Alibaba's Daniel Zhang to Leave Top Spot, Replaced by Joseph Tsai

At the end of March, Daniel Zhang launched the so-called “most significantThe shakeup in the 24-year history of Alibaba, one of China's original tech conglomerates, is dividing the company into six separate units that will help it seek public investors.

Now, Mr. Zhang, the tech giant's chairman and chief executive, is stepping down from the top job and about to step down from Alibaba's board of directors, and two of the company's founders have stepped up to leadership positions.

Alibaba announced on Tuesday that Zhang, 51, would be leaving his top job in September. Instead, he will only serve as chief executive of Alibaba's cloud computing division, a position he took up in March when he announced the restructuring. Alibaba announced plans to spin off its cloud division in May, in preparation for a public listing.

Joseph Tsai, 59, an Alibaba veteran with roots in the company's founding, will rise from vice chairman to executive vice chairman chairman. Joining Mr Tsai is another Alibaba co-founder, Eddie Yongming Wu, who will replace Mr Zhang Chief Executive.

“It's like the oldest of the old guard,” said Duncan Clark, chairman of investment advisory firm BDA China in Beijing. “Trusted team, the old guard, back in control.”

The reshuffle comes at a critical time for Alibaba. The company is the highest-profile target of Beijing's crackdown on the power of China's biggest tech firms. Its share price has fallen from its 2020 peak.

Alibaba founder, billionaire Jack Ma, was ousted from the public eye in 2020 after criticizing Chinese regulators for stifling innovation at Ant Group, Alibaba's financial technology sister company. After his remarks, Chinese officials suspended Ant Group's plans to sell shares in an initial public offering. In 2021 China's antitrust regulator fined Alibaba $2.8 billion for preventing merchants from selling their goods on other shopping platforms.

Mr. Ma, a popular figure in China and long coveted company, made a publicized return to China earlier this year just as Alibaba announced its restructuring, which was seen in part as a response to stricter regulations by Beijing.

On Saturday, Mr Ma appeared in a math competition sponsored by Alibaba's research division, according to a post on the institute blog. Although he no longer holds a formal role at Alibaba, Mr Ma remains one of its largest shareholders, with a 4.5 percent stake in the company by 2021, according to company filings.

In a letter to employees on Tuesday, Zhang said that it was time for him to devote his “full attention” to the spinoff plan. He also mentioned the need for a clear separation between his role at Alibaba and the cloud division.

Mr Tsai, the new chairman, has a relationship with Mr Ma that some former employees have described as inseparable. The two met in 1999, when Alibaba was still a free online portal, and Mr. Tsai joined the company that year. He helped Mr. Ma secure seed investments from Goldman Sachs and SoftBank, and managed the company's New York initial public offering in 2014, which was the largest in history at the time.

Alibaba executive vice chairman since 2013, Mr. Tsai is the ultimate owner of the Brooklyn Nets, the National Basketball Association team.

Mr. Elevation Wu, a longtime executive of Alibaba's e-commerce division, signaled to analysts that Alibaba will continue to prioritize online shopping as a core pillar of its business.

Mr. Wu, who is in his late 40s, helped lead Alibaba's transformation from an e-commerce giant to a mobile giant, turning digital payments app Alipay into one of the default forms of payment across China. He will continue to serve as chairman of Taobao and Tmall, Alibaba's two domestic e-commerce businesses.

Mr. Zhang told investors that Alibaba would become less centralized and more efficient by shedding its components. But Alibaba also recently announced the formation of a high-level committee to make decisions on distributing money to new business groups, which some analysts see as a sign that the company is still in business. keep power in the hands of a few key people.

Mr Zhang succeeded Mr Ma as chairman of Alibaba in 2019. Later a rising star in the company, he was the architect behind Singles Day, Alibaba's most successful shopping event. Known for his attention to detail and problem-solving abilities, Zhang is widely regarded as a complement to Ma, who was known within the company for his visionary prowess.

Alibaba is synonymous with online shopping in China. But the company has expanded into businesses ranging from digital payments to delivery services to entertainment. In recent years, it has expanded its e-commerce division and catered for the AI ​​boom with its cloud computing unit.

Jacob Cooke, chief executive of e-commerce consultancy WPIC, said the return of Mr Tsai, who has extensive investments around the world, was a logical choice for Alibaba given its recent international focus.

Last year Alibaba poured $1.6 billion into its e-commerce business in Southeast Asia, according to company records in Singapore provided by VentureCap Insights, a research firm. And last week, it announced plans to launch a localized version of its e-commerce division, Tmall, in Europe.