Chinese tech conglomerate Alibaba Group Holding Ltd on Tuesday announced that CEO and Chairman, Daniel Zhang, will step down from his roles to focus on the company's cloud division. The surprise move comes after the announcement of a comprehensive restructuring aimed at boosting growth and establishing independent leaders for various business segments, including cloud computing, logistics, and international commerce. The company replaced its eight-year veteran CEO and Chairman, Daniel Zhang, with Joseph C. Tsai, a longtime confidant of billionaire co-founder Jack Ma.
According to the company's release, Daniel Zhang, the former company chief, will exclusively serve as the Chairman and CEO of Alibaba Cloud Intelligence Group. Joseph Tsai will assume the role of Chairman, and Eddie Yongming Wu will become the Chief Executive Officer. Zhang has been concurrently serving in three positions since December, including heading the cloud unit.
Both appointments will take effect on September 10, 2023. Eddie Yongming Wu is currently serving as the Chairman of Alibaba's Taobao and Tmall Group. Joseph Tsai is the Executive Vice-Chairman of Alibaba.
Zhang's restructuring plan which planned to divide the company into six separate business units was revealed at a time when Alibaba experienced three consecutive quarters of single-digit revenue growth.
As per a report by Bloomberg, Zhang assumed leadership of the $240 billion Chinese firm in 2015 after gaining prominence as one of the key contributors to Alibaba's "new retail" initiative. This initiative aimed to merge physical and online retail, expanding Alibaba's influence across various sectors, including malls and supermarkets.
However, in 2020, regulators took action against Jack Ma and his company, Ant Group, following regulatory concerns raised by the billionaire. Beijing subsequently initiated a broader crackdown on privately-owned technology companies, accusing Alibaba of monopolistic behavior and imposing a substantial fine for the alleged violations.
The report says that since the crackdown, Alibaba never regained its stratospheric growth, particularly as new entrants such as ByteDance Ltd. and PDD Holdings Inc. sapped its core business. It began to lose market share in the cloud, its other growth engine, to state-backed rivals.
“The good thing is that the new CEO and chairman are all co-founders of the company and are the closest to Jack Ma. That means Ma remains the spiritual leader of Alibaba. I don’t think the management change signals a big strategy change,” Kenny Wen, head of investment strategy at KGI Asia Ltd told Bloomberg.
Willer Chen, a senior research analyst at Forsyth Barr Asia echoed this view saying this brings “old Alibaba management back to the stage again. Not sure whether it is a good thing for Alibaba given now the key should be new growth driver and the restructuring plan.”