FB Pixel no scriptAlibaba Group CEO Eddie Wu to take over company's e-commerce unit | KrASIA

Alibaba Group CEO Eddie Wu to take over company’s e-commerce unit

Written by Nikkei Asia Published on   3 mins read

Trudy Dai has been replaced as the group faces fierce competition in two key segments.

Alibaba Group is undertaking another management reshuffle as its core businesses face increasingly intense competition, with Trudy Dai stepping down as CEO of e-commerce unit Taobao Tmall Commerce Group, the company’s biggest source of revenue.

Dai, a former student of founder Jack Ma from his teaching days, will be replaced by Eddie Wu, Alibaba Group CEO and acting CEO of its cloud unit. Both Dai and Wu helped found Alibaba.

The reshuffle is intended to “drive efficient strategic alignment and significant investment of resources across our core commerce businesses,” said Alibaba Group chairman Joe Tsai in an internal letter seen by Nikkei Asia.

“Our brand-new environment calls for a brand-new strategy and change in our organizational principles and systems. We must confront our past and change ourselves for the future,” Tsai said in the letter shared with employees on Wednesday.

Despite being a co-founder, Wu was little known until the June management reshuffle, when he took over the group CEO role from Daniel Zhang. In a surprising move, Zhang stepped down as head of the cloud division in September—the biggest management shakeup since the conglomerate announced an ambitious restructuring plan in March.

Zhang’s move was seen as a sign that Ma, after a year in the wilderness, was reasserting control over the company he founded. Ma had spent a year traveling and generally keeping a low profile after a dramatic confrontation with the Chinese government in 2020, which led to the halt of the planned public listing of fintech arm Ant Group.

However, questions have been raised over Alibaba’s ability to move forward under new blood. “The morale in the company is very low, as we don’t see a future at this moment. The biggest concern for some of us is that we don’t see a clear successor taking us forward,” a senior manager at Alibaba told Nikkei.

Dai will leave Taobao and Tmall Group and will assist in establishing an asset management company as part of “Alibaba’s ongoing efforts to improve return on capital and enhance shareholder value,” according to the letter.

“Eddie’s leadership of both Alibaba Cloud and Taobao and Tmall Group will ensure total focus on, and significant and sustained investment in, our two core businesses of cloud computing and e-commerce,” Tsai said.

“We will empower a new cohort of management leaders who have developed fundamental skill sets and experience from the bottom up. By doing so, we create a culture of innovation that will foster our new generation of talent,” he added.

Alibaba’s e-commerce empire is facing unprecedented pressure from domestic rival Pinduoduo. Once the most valuable Chinese company listed in the US, Alibaba’s market capitalization was surpassed by that of Pinduoduo’s parent company PDD Holdings in the past month, a rise so rapid that it even prompted Jack Ma to address employees’ concerns with a vow to “reform” the company.

At the same time, Alibaba’s cloud business—once a bright spot for growth—is also struggling as it gradually loses market share to Huawei and other rivals. In the past 12 months, Alibaba Cloud has experienced two outages, leading some users to approach other rival cloud service providers, according to an executive from a top Chinese tech company.

Last month, Alibaba reversed the plan to fully spin off its cloud unit, citing tougher US controls on chip technology, an excuse that failed to convince some analysts. Alibaba’s shares plunged after the move was announced.

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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