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Alibaba can advance in 2023, says CEO, after China’s COVID U-turn

Written by Nikkei Asia Published on   3 mins read

Daniel Zhang takes greater control of tech group’s important cloud business.

Alibaba Group Holding can “advance” in 2023, Chairman and CEO Daniel Zhang told staff Thursday, suggesting the Chinese company hopes to move on from a period of turmoil caused by Beijing’s crackdown on the tech sector.

“The key word for the new year prospects I wrote down earlier this year is ‘firm and stable’… as we begin 2023, I hope the key word for the new year will be ‘advance,'” Zhang said in an internal letter to employees that also referenced China’s abrupt U-turn on its zero-COVID strategy.

“As the country enters a new phase of living with COVID, and as the country points out the future direction of the platform economy, we are more convinced that the only way to solve many of the problems we encounter today is to develop ourselves,” Zhang wrote.

The e-commerce conglomerate will strive to be a “good company” to answer Beijing’s call to “lead the development, create jobs, and participate in international competition,” he said.

Zhang also moved to take closer personal control of Alibaba’s important cloud division, revealing he would become acting president of Alibaba Cloud Intelligence.

Executives and senior technicians from Alibaba were summoned by Shanghai police in July after the force—which was storing data on an Alibaba private cloud server—suffered what appeared to be one of the biggest data breaches in history. It reportedly involved information about 1 billion Chinese citizens, sources told Nikkei Asia previously.

Earlier this month, Alibaba Cloud’s service also suffered what the company described as “the longest large-scale outage in more than a decade” in Hong Kong.

“For cloud computing, stability and security are the most basic responsibilities to customers, and we must always live up to the trust and reliance of our customers,” Zhang said in the email.

Jeff Zhang, who has stepped down as the cloud business chief, will focus on his role as head of the Alibaba DAMO Academy and will continue to have responsibility for Alibaba’s proprietary chip development team and its Internet of Things (IoT) initiatives.

Zhang’s message comes after a torrid 18 months for Chinese tech companies during which Beijing levied heavy fines and other penalties on companies including Alibaba, wiping hundreds of billions of dollars from listed companies’ values. Alibaba drew a record USD 2.8 billion antitrust fine last year, while its founder Jack Ma has kept a low profile since drawing authorities’ ire with criticism of the country’s financial regulators in late 2020.

Alibaba’s share price dipped to a record low of HKD 60.25 (USD 7.73) in October amid China’s economic slowdown and foreign investors’ fears over the country’s regulatory uncertainties, before rising along with other Chinese tech companies in November.

With the economy battered by three years of strict zero-COVID measures, China’s top leaders pledged to “support platform companies in international competition” at the annual central economic work conference in mid-December, a message that was welcomed by the industry. So far no specific measures have been taken.

A few days after the central economic conference, Yi Lianhong, the new communist party secretary of Zhejiang province, visited the headquarters of Alibaba in Hangzhou, where he urged the group to be a “leader of innovative development.” Yi was the most senior official to publicly visit Alibaba since President Xi Jinping’s sweeping crackdown on the tech sector.

Zhang also announced other personnel changes in the company. Wu Zeming, 42, has taken on the role of Alibaba’s chief technology officer, replacing Cheng Li, and Jane Jiang will succeed Judy Tong as group chief people officer on April 1, 2023.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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