Chapter 822: Investment in Alibaba

“How’s business these days? I’ve been so swamped I haven’t had a chance to check in.”

“Not great.”

With rumors swirling that the Chinese government was targeting Chairman Ma Yun’s Alibaba, it was safe to say the B2B side of the business was doomed.

B2B involved brokering deals between businesses, and in China, being targeted by the government was practically a death sentence.

I’d heard that partner companies were rapidly pulling out.

“Our core cash cow, the B2B business, is as good as gone. As B2B, the only segment that was turning a profit, goes into the red, our losses are widening even more.”

I’d heard the problems weren’t limited to B2B. I crossed my arms and asked Ma Yun.

“What about the C2C business?”

“Losses are growing there too. We expected losses, but they’re larger than anticipated. The biggest issue is the sudden emergence of numerous competitors.”

“Competitors are increasing?”

“Yes, a new company suddenly poured in massive capital and is rapidly taking over the market.”

In my memory, no e-commerce company in China posed a real threat to Alibaba.

Of course, there were some competitors.

eBay from the U.S. had entered China by partnering with a local company, and several Chinese firms had entered the market before Alibaba.

But Alibaba had overcome all those rivals to dominate China’s e-commerce market.

Even after that, major Chinese players like Baidu, Tencent, and Jingdong entered the e-commerce field, but none could stop Alibaba’s dominance.

That’s how crucial early market দখল is in e-commerce, so a competitor from the start?

“Is it eBay?”

“eBay is a problem, but a completely new player has unexpectedly entered the field. Have you heard of the Chungjeong Group?”

“Chungjeong Group.”

I’d never heard of them, not in this life or my past one.

“What kind of company is it? Who’s the founder?”

“We have no idea. Half of Alibaba’s employees have already jumped ship to them.”

“They’re poaching employees…”

This was practically a declaration of war.

They were openly aiming to take over Alibaba’s share.

“A company nobody’s heard of, with an unknown leader, appears out of nowhere. And right when Alibaba is targeted by the Chinese government. It’s suspicious. It’s reasonable to assume someone high up is pulling the strings.”

Ma Yun glanced around before subtly nodding in agreement.

“Yes, their growth is inexplicable otherwise. Originally, the C2C market was split between us and eBay. We were first, eBay second, but the gap wasn’t huge. But Chungjeong Group entered, quickly gained market share, and has now overtaken eBay for second place.”

“Still, Alibaba is in the lead for now.”

“True, but at this rate, we’ll likely lose it within months.”

China’s e-commerce sector was growing at an unprecedented rate globally.

I wasn’t about to let someone snatch away such an obvious goldmine.

“How much do you need?”

This was where I could step in with an investment. Ma Yun swallowed hard before cautiously speaking.

“…To put out the immediate fire and maintain our market share, we need at least 100 million dollars.”

“100 million dollars.”

I paused, considering. Ma Yun quietly awaited my decision.

“Then let’s invest 1 billion dollars.”

“What? 1 billion dollars?”

“Do you have any other offers on the table?”

“…Yes, we do.”

Ma Yun answered honestly, a response fitting for someone who hadn’t abandoned me in tough times.

“Yahoo and SoftBank keep sending us investment offers.”

“And those offers add up to about 1 billion dollars, right?”

“How did you know? Only three people in our company know that.”

“Haha, that’s a trade secret.”

I couldn’t exactly say it was because I was living my second life, nor should I.

I chuckled good-naturedly before turning serious.

“Why did you refuse them?”

“I already made a promise to Boss Kim, and our contract states I need to consult with Boss Kim before accepting other investments. I’m not so untrustworthy as to break that promise.”

I already knew that Masayoshi Son of SoftBank and Yahoo’s CEO were teaming up to invest 1 billion dollars in Alibaba.

That’s why, before Masayoshi Son could get his hooks into Alibaba, I made sure to include a clause in our contract giving me priority when seeking additional investment.

Even while adding that clause, I hadn’t held high hopes.

China, and Chinese people in general, weren’t known for strictly adhering to contracts. Breaking them was commonplace.

But Ma Yun had waited, trusting me even in hardship.

“Since Chairman Ma has shown such loyalty, I’ll reciprocate by investing 1 billion dollars.”

“But if you do that…”

I knew what Ma Yun was worried about. Alibaba’s current value wasn’t even 1 billion dollars.

“In exchange for the 1 billion dollar investment, in addition to our existing shares, you can increase my stake to 45%. I won’t ask for more than that.”

“Is that really alright?”

“Yes, that’s not an unreasonable request. Having multiple investors leads to more interference. You’ve dealt with me, so you know. I invest, but I don’t get involved in management.”

Ma Yun’s face, which had been tense with anticipation, gradually relaxed.

“That’s true. Seeing how strong the influence of investors is in the U.S., Boss Kim, you’re an angel, an absolute angel.”

“I’m doing this because I believe in Chairman Ma. If I didn’t, I’d be involved in management.”

Ma Yun smiled faintly.

An investor’s trust, there was no greater praise.

“Thank you. With 1 billion dollars, we can’t lose this fight.”

“Soon, James Han from Dream High will visit Shanghai. We’ll handle everything then, so please adjust your plans accordingly.”

Ma Yun nodded firmly. With the immediate crisis averted, he could speak more freely.

“Do you have any new ventures in the pipeline?”

“We’ve launched Alipay, an online secure payment service linked to Taobao. Since C2C transactions are between individuals, there’s a high risk of fraud. Thanks to Alipay, we’ve managed to withstand the Chungjeong Group’s offensive so far.”

“Ah, I know about that. You’re truly remarkable, Chairman Ma.”

