INTERNET: Alibaba’s Ma, JD’s Liu Need Higher Standards
Bottom line: Unbecoming behavior by people like Alibaba’s Jack Ma and JD.com’s Richard Liu reflect poorly on China’s corporate sector, and reflects a lack of professional standards.
Alibaba’s (NYSE: BABA) charismatic founder Jack Ma is known for speaking his mind, but he was on the defensive last week after inflammatory remarks he made about rival JD.com (Nasdaq: JD) were published in a book. JD.com graciously accepted Ma’s rare apology for the remarks, even as its founder Richard Liu was also in the Internet gossip columns for his own controversial behavior related to a rumored break-up with his longtime young girlfriend.
This kind of behavior is common among celebrities throughout the world, and is part of a gossip culture that surrounds these people and makes for entertaining and eye-catching headlines. But the same behavior is hardly befitting of leaders of some of the world’s most valuable companies, and reflects badly not only on those firms but also on China’s broader corporate sector.
Ma should be commended for his contrition, which hopefully will mark the start of a new chapter that will see him tone down his remarks. Other leading Chinese executives who engage in similar types of unprofessional behavior should also think twice about how their actions influence public perceptions, and take steps to control what they say and do. At the end of the day all company executives should treat rivals as competitors who deserve the same respect they would give their own employees.
Jack Ma is no stranger to controversial remarks, which have helped to give him his larger-than-life image among the Chinese public. He was famous for his constant taunts at US e-commerce firm eBay (Nasdaq: EBAY) at the height of their rivalry a decade ago, and was also known for behind the scenes taunts when he clashed with a former CEO of Yahoo (Nasdaq: YHOO), formerly Alibaba’s largest shareholder.
Ma was back in the headlines for similar reasons last week, when derogatory comments he made about JD.com were published in a book after they were caught on tape. Ma reportedly said that JD.com would become a “tragedy” in the annals of Chinese Internet history because it used a different business model from Alibaba’s. (English article; Chinese article)
The usually brash Ma later issued his unusual apology, saying he was sorry for any problems he may have caused JD.com. Equally rare was the humble and self-deprecating tone to Ma’s apology, in which he said he habitually made “crazy” and “stupid” boasts when talking privately with friends, and had no idea such remarks might become public.
JD.com issued a statement accepting the apology, even as its founder Richard Liu was still lingering in the headlines from his own different style of embarrassing behavior over previous days. That episode saw Liu burst into the headlines when reports appeared on social media saying he had broken up with his younger girlfriend, Zhang Zetian, often called “Milk Tea Little Sister” by netizens. (previous post)
Reasons for the rumored break-up were gossipy and unimportant, mostly related to Liu’s desire to distance himself from Zhang, who was reportedly connected to people who were being investigated for corruption. Rumors circulated that Liu had paid off Zhang to end the relationship and that the two had deleted mention of each other on their microblogs, before Liu came out and denied all the talk.
Even before this embarrassing flare-up, the relationship between Liu and Zhang was regular fodder for Internet gossip, including occasional photos of the pair together and a microblog post from Liu last year in which he confessed his love.
One other notable case of lack of professionalism among major company chiefs is Zhou Hongyi, founder and chief executive of security software maker Qihoo 360 (NYSE: QIHU). Zhou frequently makes inflammatory remarks about his peers, and just last month was busy trash talking Robin Li, founder of leading online search site Baidu (Nasdaq: BIDU), over features he didn’t like in Baidu’s rival security software product.
Most of China’s other leading Internet executives are lower key, though a few do periodically talk about their rivals in more professional terms. Two exemplary cases are Lei Jun, co-founder of smartphone sensation Xiaomi, and Yang Yuanqing, CEO of PC giant Lenovo (HKEx: 992), who occasionally mention rivals in their public remarks but always in more respectful tones.
Company chiefs at major western firms are similar to their Chinese peers, with some choosing a low-key style while others are more talkative and high-profile. But few western CEOs will openly disparage a rival or lead a high-profile celebrity-style lifestyle, reflecting an unspoken industry rule that says company performance speaks loudest of all. China’s emerging field of business leaders should adopt a similar principle, and let their companies, and not inflammatory remarks and gossip-column behavior, become their leading voices.
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