultimately helped them about the man apartment and had some savings to be a risk and in a entrepreneur. >> as that personal element is a corporate element with the of broader picture what is the rise the tells us about china?
and by the way he might be here. no he had to go descend francisco but their opening an office here in washington d.c.. but i don't know i find the geography in the pronunciation of names even today it is like i never heard of. so this is where alibaba is from and his constituency but in indonesia of book with a map of the u.s. west coast because he get to know the names in chinese. will the chinese investment in that is important because they discovered the internet
tuesday next week. there is a holdback story had they got there but in a sense of the west coast the trade and relationship but now alibaba is on the east coast with europe and london and paris and munich they're increasingly reach a note it is having an impact even if you're not in china. but it just surpassed the wal-mart to become the largest retail and the world. it is a platform the above masson scale in is allowed because it is the business model but to bring in the
products of the u.s. in its next week of washington and state with the apple commission. last year added promotional even and alibaba fell the equivalent of 3,747th and then 72 hours their autumn the table in china. with the world the york state this is the dream with the allies and europe and but in china as constituency represents the interest and i have a whole chapter maybe
some of us know some of that with most of the fixtures in this room dash and whether that is a trading place but that crazy element of concentration in but we are beginning to understand is we need to know what does this mean? but here is n washington d.c. we hear the state department on the defense side but nationalism but it is pretty small by have been trying to connect we have
sally schwartz like this crazy place this change lives. there is able back story. there are important similarities. trying to connect with the outback alleys. so people to people sounds trite and commerce is about people to people to leave. and sells newspapers but other them a lesson from jack is a possible for
businesspeople to go into politics? that is a shining sample so i support the communist party and china so in a normal country and to have a huge constituency i think he is a politician and really knows what he says. i saw him on the stage with bill clinton. the the charisma but he has that in spades. and then interviewed jacqueline stage.
and that you never want to go onstage after jack. [laughter] if he has been sporting mohawk coarsening. he is not tall for go easy extra terrestrial over the english teacher who hoodoos somebody could go from an english teacher? we'll take a question before this goes in another direction which it already is. [laughter] >> aggression bank go to nike and why did they feel the need to go through the website in china although of
or large merchants. this is how i should have invested. but in 2003, they started the cycle and that is nine million merchants. it is my friend miss wong who doesn't have much to do and she is trading during the day. there is a lot of under employed people and people that need to supplement their income. this is why ebay didn't work. people start selling thing. you said nike.
we can have vike -- there is a lot of fakes. but the reality is they are a platform. willing buyer and willing seller. most westerns in beijing are hunting for fakes. this is getting hard because they have been shutting down the silk market. the chinese go overseas to buy the real thing. and i will repeat this, i said it last night, i was just with the chancellor telling me a story about christine lagard. she lives here and was walking down the streets in paris and a chinese woman came up to her saying can you come with me? i will give you 200 or 500 your
euros. when the chinese go overseas they want to by louis vaton and others. this is what they do. temperature happened to me. you might be able to pay for your ticket to paris. they go up to people on the street i just need your id. i will pay you up front and you will keep whatever it was. the chinese want to buy the real stuff and the westerns want to buy the fake stuff. it is a market. a scrappy market and how alibaba keeps it going was important to understand. it is free. i could sell plastic garbage cans which i might do.
but i could sell them for nothing. they might charge something but i don't have to pay alibaba because it is free. of course. forget my plastic garbage merchant. i will probably spend time on advertising. it makes money on advertising but nothing on listing fees and that is why ebay died in china. alibaba wants to do more. they are becoming a bigger part of the business because they make commission and the issue of fakes. but the issue is the merchants sometimes buy their own products. it is called brushing. they may ship empty boxes or buy lots of products because it gets them up in the rankings and they are the number one plastic garbage can company.
