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Alibaba Group Replaces CEO Zhang In Efforts To Reignite Growth In Post-Covid Era

Executive Vice Chairman Joseph Tsai takes over as chairman while Eddie Wu becomes CEO of Alibaba, aiming to revive the company's market share.

Alibaba
Credits: Getty Images

Alibaba Group Holding Ltd. is undergoing a significant leadership shake-up as it strives to regain its footing in the Chinese e-commerce market and stimulate growth after the challenges posed by the Covid-19 pandemic.


Longtime confidant of billionaire co-founder Jack Ma and Executive Vice Chairman Joseph Tsai will step into the role of chairman, replacing the eight-year veteran chief, Daniel Zhang. Furthermore, Eddie Wu, currently chairman of Alibaba's core Taobao and Tmall online commerce divisions, will assume the position of chief executive officer for the $240 billion company.


Zhang's unexpected departure comes after Alibaba's recent announcement of a six-way restructuring initiative aimed at revitalising growth and establishing independent leaders for various business sectors, including cloud computing, logistics and international commerce. The strategic move was made as Alibaba faced concerns over its third consecutive quarter of single-digit revenue growth, raising doubts about the timing of a rebound in Chinese consumer spending.

Eddie Wu, who will be the new CEO of Alibaba Group Holding Ltd.
Credits: Alibaba Group Holding Ltd.

Kenny Wen, head of investment strategy at KGI Asia Ltd., pointed out that the new CEO and chairman are all co-founders of Alibaba and have a close relationship with Jack Ma. This suggests that Ma will continue to be the influential figure and spiritual leader of the company. Wen believes that the management change does not indicate a significant shift in strategy. Zhang will maintain his position as the head of the cloud business, a role he assumed in 2015 after playing a key role in Alibaba's "new retail" initiative, which aimed to integrate online and physical retail and expand the company's dominance across various sectors.


However, Alibaba's growth trajectory shifted in 2020 when regulators cracked down on Jack Ma and his Ant Group Co., prompting Beijing to take action against the privately owned tech sector. Alibaba faced accusations of monopolistic behavior and was hit with a substantial fine for the alleged violations. Since then, the company has struggled to regain its previous rapid growth, facing competition from new players like ByteDance Ltd. and PDD Holdings Inc., which have eroded its core business. Additionally, state-backed competitors have gained ground in the cloud market, further impacting Alibaba's growth potential.


Willer Chen, a senior research analyst at Forsyth Barr Asia, commented on the return of "old Alibaba management," expressing uncertainty about whether this is beneficial for the company considering the need for new growth drivers and the ongoing restructuring plan.

 
  • Alibaba Group Holding Ltd. replaces CEO Daniel Zhang with Joseph Tsai as chairman and Eddie Wu as CEO.

  • The leadership change aims to revive market share and growth in the post-Covid era.

  • Alibaba announced a six-way restructuring plan to foster growth across various sectors.

  • Concerns arise as Alibaba posts third consecutive quarter of single-digit revenue growth.

  • The new CEO and chairman maintain close ties with co-founder Jack Ma.

  • Zhang will continue to lead the cloud business.

  • Regulatory crackdowns and increased competition have impacted Alibaba's growth.

  • Analysts express doubts about the return of previous management and the need for new growth drivers.

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