Ma. Cofounder and group ceo daniel zhang. Everybody has a big chance to go digital, but people need to change. Three leaders driving alibaba the global disruptor. Stephen it was a humble as theyg for jack ma cofounded alibaba in 1999. The chinese were even connected to the World Wide Web and alibaba wanted in. Ofbaba employee was expected contracting sars in 2003, Senior Executives were quarantined and that gave birth to perhaps the best platform today. Which growth ebay out of china and led to the single day shopping extravaganza and the world meeting the new ipo in 2014 and the launch of many new businesses, much like bloombergs set up for the interviews, the rise of alibaba has been no small feat. And its next steps may be even more demanding. I think the challenge is getting bigger. Much bigger than the early days. The early days is the fun part. When we competed with ebay, when you see the sars, theres a lot of things you can learn from the other guy, the other companies, but today, the things we are doing, there nothing we can learn from. Nobody. Were he pioneer, we are the leader of this industry. What are the things driving you question mark the values, the mission . Theres not a textbook you can read. Stephen i dont think anybody could have imagined the scale we have reached today, but i think we are very lucky to have participated in the confluence of chinas Economic Growth and also, the rise of technology. This november is the best reflection of the landscape change, the internet landscape changing china and the consumer lifestyle change in china. 500 million customers in china and today, even more. More and more overseas customers. When i started out in 1999, the gdp per capita of china was 870. Today it is over 800,000. It is attended increase. X increase. 10 we have been very fortunate in both ways. We know where we are going. That is our direction, but on the way there, we have more more problems. Today, if you look at the volume of the package, generally our platform is about 55 million a day. We strongly believe that this goes to one billion some years later a day. It is just like when you are climbing the mountains. When you are only 1000 meters high, you enjoy it. It is fun. 1000 meters,ters, you dont have an affair come you dont have a lot of working together with you. You have no one to share your thoughts and worries with. Now, we are probably like 6000 meters high. Without a strong ideas. D the mission, and difficult to continue to walk. Have you faced resistance in china for what you are doing . Comments about the internet economy destroying manufacturing and driving things down. Do you think there is an old guard that doesnt quite understand the new economy, that they will have to adapt . We are this kind of resistance in the past 18 years everyday. We see people like that a lot. This is the revolution of the technology. People like the older tycoons in the old economy. In their earlier days, they destroyed a lot of lowerlevel companies. We sold them more than five hundred billion dollars u. S. Product last year and 70 of them were helping selling the manufacturing. We dont produce. We will never be able to reach the consumers. Facilitatell you reform at the state owned enterprises from the outside, because the vested interests want to keep the status quo . Jack yeah, we are pushing that. This is why a lot of banks dont like us in china. We are not necessarily interested in buying the bank to change it. The china banks really act very quickly in the past three to five years. These banks changed their services so fast. They put so much resources on the technology and on serving the people better. You dont have to buy a bank and change one bank. When a tiger is following you, you can much run faster than you thought. You are asias richest man, but you are stephen asias richest man, but are you still an entrepreneur . Jack i dont think about that. I dont have time to spend money. How much money you can spend. Stephen coming up, alibaba broadens its scope, investing heavily in Southeast Asia and into brick and mortar under its new retail concoction, and jack ma sizes up one of his chief competitors. Jack i think tony did not have any experience in mobilization. Globalization. Not like us. Stephen having conquered ecommerce, alibaba is investing in areas like cloud computing, logistics, Digital Entertainment and even brick and mortar retailing by marrying the online and offline worlds through its supermarkets, as well as the cashless and cashier less convenience stores. It begs the question, is alibaba moving away from its asset light model . When you are young, tiny, light model is good. When youre strong, big, you need heavy things. But todays alibaba size, you should not leave the heavy model to the others. It is something you have to do, because the infrastructure keeps building up. You have to invest. We want to change the Consumer Experience because you have this growing middle class in china, whose expectations and demands are being elevated. Online, offline, we cannot separate. They need to do the transformation. All the great chinese motor Retail Formats will be upgrading or even redefined. Think this one is just our baby. We want to incubate the successful model and empower our offline Partner Summit to operating business. Most is embracing the change. What we can do is serve