As the Chinese e-commerce giant moves forward with its plan to split into six business units, Daniel Zhang, the company Alibaba’s new CEO and chairman, will step down from his roles. In December, Zhao took over as head of the cloud unit after it suffered its “longest major-scale failure” in over a decade.
Eddie Yongming Wu will become CEO of Alibaba’s Taobao and Tmall Group, while Joseph Tsai will replace Zhang as chairman.
Alibaba said both appointments will take effect on Sept. 10.
Alibaba announced in March that it would restructure into six units, each with its own board and CEO, after a turbulent two years that saw increased regulatory scrutiny.
Alibaba’s China-facing e-commerce division, including Taobao and Tmall marketplaces, will remain wholly owned, but the five other units will be spun off, with Alibaba aiming to list its cloud unit in the next 12 months.
The cloud spin-off was approaching a crucial stage, Zhang wrote in a memo to staff seen by Reuters, and now is the right time to focus on it.
As Cloud Intelligence Group becomes an independent public company, we also need clear separation between the board and management,” he said.
It would be inappropriate for me to serve as chairman and CEO of both companies simultaneously during the spin-off process.”
According to analysts, the cloud unit is worth $41 billion to $60 billion, but regulators could target it because of the reams of data it oversees.
Alibaba’s role in Daniel Zhang
He was the architect behind Alibaba’s “Singles Day” shopping festival, which was launched in 2007 after he joined Alibaba as an accountant. Since 2015, he has served as CEO and chairman, succeeding Alibaba co-founder Jack Ma in both roles.
A statement from Alibaba thanked Zhang for “extraordinary leadership in navigating unprecedented uncertainties affecting the company’s business.”
Analysts view the reshuffle as being in line with the overall restructuring previously announced, as Alibaba’s Hong Kong-listed shares fell 1.5% after the announcement.
It is likely that instilling Alibaba founders Joe and Eddie as chairman and CEO will ensure a smooth leadership transition and maintain Alibaba’s culture under the new structure since the group will play a smaller role in setting strategies for the six business groups. Eric Chen, an independent analyst who publishes on Smartkarma in Shanghai, said.
Besides serving as chairman of Taobao and Tmall Group, Wu previously served as chief technology officer of Alipay and chairman of Alibaba Health.
Competition is on the rise
China’s best-known entrepreneur has remained out of the spotlight since late 2020 after a speech criticizing Chinese regulations, which led to a crackdown.
After leaving mainland China in late 2021, he appeared in photographs in Japan, Spain, Australia and Thailand, and returned in March, a day before Alibaba announced its restructuring.
Alibaba shares rise as founder Jack Ma returns to China after a year away
According to Alibaba president J. Michael Evans, Ma remains Alibaba’s biggest shareholder. He is teaching at a university in Tokyo and spending more time in China.
According to Chinese tech news outlet LatePost, Ma convened a meeting with leaders of the Taobao and Tmall Group on Monday to discuss severe competition and the need to focus on users, the internet, and Taobao – whose merchants are mostly individuals or small businesses – to stay relevant.
The company did not respond to Reuters’ request for comment on the LatePost report.
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