those of you who lived and visited china know it is unpredictable. in china, if you want to cross the road and i can see a stop light here. green does not mean it is okay to go. green is probably run with more awareness than red actually. so that is how you have to understand china. often contradictory rules. when the ex-pats come, the first day or two when we come out of china, you kind of -- i have yelled at people and they are like chill. because life is not stressful but it is intense. it is sort of -- but we miss it and love it there. that is what alibaba has. it has captured that street feel.
it is not for me but i heard a recent story about a guy selling tights. many people use this guy because he is always having good quality and delivered on time. he goes home from nestle and makes five times his salary selling women's stockings. it is not just a one-off thing. they have a chat function that is like a messenger client that po pops up. you have the spokes vendors and you basically have people who you know are your guy which is kind of like the old market. the fruit person, the umbrella person. and they will often give you discounts. they will send you free stuff. so alibaba is thriving because it re-created that china we love online.
ebay and others you have to fill out this form and they just failed. even though they had a very good early start. ebay did but they messed it up. so the creator was early to see the promise of china but let down by the people in her team. any other questions? sorry, i will leave it to you. >> thank you for being here and sharing the story of alibaba and jack ma. i was wondering if you could tell us about ten cents with respect to alibaba? you brought up in your discussion that there is going to be a venture here in washington, d.c. as well as new york. two questions and with the second question is it going to
be a government affairs office? just again, help me out with respect to -- >> sure. the second one, i think, yeah, governor relations, eric mill tay is the representative who had to go to san francisco but they have a lot of people who have worked in the white house, in commerce, various trading bodies. there is a political element or government to government element because we have seen how many chinese companies are not played that card well and it is cheap and i love it. but sprint wasn't allowed to buy from them and maytag got the review because the maytag man asked not to be chinese. there is practical reasons to reach out to the commerce
department. i think penny visited and my formal colleague who i met jack ma through is working at the commerce department. it is true for alibaba in china as well. there is the endless question of the government and internet and i tend to thing of it not just within the country but on a global level. these tech companies have huge power and influence and of course they have to consult. the first question, the competitors, j d, i did the look around on my phone which is a way to hook up but also connect with friends. i can see right now in washington, d.c. there are looks like hundreds of people, including chinese students but others like ourselves who use the app for their daily life.
in china, which you cannot do here, you can go out without your wallet. this is your digital wallet. i could send you money. location. everybody in this room, we could actually put ourselves on a map. say we were disbursed in d.c. and we could converse on this one point. there is a huge functionality. alibaba has an app and spent time catching up. they brought what is like china's twitter and internationally invested in snapchat. but what is important on e-commerce is i think i can have up to a hundred people, maybe two hundred, in my private group, but people are selling stuff this way. the tights guy or the umbrella guy can have a hundred people in
the group. it is powerful because if my friend says these are the best umbrella i am more likely to do it. a town across the border from hong kong is a massive company. that is the main competition on e-commerce and this mobile arena. it is china's google partly because google messed up by leaving prematuritprematuritpre. they didn't mead -- need to but they are not as innovative as they would like to be. and google struggled in e-commerce so they have aspects and headway. everything you do in china you from your cellphone. you can order any kind of food, any kind of product will be with
you normally within the hour, sometimes ten minutes. they have been investing in the o-to-o. think of best buy, alibaba bought the equivalent of best buy, or invested in it because you need to merge on the offline commerce and stop blending with cell phones. the main competition in china is called alibaba 10 cents. sometimes they gang up on by do. they don't like it. in china, uber is not doing very well.
they are behind and the reason is alibaba and ten cent have proxy equivalent to uber. the competition was so intense they ended up merging them because at one point they were spending hundreds of millions a month on subsidizing so the patrons were being paid, the drivers was being paid and at one case, alibaba was offering a free crate of beer. it might have improved the driving on the roads. they merged. and by do which partnered with uber, you see alibaba and ten cent are investing in the main competitor lyft. who uses lyft? and you like it. uber is most people.
