The retail eCommerce space is crowded and it’s a space crowds of companies want to be part of. What does it take to be a master of this marketplace? A few tips, anecdotes and glimpses into the future plans of some of the world’s top CEOs in the field may reveal what it takes to tune up the volume in the saturated market.
So what do the three masters of the marketplace have in common? Big dreams, thick skin and a vision that involves looking beyond today and executing a long-term vision. And in the meantime, keeping shareholders and customers happy. Easier said than done, of course.
Just ask Alibaba’s Jack Ma, the eCommerce visionary who created his own “American Dream” in China.
Alibaba — Jack Ma: “We want everybody to have this dream”
Let’s start with the Chinese eCommerce giant that’s been creating its own buzz with its record-breaking year — including its $25 billion IPO. And while CEO Jack Ma admitted in recent interviews that the pressure of being China’s richest man and the leader of such of powerful company is weighing on him, he’s also preparing to take his company to the top of the marketplace. In fact, in three years, he’s said multiple times, he wants to be bigger than Wal-Mart and be known as the number one retailer network in the world.
What’s the base for his success? First, he never forgets where he comes from. The self-made billionaire takes a piece from with his favorite movie “Forest Gump,” which he says he watches to remind himself “no matter whatever changes, you are still you.” And the other? Hint: It’s not the praise from the shareholders that made this top CEO humble. It’s the people who helped Alibaba become what it has to today that drives his vision — customers.
“I have always said: customer [is] number one, employee number two and shareholder [is] number three. Today, what we’ve got is not [about] the money, what we’ve got is trust from the people,” Ma said in a Sept. 19 interview following the news of Alibaba’s massive IPO. Still, he knows his plans must involve who pays the bigger bills.
“I’ve been thinking about the next five or ten years and how I can make sure these shareholders be happy. The very important thing is to make these guys happy. If they are successful, we’ll all be happy. That’s what I believe,” he said.
Alibaba’s short and long-term goals, lead under Ma’s vision, are to expand the company’s global presence. It’s already done so by getting its hand in the Black Friday madness in the U.S., and hopes to bringing its wildly successful Singles’ Day shopping holiday that brought in $9.3 billion this year to the rest of the world. Although Alibaba’s value has grown, Ma has kept with his same mantra throughout it all: Helping businesses makes money, and making a few dollars for himself, his company and his shareholders along the way.
“The instinct of an entrepreneur is to build things yourself and I think there are so many things we have to do with our ecosystem, not only with helping small business in China, but I think small business in Africa, in southeastern Asia, in Europe, in the States — a lot of farmers need help. The technology, if we want to acquire, we want to acquire companies that can help the ecosystem, that can help the small businesses.”
Ma has seized opportunities in China’s growing eCommerce space in a way no American CEO has been able to compete with. This also leads him to believe the county is equipped to keep up with its rapid pace of demand. And he wants to help others with the same work ethic have the chance to succeed along with him. A CEO a powerful eCommerce business must manage today’s logistics (helping China fix its poor delivery system) of getting goods into its customers hands from an affordable and timely manner, but also look ahead of today’s game.
“eCommerce in the U.S. is a dessert and in China it’s become a main course. Logistically, we’re seeing 29 million packages every day. But what we’ll see in 10 years is 200 million packages everyday. So we have to solve that problem, not today’s problem,” Ma said. “Our mission is helping other do business easier. …China changed because of us and we hope that in the next 15 years, the world changes because of us.”
Amazon — Jeff Bezos: “Working to create a little bit of history isn’t supposed to be easy”
That’s what Amazon CEO Jeff Bezos told his shareholders in 1998: “Working to create a little bit of history isn’t supposed to be easy, and well, we’re finding that things are as they’re supposed to be.”
Now 16 year later, the market has changed and Bezos must react to the continually competitive space, which Amazon had the luxury of shielding itself from for some time.
Bezos has faced sharp criticism recently because of Amazon’s series of lackluster earnings reports, but in explaining his future vision to investors, Amazon’s leader stuck to the same investment philosophy: Creating long-term measures for success through major investments. He can only hope now that those pay off. The company has had its shares of poor investments (Amazon Fire Phone), which took its own share of criticism, but it’s also been lead under Bezos into an entirely new company that now has a brick-and-mortar segment, same-day-delivery options and new fulfillment centers around the country. Amazon is even investing in small drones to deliver packages, though that won’t be ready for years — and only if the government approves.