an instore purchase. You can also walk in and eat right there so it is like a food hall. Then, if you dont feel like going in the streets, going into the store, you can stay at home and order everything on your mobile phone and it gets delivered to you in 30 minutes. Everything that is done, instore purchase, eating, or online purchase starts from the same store location. Alsously, alibaba investing heavily into south east asia, into india, as well. Can this new retail model be implemented and will you implement that as you expand in Southeast Asia . I would say yes. Onlyetail is not applicable to china, it is applicable to all the markets globally. I think Southeast Asia over the next five or 10 years will penetration with ecommerce taking more share of overall retail. Most, i think as a whole, of Southeast Asia is less than penetration, specifically indonesia. This year, they will have less than 15 billion for the whole country, so there is a lot of growth opportunities. Well, always think about the future. Sitest alibaba put our today, you have to think about what you can do in 10 years later. What are the key things . There is a competition. Pay has beenali around for 10 years, no competitors, which is good for alipay but not the mission we want to do. Alipaybeginning, i think said wow, we have a competitor. You ask today, we know they know we are somebody we can Work Together and make the market maker. This is the fun part. They are learning a lot from us, we are learning a lot from them. Those two companies, if we keep working together, getting inside trust and credit, that will make the market much bigger. Stephen what is going to be the criteria for you, and as you compete with others, for your russian and Southeast Asia . That is your new horizon. Have took a peta, you are a lead investor there, indonesia, i hear you are looking at big baskets, there seems to be a land grab in Southeast Asia. Are you really going to get the penetration and the growth there through the payments or istructure and alipay, it to get the ecommerce platforms because penetration in these in Southeast Asia . Jack i have been saying again and again, internally the thing is, alibaba should going outside. Ecommerceobalized infrastructure. We are not particularly interested in one market, malaysia or indonesia and getting some market share there and being the largest Ecommerce Company there. We are not interested in that. They need a payment system, they need a logistics system. They need the platform system so they can sell things globally. We are interested in all of the trading and ecommerce. Fore have been doing that 15 years. It would probably be good on the payment, especially good if you reach it, the Chinese People use a lot. When you go to india, indian people do not use we chat. Probably cannot do a lot. I think they have no experience of globalization. Not like us. Stephen are you afraid of all you are collecting by creating this ecosystem and because of your partnerships with time now and best logistics, that you are collecting data. You run the risk of down the road, having a dispute over ownership of that data, much like there has been in the past. Because you want to be a data company, that is your biggest asset, right . Jack i think that in the future, there are two issues with data, security and privacy. For these two issues, there is always a problem ahead. You have to be very, very careful about security of the data and privacy of the data is. Data. But you have to go forward. When you worry, you have to go. When you have a problem, solve the problem. Solve the problem. Stephen how valuable is that data . It must be extremely valuable. Jack this data is so new to everybody, and it takes time to educate. If the data does not flow, meaningless. , it is good. Oday everybody, every government should Pay Attention to data, but how to operate the data in the proper way that can improve the society. Improve peoples life. That is something the next five or 10 years will be critical. At the beginning, nobody cared about data, now everybody. Just like the last century, at the beginning, no one compared about cared about the oil, everyone loves the oil. And then the oil, they wanted war. Alibabasp next, listed shares are on a tear, but does jack ma think we are headed for another bubble . We are not that greedy. If you are not that stupid or crazy, it is easy to survive today. Stephen alibaba was founded at the turnofthecentury, amid a global rush into. Coms. They even opened an office in california and was ready to ride the wave. Jack ma saw the frothiness and correctly predicted the. Com collapse in 2000. Are we facing a similar kind of tech bubble right now with these billiondollar unicorns and the inflated tech scene . Are there emily any similarities . Jack no, not that much. I think the challenge at that woulda lot of people understand how powerful internet is. , whether internet internet can sustain. People just jumping into it. People hadot of crazy ideas but do not know how to operate. Today, everybody knows. Internet is powerful, going to change human history. I look at it from a very longterm perspective. If you take a step back and look at alibaba, we went public in 2014. Our stock price at the ipo was 68 a share. Today, it is at the current level, about 2. 