but this debate or competitive landscape in the u.s. is increasingly influenced by china and chaos versa. -- vice. this a 3d global chess board. that is why the stakes are so high in his competition. >> this is cross marketing at work. >> she just sent me something on -- >> i am going to ask a totally pedestrian and simple total i don't know shit question which is this: what is the weirdest thing you can buy on alibaba online? i am talking about weirdest, strangest thing. >> this is c-span; right? a toppled fart.
another guy was making earrings made from mosquitos. they were quite poplar. mosquitos in a jurassic park foundation. he was a funny guy. the story about this guy, people think i like watching mosquitos and matching them. that is like matching snowflakes. you can outsource a break' with your girlfriend or partner. it is not just products. we are too squared to break up and you get somebody to do it for you. you have a family function and are under pressure to show up with a date and we talk about the gay and lesbian world and there is horrible stories of a
gay guy marrying a lesbian. but you could hire somebody to show up and just pretend. so you name it. china increasingly has an aging population partly due to the one-child policy. i am overdoing it here for the one child. there is a law, i think it is implemented. you probably know this. or at least recommended. that refines if people don't visit their aging parents because, you know, chinese traditional have you visit your parents. you can hire someone to visit your parents. how great would that be if you didn't have to fly to buffalo at thanksgiving? it depends on how complimentary your parents are particularly if the chinese person shows up like me. i think he visited. anything. you name it. if is legal-ish you can do it.
services have opened a new arena. that is just a reflection of i chinese society. wild and crazy stuff is happening there. >> hi, for those of us that don't follow china that closely there are couple impressions going around. one is that ping has pretty much continuous to exert a lot of influence, including in the area of using corruption to cleanup the system if you want to take one kind of headline. on the other hand it is clear that alibaba is leading in a different area that you used the phrase, a global situation, and brought globalization into that. is there any interaction between the eco sphere of ping's world
and jack ma's world? >> there is. >> could you elaborate? >> it really a key part of the conclusion of the book like where we are heading with this. can we have these heading in deferent direction worlds at the same time? we would not be having this discussion now so but much but the elements of nationalism. you just declared another holiday. september 15th is national security awareness day. with the italian prime minister, jack declared september 9th is wine tasting day in china.
the chinese is going to clear it out. we have consumerist china and it is time for national security day china. i think of it this way. alibaba is dominant in e-commerce today and sometimes has 70-80 percent of the market. the area he has chosen to expand to, the biggest, are finance and media. both of those are sectors where the state plays a very big role. i talked about jack creating this triangle with finance and logistics and e-commerce. ali pay is a currency for digital things in china and essentially for everything. when jack launched a fund saying if you have money in your account you can put it in a fund and we will manage you and pay you 2% more than the state banks. they called it leftover
treasury. a hundred billion went into that thing immediately and the banks were scared. they control trillions of yen and never experienced competition. they have been pushing back. if you go the bank, they will say that alibaba company is a startup. the banks are fighting back. same in media. a lot of journalists are quitting. the way jack jokes, and i think the 78 quotes he makes it is probably this one. i think you have want to be
successful they have to be wise, credible and audacious. fall in love with the government, never marry them, but fall in love. if you marry the government you a polygamist because there are so many arms of the government. jack confided in one year with 40,000 people and this could be the head, the bureau, the local mayor, but he cannot say no. he cannot meet everyone himicism. where went on the tour and you have maps and people are proud and the chinese is proud of alibaba. the government points to this
saying the china is moving toward a consumer driven economy and that is useful. jack's story isn't a story but a strategy. his whole life is about -- it being trip entrepreneur and knowing the need. i don't know where the disconnect will happen. the prime minister of china, doesn't have much power, but he is a good friend of jack and often -- jack is in and out of the center of power talking about internet plus economy. it doesn't matter if jinping is calling the shots. we had actually met in 2000, i
