As the Alibaba Group's stock continues to fall, Porter Erisman, former vice president, defended his previous employer, saying the market is overreacting.
"In that one year since it went public, almost nothing changed about Alibaba. The only thing that changed was the outsiders' perceptions," Erisman told Xinhua.
Though Alibaba's shares have slid below its IPO price of 68 U.S. dollars per share, Erisman isn't surprised. "Given China's slower economic growth rate, that seems pretty reasonable to me," he said.
When Alibaba went public a year ago, it was a top pick for investors. Its initial public offering was the biggest in history. The company peaked last November, with its stocks trading at about about 119 U.S. dollars,followed by a long slow slide.
"If anything, it just proves to me that a company shouldn't be focusing on what the investors say," said Erisman, who worked for Alibaba between 2000 and 2008: "Alibaba should really just focus on what it does best and the customer."
When Erisman first joined Alibaba, he was told the company would go public in one month. But when the Internet bubble burst in 2000, the idea was abandoned. Looking back, he said, "It's probably the best thing that's happened to Alibaba. If you're just chasing the IPO, it's easy to get lost, because you're just trying to make a good story for investors. Much better to build a great company that focuses on the customer and then an IPO comes naturally someday."
He believes Alibaba's record-breaking IPO "proved that its patience paid off, focusing on the long term."
When Alibaba was launched, e-commerce and even the Internet in general had not taken off in China. By focusing on empowering small businesses, the company was one of the first to help e-commerce take root in China.
Erisman said Alibaba's business model is more suitable for developing countries, as e-commerce in the West is more about big companies and retailers. ( "It used to be that people would compare themselves with Amazon or eBay. Now when I go to India or Nigeria, people are trying to build the Alibaba of their own.
"The place where the infrastructure is the least developed, actually, in the long term, that's the greatest opportunity," he said.
