Game of musical chairs at Alibaba: The Chinese e-commerce giant on Tuesday announced the unexpected resignation of its CEO Daniel Zhang and his internal successor, which entails a complete restructuring of the group.
Founded by charismatic businessman Jack Ma and a pioneering e-commerce company in China, Alibaba has a long history of success in the country.
But in recent years, the group has come under the scrutiny of the authorities after massive regulatory tightening against technology giants.
After many turbulent months, Alibaba announced the biggest restructuring in its history in March, just as the government appeared to be easing the pressure.
Against this backdrop of upheaval, Daniel Zhang is stepping down as CEO and chairman of the board, the company announced on Tuesday.
He will be replaced on the board by Joseph C. Tsai, Alibaba’s current executive vice president.
Eddie Yongming Wu, who runs the group’s main consumer e-commerce applications (Taobao and Tmall), will become the new CEO.
These changes will take effect from September 10, Alibaba said.
However, Daniel Zhang remains at Alibaba and leads the cloud computing industry.
The 51-year-old is the one who took charge of the Alibaba empire following the departure of its founder, Jack Ma, in 2019.
Big change
In addition to e-commerce, Alibaba is a heavyweight in the Chinese tech sector with activities in logistics, cloud computing, but also media, entertainment and artificial intelligence.
These changes come after several years of turmoil in the technology industry. Alibaba has been particularly targeted by authorities tightening their regulations on industry giants.
Alibaba was the first company to be fined by the authorities.
At the end of 2020, Beijing halted a gigantic IPO (around $34 billion) of Ant Group, Alibaba’s finance and payments subsidiary, in Hong Kong 48 hours before the event.
The following month, Alibaba was investigated for anti-competitiveness. These setbacks had severely impacted the company’s profitability in 2022.
However, the Chinese authorities appear to have eased in recent months and are taking a more forgiving stance towards the sector amid the economic slowdown.
In January, the Chinese authorities therefore gave the Ant Group the green light to raise more than one billion euros in Hong Kong.
Alibaba, in turn, announced a reorganization in March that will split the group into six separate entities with the aim of listing them separately on the stock exchange, a major change for the company.