Alibaba is replacing Daniel Zhang as chief executive and chair of the Chinese e-commerce giant, with a top lieutenant to its former boss Jack Ma set to take the reins. Eddie Yongming Wu, an Alibaba co-founder, and chair of Alibaba’s flagship e-commerce sites Taobao and Tmall, will replace Zhang as chief executive in September, the company announced on Tuesday.
Wu served as a special assistant to Ma from 2014 to 2019. Alibaba co-founder and vice-chair Joseph Tsai will fill Zhang’s position as chair of the board. The leadership changes come at a critical time for Alibaba after it announced plans to break up its tech empire in March and refocus on its e-commerce roots. Alibaba will pursue separate listings for its logistics and grocery businesses within the next 18 months and spin off its cloud division.
Zhang, who has served as chief for eight years, is to remain in charge of the cloud unit, which he took over in December as it struggled to maintain growth. “This is the right time for me to make a transition, given the importance of Alibaba Cloud Intelligence Group as it progresses towards a full spin-off,” said Zhang in a statement.
Investors gave the news a cautious welcome. Shares in Alibaba, which had dropped almost 2 percent before the announcement, pared losses to end about 1.5 percent down at the close in Hong Kong on Tuesday. By comparison, the Hang Seng Tech index tracking Alibaba and its peers in the Chinese tech sector dropped 2.5 percent.
Wu became Alibaba’s technical director in 1999, having joined from Jack Ma’s previous venture China Pages, where he worked after graduating from Zhejiang University of Technology. He later held the role of chief technology officer at the payment platform Alipay and then at Taobao.
Wu drove the launch of the Taobao shopping app, which quickly became a critical part of Chinese consumers’ daily shopping habits. He will continue to serve as chair of Tmall and Taobao. “Eddie is a well-trusted pair of hands. He has played a key role in most of Alibaba’s businesses and has a comprehensive understanding of the organization,” said Brian Wong, a former Alibaba executive and author of The Tao of Alibaba.
A person close to company management said: “Eddie is more quiet and analytical. He is not an extroverted personality like Jack Ma. But with Alibaba turning into a holding company of these businesses, you need someone who can think strategically about how they fit together rather than someone who is leading from the front.”
Wu’s appointment raises the possibility of Ma’s deeper involvement again in running Alibaba. The pair are very close, according to people who know them both. Ma at present sits on Alibaba’s partnership committee, which sets the company’s direction but holds no formal position at the company.
In March, Ma returned to the city of Hangzhou where Alibaba is headquartered to help oversee the break-up of the group. At the end of May, he summoned top executives at its e-commerce business to talk strategy and plot a path forward amid an increasingly competitive environment in China, according to Chinese media reports. He warned participants that Alibaba could go the way of former industry giants Nokia and Kodak and urged them to refocus on growing Taobao, the e-commerce platform for smaller and medium-sized merchants.
Zhang’s stint running the Chinese group has been rocky and complicated by Ma’s run-in with Beijing, which led to the cancellation of sister company Ant Group’s blockbuster initial public offering more than two years ago. Since then, Alibaba has been issued with a record $2.8bn antitrust fine and surrendered market share in its core e-commerce business to new competitors such as Pinduoduo and ByteDance’s Douyin.
Zhang said he would now seek to strengthen the cloud business by “making cloud computing and artificial intelligence more accessible for businesses of all sizes and industries”. While the group’s annual sales have risen 11 times and profits are up almost three times since the start of Zhang’s tenure, Alibaba’s share price is roughly flat.
