Alibaba Group plans to hire 1,000 new graduates. Not only is this number more than five times that of last year, but the company will also offer salaries up to three times the average salary from last year. Additionally, due to the possibility of an upcoming IPO (Initial Public Offering), the company has become even more attractive to graduates.
In order to compete for the 590 million internet users and over $230 billion spent annually on e-commerce and online advertising, the three major Chinese internet giants—Alibaba, Tencent, and Baidu—have collectively announced deals worth $3.5 billion since the beginning of the year. Talent has now become the latest battleground for these three giants.
"The market competition is getting increasingly fierce," said Tian'an Mo, General Manager of Beijing-based recruitment firm Red Pagoda Resources. "Not only are established companies seeking advantages, but new companies are also striving to expand."
Investment banks have valued Alibaba as high as $190 billion. The company plans to recruit more graduates on top of its current workforce of 24,000 employees to attract more mobile users before its IPO.
According to a message on Alibaba's official website, the company's recruiters will visit universities in 20 cities including Beijing, Shanghai, and Hong Kong to recruit talent. Wen De, the head of Alibaba’s China campus recruitment, stated that the average annual salary for the 170 university graduates hired last year was 200,000 RMB (approximately $32,850 USD), roughly seven times the average annual salary of urban workers in China.
"Ali Star" Program
Wen De announced at a web presentation last month that engineers, product managers, and user interface designers participating in the "Ali Star" program could potentially earn an annual salary as high as 600,000 RMB.
"Once you enter the Ali Star program, you don't need to worry about buying a house or a car, nor do you need to worry about your annual salary," said Wen De. "The key is that you must have real talent. Alibaba offers very competitive salaries."
Alibaba's spokesperson in Hong Kong, Teresa Li, declined to comment on the issue of compensation.
"Alibaba has traditionally kept tight control over its compensation, so it may be that only a few people can enjoy an annual salary of 600,000 RMB," said Selina Ge, a recruiter at Beijing-based iLietou company.
Alibaba also grants some form of equity to its employees. Accounting firm EY stated in June that the company might raise 100 billion Hong Kong dollars (approximately $12.9 billion USD) through its IPO.
Net Profit Doubles
Alibaba reported a net profit of $707 million in the second quarter of this year, more than doubling from $273 million during the same period last year. In contrast, Facebook reported a profit of $425 million in the quarter ended September 30. Following the release of Alibaba's financial results, analysts at U.S. investment bank Sanford C. Bernstein stated this month that Alibaba's valuation could reach $190 billion.
Alibaba itself does not sell goods but provides two trading platforms, Taobao and Tmall, which connect retail brands with consumers, operating in a model somewhere between Amazon and eBay. The company's founder, Jack Ma, stated that Alibaba contributed to 70% of China's express delivery packages last year, with combined sales on these two platforms reaching 1 trillion RMB in 2012.
Richest Man Ma Yun
Based on Sanford C. Bernstein's valuation, Jack Ma's personal wealth could soar from the current $3.6 billion to $14.7 billion, surpassing Wang Jianlin of Dalian Wanda Group to become China's new richest man. According to this calculation, Alibaba CEO Jack Ma, Baidu CEO Robin Li ($12.1 billion), and Tencent CEO Pony Ma ($11 billion) would occupy three of the top four spots on China's billionaire list. Currently, Ma's wealth is calculated based on Alibaba's self-valuation of $40 billion a year ago. Wang Jianlin's personal wealth stands at $13 billion.
As China's largest search engine, Baidu is using stock options to attract talent to expand its mobile and cloud computing services. Besides salaries, Baidu, with a market capitalization of $58 billion, also offers benefits similar to those of Silicon Valley companies, such as spaceship-like sofas and yoga classes. The company's third-quarter results released yesterday showed a 1.3% year-on-year increase in net profit, reaching 3.05 billion RMB.
Tencent will also conduct campus recruitment in ten major cities and use interest-free housing loans to attract employees. The company's investor relations director, Jerry Huang, has not yet responded immediately.
Top Talent
Cherry Zhang, IT industry consultant at Beijing G&E Human Resources Consulting, said that the most sought-after talents by companies are in mobile technology, internet finance, and geolocation services.
Peking University and Tsinghua University are the main universities targeted by the three companies. Zhang Gao, the person in charge of Baidu's campus recruitment, stated that the company recruited more than 140 graduates from Peking University and Tsinghua University in the past three years, and more than half of the newly recruited 1,000 employees will be engaged in R&D work.
"We have accelerated our recruitment process, especially in the mobile cloud field, because our business in this area has already grown significantly," said Zhang Gao.
These three major Chinese internet giants are acquiring users and technologies through mergers and acquisitions.
Alibaba invested $586 million in Sina Weibo, while Baidu acquired 91 Wireless for $1.85 billion and Tencent invested $448 million in Sogou, China's third-largest search engine.
As more and more users are using mobile devices, competition in the mobile internet sector is intensifying, giving job seekers more choices.
"Tencent has a heavy workload, though the pay is good, the pressure is too great. Baidu is already mature, it's the leader in the search market," said Qi Bo, a 24-year-old mainland graduate from Hong Kong Baptist University. "Alibaba's e-commerce business is good and has a promising future."