Hang Lung Properties (0101) chairman Ronnie Chan Chi-chung says he has invited Alibaba chairman Jack Ma Yun and Tencent (0700) chairman Pony Ma Huateng for dinner over the past two weekends, emphasizing the market capitalization of the two net giants exceeds that of major local developers.
"We've been friends for some time," said Chan at a media briefing this week. "I told them the size of their firms is three times that of the world's second- largest developer, Sun Hung Kai Properties (0016), and six times my company. Also, they are growing very fast."
Asked whether he supports Alibaba listing in the SAR under a partnership structure that is currently not permitted, Chan said: "Hong Kong should think how it wants to be while the whole world is going forward."
He compared the e-commerce business to that of real estate. "Costs of both land and virtual space have risen a lot. E-commerce business is not as easy as one thought," he said. He believes retailers who use e-commerce platforms are not necessarily profitable, but network providers such as Alibaba are.
Despite the success of e-commerce, Chan said physical presence is still important as people value experience and interaction. Hang Lung has been opening shopping malls throughout China.
Commenting on the impact various free trade zones will have on the SAR, Chan said: "Hong Kong has been self- centered. It should be accommodative and shouldn't ask the rest of the world or the central government [to adapt to its rules]."
He is optimistic on the mainland economy, saying the local government debt burden will not threaten growth.
But he warns the mainland economy should not open up as quickly as the Western world desires. He added it is too early to expect the full liberalization of the capital account by 2015.
Tokyo-based Nikkei.com reported yesterday that Jack Ma would still like to float Alibaba Group in Hong Kong during the first half of 2014. But he insists the firm be allowed to list under a partnership structure and that the local exchange consider changing the rules.