Bloomberg News

Alibaba Splurge on Graduates Fuels Battle for China Talent: Tech

October 31, 2013

Alibaba Employees

Employees work at Alibaba.com Ltd.'s headquarters in Hangzhou. Photographer: Nelson Ching/Bloomberg

Year of the Horse move over. For China’s Class of 2014, it’s looking like Dawn of the Geek.

Alibaba Group Holding Ltd. plans a fivefold recruitment boost to snare top graduates, with 1,000 new hires being offered as much as triple last year’s average pay. There’s also the added lure of stock in what may be the biggest initial public offering since Facebook Inc. (FB:US)’s $16 billion sale in 2012.

The Chinese e-commerce giant founded 14 years ago by Jack Ma and 17 friends in an apartment is taking to campuses across the nation as talent becomes the latest battleground with Tencent Holdings Ltd. (700) and Baidu Inc. (BIDU:US) China’s three biggest Internet companies have announced $3.5 billion of deals this year to win more of the country’s 590 million Web users and the $230 billion spent annually on e-commerce and online advertising.

Related: How Baidu's Robin Li Was on Time With Internet, But Late to Mobile

“The market is getting more and more competitive,” said Andy Mok, managing director of Beijing-based headhunting firm Red Pagoda Resources LLC. “It’s either the established players looking for an edge, or new companies trying to expand.”

Alibaba, valued by investment banks at as much as $190 billion, is adding graduates to its 24,000 workforce to develop products that will win mobile users ahead of an IPO.

Recruiters for the Hangzhou, China-based company are visiting universities in Beijing, Shanghai and Hong Kong among 20 cities targeted, according to Alibaba’s website. The average annual salary for last year’s 170 college recruits was 200,000 yuan ($32,850), about seven times the average annual wage for urban workers, according to Wen De, who supervises the campus hiring efforts in China.

‘A-Star’

New recruits that join the company’s “A-Star” program may be paid as much as 600,000 yuan as it targets engineers, product managers, and user-interface designers, Wen told prospective hires on a webcast last month.

“Once you get into the A-Star program, you won’t need to worry about buying an apartment and a car, you don’t need to worry about your annual salary,” Wen said. “The key is that you have real talent and capability. Alibaba’s salary offer is very competitive.”

Teresa Li, a spokeswoman for Alibaba in Hong Kong, declined to comment on the remuneration.

“Alibaba has in the past been quite tight with its compensation offers,” said Selina Ge, a headhunter with Beijing-based iLietou Ltd. “The 600,000 yuan offer is very likely only reserved for a very small number of people.”

The closely held company, which grants a type of share to employees, could raise about HK$100 billion ($12.9 billion) in an initial public offering, Ernst & Young LLP said in June.

Net Doubles

Alibaba could be valued at $190 billion, analysts at Sanford C. Bernstein said this month after the e-commerce company more than doubled second-quarter net income to $707 million from $273 million a year earlier. By comparison, Menlo Park, California-based Facebook earned (FB:US) $425 million in the three months ended Sept. 30.

Alibaba doesn’t sell merchandise itself. Instead, it runs platforms including Taobao Marketplace and Tmall.com that connect retail brands with consumers -- a cross between Amazon.com Inc. and EBay Inc. (EBAY:US) The company accounted for 70 percent of package deliveries in China last year, according to Ma, and sales on its two main platforms reached 1 trillion yuan in 2012.

Richest Man

At Sanford C. Bernstein’s valuation, Ma’s current $3.6 billion fortune would surge to $14.7 billion, ousting property-to-movies magnate Wang Jianlin as China’s richest man, according to the Bloomberg Billionaires Index. That would put Ma, Baidu founder Robin Li, with $12.1 billion, and Tencent’s Pony Ma, at $11 billion, in three of the top four slots. Jack Ma’s current fortune is based on the $40 billion valuation Alibaba put on itself a year ago; Wang’s wealth is $13 billion.

Baidu, the nation’s biggest search engine, is bolstering pay with share bonuses as the Beijing-based company expands mobile and cloud-computing services. On top of salaries, Baidu, which has a $58 billion market value, provides perks more typically found in Silicon Valley -- such as lounges that look like space craft and yoga classes. The company yesterday reported third-quarter net income rose 1.3 percent to 3.05 billion yuan.

Shenzhen-based Tencent, Asia’s largest Internet company, is visiting 10 cities and bolstering job offers with zero-interest loans to help workers buy property as a housing bubble puts homes beyond the reach of many workers, according to the company’s website. Jerry Huang, a director of investor relations didn’t respond to an e-mail and text query about the company’s campus recruiting efforts.

Top Skills

The most sought after people are those with skills in mobile, Internet finance and location-based services, said Cherry Zhang, an IT industry consultant in Beijing at G&E Human Resources Consulting Ltd.

Peking University and Tsinghua University are among the top campuses that all three companies are visiting.

Baidu has hired more than 140 students from Peking and Tsinghua universities in the past three years, according to Zhang Gao, a director who oversees campus recruiting at the company in Beijing by phone. More than half of the company’s 1,000 new workers will be for research and development.

Mobile Cloud

“We stepped up our recruiting efforts, especially in areas of mobile cloud because our business in this sector has gotten so big,” said Zhang.

All three of the Chinese Internet companies have been making acquisitions to add customers and technology.

Alibaba invested $586 million in Sina Corp. (SINA:US)’s Weibo unit, Baidu agreed to pay $1.85 billion for 91 Wireless Websoft Ltd. to add China’s biggest third-party app store while Tencent paid $448 million for a stake in China’s No. 3 search engine.

With competition for mobile users intensifying as more consumer go wireless, candidates can afford to be more choosy.

“Tencent’s workload is very heavy, even though the pay is OK, but it seems to be very stressful. Baidu is a more mature company and it’s the top in terms or search,” said Qi Bo, a 24-year-old mainland Chinese graduate of Hong Kong Baptist University. “Alibaba’s e-commerce business is doing great, and it has really great prospects.”

To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


Coke's Big Fat Problem
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • FB
    (Facebook Inc)
    • $72.65 USD
    • -2.03
    • -2.79%
  • BIDU
    (Baidu Inc)
    • $216.05 USD
    • -3.08
    • -1.43%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus