2023-06-20 08:58:17
Game of musical chairs at Alibaba: the Chinese e-commerce giant announced on Tuesday the unexpected resignation of its CEO Daniel Zhang and his internal replacement, in full restructuring of the group.
Alibaba, founded by the charismatic businessman Jack Ma and a pioneering e-commerce company in China, has long been a success story in the country.
But the group has found itself in the crosshairs of the authorities in recent years following a vast regulatory tightening aimed at tech giants.
After many turbulent months, Alibaba announced the biggest restructuring in its history in March just as the government appeared to ease the pressure.
In this context of upheaval, Daniel Zhang is stepping down as CEO and chairman of the board, the company announced on Tuesday.
He will be replaced on the board by Joseph C. Tsai, the current executive vice president of Alibaba.
Eddie Yongming Wu, who runs the group’s main consumer e-commerce applications (Taobao and Tmall), will become the new CEO.
These changes will be effective from September 10, Alibaba said.
Daniel Zhang will remain in the group to lead the cloud computing branch, on which the group relies heavily.
“The good moment”
“It’s the right time for me to make this transition,” said the 51-year-old manager, who transitioned to the head of the Alibaba empire following the departure in 2019 of its founder Jack Ma.
Alibaba CEO Daniel Zhang (d) and Executive Vice President Joseph Tsai on November 20, 2019 in Hong Kong.
AFP/Archives
The reorganization comes following Alibaba announced in March the largest restructuring in its history.
It provides for the division of the group into six distinct entities with the ambition of being able to list them on the stock exchange separately.
The changes announced Tuesday “look like the second part” of this vast reorganization, analyst Jeffrey Towson, of the firm TechMoat, which follows the evolution of the technology sector, told AFP.
“It’s a smart move” for Daniel Zhang as he becomes the head of Alibaba’s branch with the highest growth potential, he notes.
In addition to e-commerce, Alibaba is a heavyweight in Chinese tech, with activities in logistics, cloud computing, but also media, entertainment and artificial intelligence.
Alibaba shares lost more than 1.5% on Tuesday followingnoon on the Hong Kong Stock Exchange, where the group is listed.
turbulence
These changes come following several years of turmoil in the tech industry. Alibaba was particularly targeted by a regulatory tightening of the authorities once morest giants in the sector.
Alibaba had been the first company to suffer the punishment of the authorities.
At the end of 2020, Beijing had thus stopped a gigantic IPO (regarding 34 billion dollars) in Hong Kong by Ant Group, the finance and payment subsidiary of Alibaba, 48 hours before the event.
The following month, Alibaba was investigated for impeding competition. These setbacks had strongly penalized its profitability in 2022.
However, the Chinese authorities seem to be letting go in recent months and adopting a more conciliatory attitude towards the sector, in a context of economic slowdown.
In January the Chinese authorities thus gave the green light to Ant Group for a fundraising of more than one billion euros in Hong Kong.
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