For now, he’s focusing on keeping investors interesting by getting them to buy into his long-term investment goals. Like Alibaba, Amazon is banking on its global enterprise market growth to help secure its future. Investing in new products, new spaces and staying relevant in the competitive atmosphere remains on Bezos’ to-do list. And Companies have to take chances to stay competitive, Bezos emphasized in a recent 60 Minutes interview, and that means taking risk and testing new ideas in the marketplace.
“I would define Amazon by our big ideas, which are customer centricity: putting the customer at the center of everything we do. Invention: We like to pioneer, we life to explore, we like to go down dark alleys and see what’s on the other side,” Bezos said in the interview. Will delivering groceries be the company’s next holy grail? “It’s a possibility, the CEO said, but it’s a chance he’s taking.
And he won’t be raising prices in the meantime.
“Because that would erode trust. And that erosion of trust would cost us much more in the long-term,” Bezos said in the interview. That long-term approach is rare enough that it means you’re not competing against many companies. Most companies want to see a return on investment in one, two, three years. I care about that but I’m willing for it to be five, six, seven years. Just that change in timeline can be a very big competitive advantage.”
He’s got his eye on the long term, but also recognizes that companies dominating the marketplace must also balance out the needs of today since there’s no certainty for anyone or any company in this space, particularly with the changing habits of the online shopper and evolving technologies.
“Companies have short life spans. And Amazon will be disrupted someday,” Bezos said. “I don’t’ worry about it because I know it’s inevitable. Companies come and go. The companies that are the shiniest and the most important of any era — you wait a few decades and they’re gone.”
His hope? “I’d like it to be after I’m dead,” he half-heartedly joked in the 60 Minutes Interview.
eBay — John Donahoe: “Capitalize on our strengths and seize the opportunities before us”
John Donahoe may have the toughest task of building his name in the marketplace as his company prepares its split with PayPal. That split will eventually be coupled with his departure as CEO.
Like the above CEOs, eBay’s leader remains optimistic about the future for eBay and PayPal as separate entities, thought they face a series of challenges ahead. Starting off 2014, he remained optimistic about the next steps.
“We will continue to compete aggressively across all of our businesses, and in 2014 we’re stepping up our investments, particularly in PayPal. We’ll take a very disciplined approach about how we make these investments, but we intend to capitalize on our strengths and seize the opportunities before us,” Donahoe said at the start of the year.
So what does Donahoe say about eBay and PayPal’s future?
“We look forward about how to best position the company over the next three to five years. And really, four things that changed came out of that. One is that as we look forward we see that payments and commerce landscape, competitive landscape, changing at an accelerating rate, which creates enormous opportunity for eBay and PayPal,” he told CNBC.
“Second, we now believe that eBay and PayPal are best positioned to compete going forward as independent companies because it gives the kind of strategic focus and flexibility that we think will be necessary in the coming period. Third, the synergies that I talked about back earlier in the year are still there, but they naturally decline over time. You know, when you look forward, eBay will be less than 15 percent of PayPal’s business three years from now and we can achieve many of the benefits of the synergies through arms’ length commercial relationships.”
But what about PayPal’s future in payments? It’s going to be run under Donahoe’s guidance, at least until he helps the eBay and PayPal split and move under the vision of the company’s new leaders. The transition period is key for both sides.
“And so when you look forward, PayPal as an independent payments company can serve not just eBay, where it’s got 80 percent penetration, but serve all of the commerce ecosystems. All of the merchants. And as PayPal gets larger and larger and as the payments landscape changes, the opportunity we see for PayPal is to serve all merchants, all payment ecosystems, all technology ecosystems,” Donahoe said. “I’m not going anywhere. I’ll be CEO of this business throughout the next year until we separate and then I’ll go on one or both of the boards and I’m deeply committed to seeing this thing all the way through.”
Donahoe draws inspiration from his eBay role model Meg Whitman, who was CEO for eBay for a decade before stepping down. He wants to do the same for another CEO, he said.
“Next year will be my tenth year at eBay and I’ll be creating opportunity for two great leaders to become CEO. So I think there’s more than precedent around it. And I want to do what’s right for the company and ultimately that will work out what’s right for me.”