Alibaba Group Holding is replacing eight-year veteran chief Daniel Zhang at the helm of a Chinese e-commerce company bleeding market share and struggling to revive growth in the post-Covid era.
Joseph Tsai, executive vice chairman, Alibaba Group Holdings, will take Zhang’s position as the chairman of the board. Eddie Wu, chairman, Alibaba’s core Taobao and Tmall online commerce divisions, will take over as chief executive of the $240 billion company.
Zhang’s unexpected departure comes after Alibaba announced a six-way restructuring to strengthen growth and create a family of standalone leaders in businesses from cloud computing and logistics to international commerce. He unveiled his vision in detail just as Alibaba posted its third consecutive quarter of single-digit revenue growth, reinforcing concerns that a Chinese consumer spending rebound may be farther out than anticipated.
Alibaba’s shares fell 2.4% during premarket trading in New York on Tuesday.
“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,” said Kenny Wen, head of investment strategy at KGI Asia Ltd. “I don’t think the management change signals a big strategy change.”
Zhang will remain head of the cloud business. He took the helm in 2015 after rising to prominence as one of the architects of Alibaba’s ‘new retail’ initiative, intended to marry physical and online retail and extend the company’s dominance into areas from malls to supermarkets. He became chairman a few years later as growth surged and Alibaba at one point became China’s most valuable company.
Then in 2020, regulators cracked down on Ma and his Ant Group Co. after the billionaire angered regulators. Beijing began a clampdown on the privately owned tech sphere shortly after, accusing Alibaba of monopolistic behaviour before levying a record fine for the alleged violations.
The company never regained its growth. It began to lose market share in the cloud, its other engine of growth, to state-backed rivals.