The emergence of Alipay caused a sensation in China’s e-commerce by ensuring secure online transactions.

It addressed the biggest drawback of C2C transactions, which was trust.

In C2C, transactions were between individuals, so there were frequent cases of buyers not sending the promised goods after receiving payment or sending different items.

Alibaba stepped in to guarantee secure transactions, and the effect was enormous.

“But doesn’t eBay also support secure transactions?”

“They do, but it’s not tailored to the local Chinese market.”

The best offense is a good defense. Solidifying an area of advantage was a sound strategy.

I thought for a moment before speaking.

“Ma Yun, the Chinese government will soon announce support policies for e-commerce.”

“Is that true?”

“Yes, I’ll make sure Alibaba gets more of those benefits.”

“The Chungjeong Group has the backing of the Chinese government, will that be possible?”

“It’s probably not the entire Chinese government. There are definitely high-ranking politicians involved, but it’s not Chairman Hu Jintao or Prime Minister Wen Jiabao. I have a rough idea who it might be, but that person probably doesn’t have the capacity to focus on this right now.”

A new company appearing at the same time Alibaba was being pressured. Was that just a coincidence?

I believe the Chungjeong Group has the backing of Jiang Zemin and the Shanghai faction.

And right now, they don’t have the luxury to be focusing on this.

“You can increase losses further. Think of it as throwing money away, and increase investment. Secure people first. Profits can come later.”

“We think alike.”

“And you need to enter the B2C market beyond B2B and C2C.”

Ma Yun’s expression turned slightly somber at my words.

“We’re already preparing, but we don’t have the capacity yet. We suffered significant manpower losses this time. We plan to launch after stabilizing our existing businesses.”

“That will be too late. Even if it’s a bit lacking, launch within the year. Keep recruiting. The e-commerce market will continue to grow.”

Ma Yun listened intently, not interrupting.

“It will likely grow even faster than Chairman Ma or others anticipate. It’s better to be prepared by increasing staff now than later. You need to preempt the market with faster and greater investments than others.”

Ma Yun typically entered the B2C market about two years later.

He entered after winning the C2C war between eBay and Taobao.

Even then, it took a long time to dominate the market because he entered too late.

But if we moved that timeline forward, we could secure the market more decisively and overwhelmingly.

“I’ll consider it.”

“Yes I believe China can become the world leader in e-commerce. So don’t be stingy with investments.”

“I understand.”

I’d given all the advice I could. I lightly clinked glasses with Ma Yun and casually surveyed our surroundings.

“By the way, I don’t see someone I’m looking for.”

All the CEOs of the companies I’d invested in were supposed to be at this party.

But so far, aside from Ma Yun, I hadn’t seen anyone else.

Just then, I spotted Tencent’s Chairman Ma Huateng approaching us.

He quickened his pace when our eyes met.

He came closer and extended his hand in greeting.

“Boss Kim, it’s been a while. How have you been?”

“Well, you’re asking me how I’ve been when you probably know better than anyone else?”

Ma Huateng withdrew his hand, his mouth firmly shut.

Ma Huateng was the one who quickly turned his back on me and sided with the Chinese government.

“I thought you came because you decided you didn’t need me anymore.”

“Well…”

Ma Huateng’s face flushed with embarrassment at my directness.

“I’ve repeatedly said that I repay kindness with kindness and malice with malice.”

“…”

“Or did you think I’d never set foot in China again?”

At my শীতল words, Ma Huateng spoke urgently, his voice flustered.

“Boss Kim, there seems to be a misunderstanding.”

“A misunderstanding? What misunderstanding are you talking about?”

“It’s not that. The Chinese government said they wouldn’t grant us any additional permits, let alone the existing ones, unless we severed ties with Boss Kim. We had no choice.”

I gave him a chance to speak, what a mistake. I didn’t respond, instead turning to Ma Yun beside me.

“What did the Chinese government say to Chairman Ma?”

“…They threatened to not only halt our operations but also arrest me for treason if I kept this up.”

“Treason.”

Treason was the gravest crime in China. I’d heard he’d faced difficulties, but I had no idea he’d been threatened like this.

“Yes, they did. The Chinese government made several recommendations, but when I kept refusing, they eventually brought that up.”

“But why did you persist?”

“Because I made a promise to Boss Kim.”

Ma Yun was saying he hadn’t refused just once or twice.

I nodded and turned back to Ma Huateng.

“Did you even try to refuse once? Did you give in at the mere threat of losing your distribution channels? Did you have so little faith in me?”

“Companies like ours are vulnerable to pressure from the Communist Party. The more we resist, the greater the penalties. I was just trying to save the company…”

I’d heard enough. I raised my hand, cutting off Ma Huateng.

“I heard you wanted my shares back. Alright, I’ll hand them over. I’ll calculate the current value and transfer them at a fair price.”

Ma Huateng’s eyes widened, clearly not expecting me to relinquish my shares.

“But you’ll regret letting go of my hand.”

Just then, I saw Baidu’s Li Yanhong approaching from afar.

“Boss Kim, it’s been a while.”

It was Baidu’s founder, Li Yanhong, whom even Google’s founders acknowledged as a genius.

“Chairman Ma and Chairman Ma Huateng are here too. You truly are something, Boss Kim. You’ve invested in all the companies that will lead China’s future.”

“Well, yes. Does Baidu have any plans for new ventures?”

Li Yanhong tilted his head at my out-of-the-blue question.

“Huh? What do you mean…?”

“I’m asking if you have any intention of using Baidu’s massive user base to enter the gaming industry.”

I planned to have Baidu take over the gaming industry, which accounted for Tencent’s largest revenue stream.