think. '99 even. we had not met since then. and you were at the u.s. consulate in shanghai. we went to meet jack and his wife and i think she tried to sell us real estate. do you have a mike? we will come back to you. i think we need it for the tv. >> it has been many years since j left china and i am unattached. but i read jack is involved in philanthr philanthropic pursuits and i am wondering if she is known for that in china? how does that resonate with the chine chinese? and any moral story for the way he conducted himself and businesses over the years and
moving to more philanthropic work? >> yes, moving with warren buffet, bill gates, and bill and melinda gates. jack is innovating more effectively than the government of china is with these people. there is an element of moral authority and jack is inspired by tradition and dollars and these things. you can argue self-interest because he talks about health care. they are investing in pharmaceutical companies but china has huge problems with pollution, aging population and jack wants to do something about it. in the u.s. it is easier to do something or to seem to be doing something. they make a huge mistake to help preserve the trap fisheries and the maple syrup. it is difficult to do philanthropy work in china. i heard about a millionaire
bought items and they come out of the wood work. china is debating how to deal with ngo's. we call them non-government organization in china because anything that is not the party is potentially a threat. so yes another example of jack pushing the envelope saying you need to change these things. and you probably know jet lee and they are leping reduce consumption of illegal wildlife. ming has done things with saving sharks and new rhino horns. the government needs to adapt. you are right. i think this is his legacy mode now. is there an element of self-interest? why not. but i think he genuinely cares. this gentlemen has been very
patient. yes. and then we will go behind. >> thank you. very interesting commentary. the government of china has been trying to move away from the export and import model and toward consumption for many years and seems to be doing it more successfully recently because exports are falling off a cliff. this model jack ma came up with a mass market model. do you see it having a significant impact on shifting the demand in china to a more domestic oriented model? or is this still too small a part to make that much of a difference? >> it is huge. talking about grocery deliveries, over 50% online. in the u.s., e-commerce is
deserved. offline retail was never too efficient. what can the chinese government do to encourage consumption? they can create the conditions for people to save less and spend more. it is an investment in national security. the question is is the e-commerce space going to be significant enough to shift the economy? or despite the billions and billions in money is it going to be just a small portion compared to the trillions of entire economy? >> i think the symbolism is useful. it does have a real impact in reducing the friction of people
to spend money. it hasn't been easy to buy things. you talk about state-run stores. this is opening up markets and the big question is can they make the shift. there is a terrible situation with coal mines but if you dwi to another area you will have a different experience. there are many different realities. i think alibaba is trying to become different from the shift happening and that is good for them and seems to be good for the country. the vice chair said it is like gm. what is good for america is good for gm and vice versa.
that is what alibaba is going for. i think this is about giving consumers trust, a sense of choice, and that is what has been powering chinese economic revolution. it is going to be a race against time. >> back here. my question is someone that is concerned about the development and press freedom or lack there. what do you think jack ma's intentions are with the south china morning post? >> alibaba recently purchased
the south china morning post in hong kong which is the major english paper. i met with jeff who purchased the "washington post." that is not really an accurate comparison for jack because jack could have fought but did it for the company. and then you think about why is the company doing it. it is taking them into choppy waters. they have had rough times in the past with tension with the u.k. hong kong is a divided society. i think joshua wong set-up a new
political policy so why would you wander into that. the faction mag gene -- magazines and other stakes. the company defended it by saying they are investing in the business. i would say they probably saved the paper because of the slow decline they got rid of the payroll and scrapped it. it is how china and the u.s. interaction. so i don't know. i think it is too early to say. i don't think we will use it for tutorials. and the panama papers were not
in that. and they were a columnist showing that. they were not in the new york times. it took a while for these -- if they were not participating in the release, anyway. who knows. but it is still in the post so that would be dumb to say today in beijing nothing happened. but in beijing news is increasingly sensitive on domestic newspapers. people have been quitting and saying publically they want to quit. weather is sensitive because you know it might be high pollution count today. i guess we will just have sports. that can be a thing. or the panda at the zoo. i think you are right. i think it is a very low end and increasingly i have been