Jack Ma & The Legend of Alibaba's 1M US Jobs

♠ Posted by Emmanuel in , at 1/11/2017 02:39:00 PM
The guy on the right can pretend to be a huckster like the guy on the left...when it suits.
[DISCLAIMER: The blogger is an investor in Alibaba.] Well, here's another entry in this seemingly never-ending parade of international businesspersons pledging jobs Stateside for American workers. If you don't know Jack Ma, you really should. He's the Chinese founder of Alibaba, the world's largest business-to-business ["B2B"] site, bar none. It's quite an accomplishment considering that he's not American, although China is arguably better-placed as a producer nation as opposed to a consumer nation like the United States.

That said, Alibaba is seeking to extend its foothold elsewhere, including the United States. Clearly, it would make sense for more US-based firms to use Alibaba's B2B portal since it's the most extensive one worldwide. Also, Alibaba is seeking to make inroads as well into the business-to-consumer ["B2C"] markets. In the American context, it means to encroach on Amazon's turf in other words. Conversely, Ma's also been promoting its consumer platforms for US retailers seeking an Internet presence in China.

Recently, Jack Ma--worth north of $30 billion and far eclipsing Donald Trump's wealth--nevertheless went to Trump Tower to lobby for his company. By introducing lines of business to US firms and consumers, Ma suggests he will be creating a million jobs Stateside:
On Monday, Alibaba BABA, Chief Executive Jack Ma became the latest CEO to tout job creation after a 40-minute meeting with Trump in the newly-minted politician’s gold-plated tower. There’s no better music to President-elect Donald Trump’s ears than pledges from CEOs to keep jobs in the U.S. or to create new ones. Trump ran much of his campaign on ensuring U.S. jobs are kept away from foreigners and aren’t outsourced to other countries, and he’s gone through great, highly-publicized lengths to prove his election is the reason why jobs are coming to or staying in America.

However, Ma’s assertion that he’s going to create a million new jobs in the U.S. by helping small businesses sell products and services to China is a stretch. The Chinese e-commerce giant is merely upping its own investments to appeal to U.S. small businesses, providing them with incentives, such as user data and logistics capabilities, in hopes that more American brands will sell items on its e-commerce sites. The increased demand on those U.S. goods from the Chinese middle class will prompt, it hopes, increased hiring as U.S. brands expand to meet the heightened demand.
Ma beats the BS artist Trump at Trump's own game. What is Alibaba really doing for its US customers? It's essentially providing expanded data analytics: who buys what, when, where and how. Does doing so create American jobs? At the most, very indirectly. Still, it's assuredly not a waste of Jack Ma's time if he [i] stops Trump from tweeting negatively about Alibaba, [ii] helps get Alibaba off the US blacklist of counterfeiter-friendly outlets, and [iii] forestalls measures to close US cyberspace to non-American service providers like Alibaba as per Trump's protectionist leanings.

Jack Ma didn't become a multibillionaire being stupid--even if he does have to suffer a fool like Trump once in a while.  

1/13/2017 UPDATE: Amazon and its marketplaces may have been the inspiration for Ma's rather dubious US job creation math. That said, Amazon is still more modest about the jobs it estimates are attributable to it acting as an online marketplace. Amazon is actually more believable since it has other offerings like acting as a distributor of e-books and so forth:
Amazon said that its Marketplace is the “indirect” creator of 300,000 jobs for those who have started or are growing these businesses by selling on the e-commerce giant’s site. Last year, more than 100,000 sellers generated more than $100,000 each in sales, the company said.

The company attributes this same sort of job and sales creation to its Kindle Direct Publishing feature, which allows users to self-publish books, Amazon Web Services, and the Amazon Flex program, which gives people the chance to earn up to $25 per hour delivering Amazon packages.

Earlier this week Alibaba Group Holding Ltd. promised something similar: 1 million new U.S. jobs by helping small businesses. However, the number of actual full-time jobs these sorts of marketplaces create are small, MarketWatch found.