On Tuesday, Alibaba proclaimed that CEO and Chairman Daniel Zhang will be replaced this year by veterans of the Chinese tech giant. Eddie Yongming Wu will become the new CEO, and Joe Tsai will be appointed as the new chairman starting on September 10th. Both executives are familiar with the company, having worked closely with Alibaba's founder, Jack Ma.
On Tuesday, Alibaba made a significant leadership shakeup, through which Daniel Zhang will be departing from his positions of CEO and Chairman this year. This will be replaced by two veterans of the Chinese tech company, Eddie Yongming Wu taking the role of CEO, and Joe Tsai as Chairman from September 10th. They are both individuals with long-standing familiarity to the billionaire founder of Alibaba, Jack Ma. This appointment appears to give an indication of what will possibly be in store for Alibaba's future, as well as a glimpse of who the people behind the change are.
Eddie Wu, one of the co-founders of Alibaba, had been serving as its technology director since 1999. His expertise lies in the core e-commerce and technology-related monetization of the company, thus making him a suitable choice to lead the entire conglomerate.Indeed, when the leadership resorted to splitting Alibaba into six subsidiaries, he was appointed the chairman of the Taobao and Tmall Group, two of the largest e-commerce services in China. Wu was also the CTO of significant businesses such as Taobao and Ant Group's Alipay payments service. He was instrumental in the monetization of Taobao and Tmall, as well as the Taobao mobile app that propelled the organization into the smartphone age.As Jacob Cooke, CEO of WPIC (an e-commerce tech and marketing company who help international brands sell in China), said in an interview with CNBC: "Eddie Wu's promotion to CEO isn't too much of an unexpected move. He had a great part in establishing Alibaba and in the tech development and monetization of Taobao and Alipay. His rise to the CEO of the whole company is a natural progression and indicates the undying emphasis of e-commerce in the organization's plan."
Joe Tsai, one of the co-founders of Alibaba, served as the company's CFO until 2013 and currently holds the position of executive vice chairman. He is also the chairman of Cainiao, an Alibaba logistics unit, and is a part of the Taobao and Tmall team.
Tsai, known for his international focus, is well placed to steer Alibaba's outward-looking strategy. This is evidenced by the investment in Lazada as well as plans to introduce the Tmall platform to Europe. As owner of the Brooklyn Nets basketball team in the U.S., Tsai has showed a global mindset. Cooke commented on the alignment of this mindset and Alibaba's strategic direction.
It has been a very challenging two and a half years for Alibaba, beginning with the blocking of Ant Group's IPO in November 2020, due to a failure to abide by regulations. The Chinese government has intensified controls over the domestic tech field, from competition to data security. Regulators wielded a huge 18.23 billion yuan ($2.5 billion) antitrust penalty against Alibaba in April 2021. In addition, its expansion has become sluggish due to the weakened Chinese economy and heightened rivalry with JD.com, Pinduoduo, among others. Its core cloud division, to which the departing CEO Zhang devotes all of his attention, experienced reduced income in the March quarter. Tsai and Wu will be attempting to boost growth at the firm with the macroeconomic predicament persisting. According to Xin Sun, senior lecturer in Chinese and East Asian business at King's College London, “I don’t think the resequencing reflects much regarding Alibaba’s business focus, nor do I think it will have a noteworthy effect on the corporation’s performance. After all, the most decisive elements behind the firm’s results are structural, such as the dismantlement of its ecosystem, the increasingly intricate regulatory environment, and intense competition from rivals. None of these have changed.”
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