When Alibaba Group president Jack Ma and Dalian Wanda chairman Wang Jianlin took the stage together as two of China Central Television’s 2012 “Economic Figures of the Year” in December, their divergent views on the future of Chinese commerce escalated into a RMB 100 million bet. From Brett Zhu, via Tea Leaf Nation and The Atlantic:
Not surprisingly, Ma challenged Wang about the need for physical storefronts. Suave and self-promoting as always, Ma encouraged the young audience, telling them that the new era calls for a revolution against the established economic order. Wang retorted that even with a historic one trillion RMB in online sales from January 2012 through November 2012, e-commerce only comprised 3 percent of total market share. An experienced investor, Wang went through the top ten U.S. e-commerce businesses one by one, noting they all had their genesis in brick and mortar.
To conclude his riposte, Wang offered a one hundred million RMB bet on this proposition: In 10 years, if online consumption has surpassed 50 percent of total retail volume, Wang said he would give Ma 100 million RMB, or about US$16 million in today’s money, if Ma would agree to give Wang the same amount should online consumption fall short. (Ma ultimately demurred.)
Beneath the showmanship, Wang’s dramatic bet is a reflection not only of different approaches to investment, but the schism between younger and older Chinese. Young and low-income Chinese constitute a great proportion of Ma’s believers. Taobao’s past dramatic growth over the past decade has drawn millions of small businesspeople onto the site, while disabled Chinese have used the platform to find ways to earn money. Those with a low level of education or those hailing from outlying mountain areas have found a new pathway to wealth. Meanwhile, mainstream consumers still seek conspicuous consumption and rich in-person shopping experiences, a specialty of Wang’s Wanda Group.