Aging Gracefully, China’s Internet Heads to Launch Insurance Venture

November 7, 2013 Leave a comment

November 6, 2013, 10:05 PM

Aging Gracefully, China’s Internet Heads to Launch Insurance Venture

When the two biggest names in the Chinese Internet sector get together to start an online insurance business, it can mean only one thing: China’s heroes of online innovation are getting old. Speaking together at an event in Shanghai on Wednesday, Alibaba Group Holding Ltd. Chairman Jack Ma, 49, andTencent Holdings Ltd.TCEHY +1.00%Chief Executive Pony Ma, 42, both agreed that growing older in the fast-changing tech sector is a challenge.“My biggest crisis is that I don’t understand what young people like,” Pony Ma said, speaking to an auditorium of students from Shanghai’s Fudan University, where the two announced the new venture—called Zhong An Online Property Insurance and jointly invested in by Tencent, Alibaba, and Ping An Insurance601318.SH -0.35% (Group) Co.—which will sell insurance products online.

Pony Ma then admitted that he couldn’t understand “the fun” of the popular American mobile photo-messaging app Snapchat despite its popularity in the U.S. among teenage girls. Earlier this week The Wall Street Journal reported that Tencent is vying to lead a fundraising round of $200 million for the app.

“If you ask me what I worry about every morning when I wake up, it’s that I don’t understand future mainstream Internet users’ habits,” Pony Ma said, adding that growing old can be the biggest problem for the leader of a large Internet company like Tencent. “Even if you don’t make any mistakes, the mistake is that you are too old and need to be replaced.”

Pony Ma’s comments were redolent of those made by Jack Ma earlier this year in a letter announcing his resignation as chief executive of Alibaba. At that time, Jack Ma wrote that at 48 years of age he was “no longer ‘young’ for the Internet business,” adding that  it was time for him to step aside so younger leaders could rise. Echoing that sentiment Wednesday, Jack Ma said the delight he gets now is not in the new products he can create, but instead in supporting the younger generation in their endeavors to do something new.

Despite their lamentations, neither Jack Ma nor Pony Ma are really rusting unburnished. Though Jack Ma has stepped back from the day-to-day operations of Alibaba, he has been busy meeting with Chinese officials. Meanwhile, Pony Ma’s Tencent is responsible for the most popular mobile application in China, WeChat, and the company has more recently been making waves in Silicon Valley with a series of investments in startups there.

Nonetheless, the direction both Alibaba and Tencent are taking shows a new level of maturity. While Alibaba first helped anyone with an idea open an online store, it is now pushing out products to help young people save and invest their money, or take out loans to expand a business. Meanwhile, Tencent is hoping to complement its online gaming business with a new endeavor for which it has applied for a banking license.

And the new insurance company itself shows that old age has yet its honor for the two Mas, who are not related. Both were quite excited at the fact that the normally hidebound Chinese regulators allowed them to start the nation’s first Internet insurance company, which is geared in particular to helping get young people insured.

Though he may feel old, Jack Ma certainly didn’t sound it when he discussed the curiosity that has fueled his career in the Internet and his desire to grow Alibaba’s e-commerce business into a financial-services operation.

“A lot of people say you can’t do this, that’s not OK. We are curious, why isn’t it OK? Why can’t we do it? There are people who say that the financial industry is too risky, Internet companies shouldn’t touch it. Well, I’m curious.”

The peroration gives hope there may yet be some work of noble note for him before he fades out.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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