Amidst a slowdown in growth and intense competition, Alibaba Group, the Chinese e-commerce giant, has made an unexpected management shakeup, appointing a new chairman and CEO.
Joseph Tsai as CEO
Alibaba Group’s long-time veteran, Daniel Zhang, will step down as chairman and CEO in September, focusing on the group’s cloud computing arm. Joseph Tsai, the executive vice chairman and billionaire, will assume the role of chairman of the board. Eddie Wu, currently chairman of the Taobao and Tmall divisions, will take over as CEO.
The unexpected departure of Zhang, who led the e-commerce giant for eight years, coincides with Alibaba facing numerous challenges. Sales growth has slowed to single digits amidst China’s uncertain economic recovery after lifting most Covid-related restrictions earlier this year. Competitors like Pinduoduo, led by billionaire Colin Zheng Huang, have aggressively pursued a low-cost strategy to attract budget shoppers.
In response, Alibaba, headquartered in Hangzhou, has implemented a series of organizational changes. In March, the company announced its plan to divide into six smaller units, granting them autonomy in securing independent financing, including initial public offerings. This restructuring aims to facilitate quicker responses to market opportunities, with each unit empowered to make independent decisions. Moreover, it is seen as an effort to address concerns from anti-monopoly regulators regarding Alibaba’s dominant market presence.
As part of the new organizational structure, the cloud computing arm, led by the departing Zhang as chairman and CEO, is preparing for a potential listing in the coming year. Additionally, other units, such as the logistics arm Cainiao and the grocery chain Freshippo, are also pursuing initial public offerings.
As Zhang steps down, Alibaba’s co-founder and billionaire, Jack Ma, is gradually resurfacing after a period of keeping a low profile and traveling abroad, amidst China’s heightened crackdown on the internet sector. Recently, Ma appeared in Hangzhou to interact with teachers and students participating in an Alibaba-organized mathematics competition, marking his second public appearance in mainland China this year.
Jack Ma’s Ongoing Commitment
In 2019, Ma stepped down as Alibaba chairman and has since been dedicated to philanthropic endeavors. During a recent tech conference in Paris, Alibaba President Michael Evans mentioned that Ma is now spending more time in China and remains deeply committed to the company, showing the same level of care as he did when he first started it.
According to local media Late Post, in May, the billionaire also engaged in internal discussions with Alibaba executives. It was reported that he expressed concerns about the intensifying competition and emphasized the need for swift action. Ma urged Alibaba to prioritize its Taobao platform, where smaller merchants frequently offer products at lower prices, as per the report by Late Post.