Jack Ma: Chinese biz cannot give free IT services

He says entrepreneurs in China cannot rely on giving away free services to grow the businesses as larger enterprises such as Alibaba, Tencent and Baidu will supersede their offerings.

Alibaba Founder and outgoing CEO Jack Ma is urging Chinese entrepreneurs to look beyond giving away IT services and products for free as the business model does not work anymore.

In a report by tech news site TechNode Monday, Ma said offering free services worked for Alibaba and other fledgling Web companies in China 10 years ago. This is no longer the case today however, he said.

"Today if you go free, Tencent, Baidu and Alibaba will help you die. You cannot survive with ideas that worked 5 or 10 years ago, or in the last century," Ma noted.

The report added these bigger IT players can copy faster, gain users faster, and afford to offer services free for longer than any startup can afford to, making it difficult for entrepreneurs to follow the same path as these companies.

Industry analysts shared similar sentiments, having previously said the freemium model , while helping companies attract users, will face difficulties in measuring business performance, gauging future business outlook, and converting customers to a paid service going forward.




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