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Daniel Zhang of Alibaba on leading a supercharged empire

Asia-Pacific companies

Daniel Zhang of Alibaba on leading a supercharged empire

The man who invented China’s Singles Day eyes opportunity offline

Daniel Zhang, in Berlin, says of Alibaba: 'We are positioning ourselves as a data company. We have half a billion customers with us with shopping intentions and a method to pay. We know who they are, what they want, what they hate' © Jan Zappner/FT

China’s Singles Day is an annual frenzy of online consumerism that ranks as one of the wonders of the modern commercial world. The 24-hour sale far outstrips Black Friday in the US, on which it was modelled.

Last year, Chinese and international superstars including Scarlett Johansson and David Beckham were enlisted to generate a buzz. Singles Day racked up $17.8bn of sales generating some 467m parcels, more than five times more than US consumers spent on Black Friday.

The man behind this extravaganza is far from the showman you might expect. Daniel Zhang, the chief executive of Alibaba who developed the concept in 2009, is a mild-mannered, bespectacled accountant who speaks in a quiet hush in a Berlin hotel lobby on a swing through Europe.

Mr Zhang was chief financial officer of Taobao, Alibaba’s online shopping site, when the company was looking to expand into the business-to-consumer market. In Alibaba’s fluid management structure, he took responsibility for the project and launched Tmall, as the B2C business is called, on November 11, or Singles Day.

“If people are single, they must be alone, so we should give them some shopping fun on Singles Day,” he says.

The concept has grown at a startling rate, like so much else in China’s freewheeling internet market, which has grown from 137m users in 2006 to 731m last year. Retailers offer big discounts on a wide array of goods and consumers save for months to snap up self-indulgent treats, ranging from Buddha-shaped pears to cars. Mr Zhang, however, says he restricts himself to buying jackets and shirts.

The real showman at Alibaba is the company’s super-charged founder, Jack Ma, who has turned the Hangzhou-based start-up into a multinational empire with more than 500m users in some 200 countries. In 2014, Alibaba became the biggest stock market flotation in the world when it listed on the New York Stock Exchange with a valuation of $167.6bn. Today, it boasts a market capitalisation of about $380bn.

Mr Ma has outlined even more ambitious plans: hitting 2bn users within 20 years and creating a global online commercial platform to promote a new model of trade, called Globalisation 2.0. While Mr Ma tours the world touting his vision to the likes of US president Donald Trump, Mr Zhang is entrusted with delivering Alibaba’s strategic ambition.

“Jack Ma is a guy with many ideas. He is very, very creative,” says Mr Zhang. “But I’m the guy who always wants to put my foot on the ground.”

Outlining the three main means to achieve the company’s goals, Mr Zhang says Alibaba will continue to expand internationally; move more deeply into the offline world; and squeeze extra value out of its vast data assets.

Mr Zhang says the company's founder, Jack Ma, 'is a guy with many ideas. He is very, very creative', but that he is 'the guy who always wants to put my foot on the ground' © Jan Zappner/FT

The first goal involves bringing the rest of the world’s products to China and Chinese products to the rest of the world. To that end, Mr Zhang visited Vinexpo in Bordeaux in June, where Alibaba has been working with French winemakers. As he sees it, Vinexpo has a physical platform, Alibaba has a virtual platform. Together, they can form a powerful combination.

“Selling wine online is not simple. You have to get a lot of input from the wineries, from the châteaux, from the families who have been in the business for so many years. Then bring this culture from France to China,” he says.

The company is fixated on expansion in China, aiming to connect the online and the offline world. Long before Amazon snapped up Whole Foods, Alibaba had been buying bricks-and-mortar retail stores, enabling the company to track consumers from one realm to the other. Mr Zhang says China’s online retail market accounts for about 15 per cent of total sales. “It’s all about how to transform the remaining 85 per cent into digital,” he says.

But it would be wrong, in Mr Zhang’s view, to describe Alibaba as an ecommerce platform. The company’s core strength is becoming clear as it sucks up data through its mobile super-apps, which cover shopping, entertainment, finance and social networking.

“We are positioning ourselves as a data company,” he says. “We have half a billion customers with us with shopping intentions and a method to pay. We know who they are, what they want, what they hate.”

This data revolution has enabled Alibaba to create personal credit profiles, known as Sesame scores, for most of its users. In turn, that has facilitated the development of unrelated new businesses, such as Mobike bicycle hire, which assumes that those with high Sesame scores are trustworthy enough not to pay a deposit. But it has also led to privacy concerns as the government uses the data, too.

Mr Zhang has a formidable path ahead of him if he is to realise Mr Ma’s vast ambitions. But he appears unflappable about the challenges and has grown used to accidental events.

In 1995, as a freshly minted finance graduate in Shanghai, Mr Zhang was set to join Barings, the British bank. Then the rogue trader Nick Leeson’s huge losses triggered the bank’s collapse. A spell at Arthur Andersen ended when the accounting firm was hit by the Enron scandal and Chinese operations were subsumed into PwC. Mr Zhang later gained experience working at Shanda, the online gaming company run by one of China’s richest businessmen, Chen Tianqiao.

Mr Ma’s outsized personality and the lure of working in such a fast-changing world won him over and he joined Alibaba in 2007. But Mr Zhang still commutes to his home city of Shanghai at weekends to see his family. “I’m single in Hangzhou, that’s why I can spend so much time on work,” he laughs.

The observer

Duncan Clark, author of Alibaba: The House That Jack Ma Built, says Mr Zhang’s skills, experience, and temperament have complemented those of Mr Ma. “He is the necessary adjunct of Jack,” Mr Clark says. “He has a lot of street cred internally having built up Tmall. And as a finance guy he has the ability to speak to investors.

“Daniel does not seek the limelight. But the culture within Alibaba is very much the smart boffin types. They do not always look like corporate titans.”

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