Alibaba Chief Takes Over E-Commerce Unit Amid Slower Growth

China’s Alibaba Group Holding is changing the leadership of its core e-commerce business for at least the second time this year, as the sprawling giant cofounded by billionaire Jack Ma contends with slower growth amid rising competition. The company is replacing the chief executive officer of its Taobao and Tmall Group, which generates almost half of Alibaba’s total sales. Trudy Dai, an early founding member of the tech giant who was tapped to run the core unit earlier this year, will be replaced by Eddie Wu, according to an internal memo seen by Forbes. Wu already heads Alibaba’s cloud computing division and is CEO of the entire group. The change allows the company to focus on and sustain significant investments in the cloud and e-commerce divisions, according to the memo. It will also bring in new managers who have developed the necessary experience and skillsets “from the bottom up.”“He [Eddie] navigated tough trade-offs and made difficult but necessary decisions,” group chairman and billionaire Joe Tsai wrote. “He initiated a rejuvenation of our management team by promoting a new generation of leaders and talent.”At the end of last month, cofounder Ma had also called for change. The mogul, who is now ranked the country’s 6th richest person with a net worth of $24.7 billion, isn’t involved in Alibaba’s daily operations after stepping down as executive chairman in 2019, although he still derives almost a third of his wealth from his stake in the company. In a separate internal message seen by Forbes, Ma said the tech giant must “amend itself,” after Alibaba lost its crown as China’s most valuable e-commerce giant to billionaire Colin Huang’s PDD Holdings. Founded in 2015, PDD has used aggressive discounts and effective social media campaigns to win over a large swathe of the country’s budget shoppers. An economic downturn has also aided PDD, as more consumers are now looking for cheaper goods. Huang is currently China’s second-richest man with a fortune estimated at $52.9 billion. Alibaba, meanwhile, spooked the markets by calling off the initial public offering of its cloud unit, marking a major setback to a corporate overhaul announced in March. The company had planned to split into six smaller business units, including cloud and logistics, while allowing each to independently pursue their own funding options. The outgoing Dai was appointed to the e-commerce division shortly afterward. According to the memo, her role in the future would be to help in setting up an asset management company, which will hold some of the group’s non-core assets to boost its return on capital.“This arrangement ensures senior management is not distracted by businesses not pivotal to its future,” the company said on its Alizila blog site. “The internet juggernaut has set itself a target of lifting its return on invested capital into the double digits over the next few years, from a lowly single digit as of the last fiscal year.”


All data is taken from the source: http://forbes.com
Article Link: https://www.forbes.com/sites/ywang/2023/12/20/alibaba-chief--takes-over-e-commerce-unit-amid-slower-growth/


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