5 times increase, but look at our revenues. During the same threeyear period, our revenues have tripled. Our stock price hasnt even caught up with our Revenue Growth yet. Same thing, facebook. When they went public, i think they had about a billion users. Now they have 2 billion users. If you look at the longterm the Large Scale Companies continue to grow and there is no reason why they will stop growing. Ofi think the infrastructure the internet, the infrastructure of technology is much better than 10, 15 years ago. If youd if you are not that greedy. If you are not that stupid, it is easy to survive today than yesterday, because the speed of the internet era oftentimes blurs the lines of regulation. And you push the boundary, push the boundary and then regulators overreact or whatever. How do you stay ahead of that and also not overstep your boundaries . We always step ahead of the regulators. We have to, otherwise we go nowhere. But when you go ahead of the regulators, there is a always painful thing. Wait a minute. My job is to regulate. My job is not about innovation. My job is not to improve other peoples life. It is your job. It is the painful process alibaba is learning. Stephen how if you stayed close to the fire without being burned . We are very careful. When we were young, it is ok. Now we are big. We probably regulate our self much more strictly, much more than the regulators. Today, we have more than half a billion people using us. We have such huge transactions. Anything wrong we have to discipline our self much more. Stephen are you concerned at all the capital controls in place, or the heightened capital controls, and also the deleverage campaign and the crackdown on irrational and a overseas, into entertainment, in sports, in noncore businesses, is this going to be a deterrent for Outbound Investment . Does it curb your ambitions . No, not really. I think it depends how you do it, but alibaba our strategy, we never think we should dump money in the outside world. And the older days, when you go to some country, the most important is to dump the money. But we think we should share the technology. We should be inquisitive the knowhow. It is a lot of thinking, and a lot of commitment. A lot of patience. Ok, we are lucky we are a global company. Little sentiment, but when you see a fairly large but ite trade deficit, doesnt really affect us because the trade flow that we are talking about is selling American Products into china. So, we are steadfast focus on in the other and direction, i think some of the retailers, both traditional and online in the united states, will suffer first if there is a trade war, based on trade tariffs. Jack we never changed our u. S. Strategy. We want to help small to toiumsize Companies Sell china, so to asia. This is what we think. We dont want to be the local u. S. Ecommerce company. Amazon, ebay, so many nice Interesting Companies all over the u. S. Stephen you dont want to take on amazon, doing what they are doing . Jack no. What about stephen what about entertainment in hollywood . I know you had a partnership with amblin and steven spielberg. What is your strategy with throughhip in hollywood the best name in hollywood . Jack yeah, first important is partour entertainment is of our strategy. We asked ourselves in the next 10 years, we know we will be very profitable come a very good doing ecommerce and logistic, financing and data. But 10 years later, what is the new business alibaba should be focused in . Happy and healthy, double h is our direction. The matter how rich, you want to be healthier, you want to be happier. Entertainment should be part of the business. We dont view Digital Entertainment as a separate business. Review it as an investment to acquire and retain customers on our system. It is ok to incur long as it builds the Customer Base and the ecosystem . Jack yes. There is a lot china can learn from the hollywood. They should partner with them. Not think, it is good, lets buy a. This is the strategy for 10 years. Dont worry, a lot of people criticize us. We dont criticize for 18 years, never stop. The you know where you are going . Stephen where do you see alibaba and what kind of company do you think alibaba will be 18 years from now . I will say alibaba today is not an info company, it is an economy and an assistant to go digital and do the digital transformation. Of course, i think we want to be bigger, but the most important thing is quality. Business will always change because we will follow what our customers want. But the important thing is alibaba, 5, 10, 20 years from now will still be the same company when it comes to our mission. To make it easy to do business anywhere. Jack i think 18 years is enough for is to improve privatization globalization instead of killing globalization. I believe when trade stops, war starts. So we can fight trade, but not fists. Mission, this is the responsibility for alibaba to improve globalization. Stephen thank you so much. Jack thank you. Qqqqqqqqqqqqqqqqqqqqqqqqqqqqqq announcer the thrill of living well is in the pursuit. The pursuit of the rarest experiences. The pursuit of the finest products. The pursuit of quality in everything you do. And in all of these pursuits, you need the best intelligence to make the best decisions. We know that she sells for a lot, but what makes her important . 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