Alibaba chief steps down as $294 mn deal announced
Alibaba chief Jack Ma stepped down on Friday before a potential initial public offering as the Chinese online retail giant announced a $294 million stake purchase in digital mapping firm AutoNavi.
Alibaba, the world’s largest online retailer, said it bought a 28 per cent stake in Nasdaq-listed AutoNavi, its second big purchase in as many weeks.
The deal follows Alibaba’s $586 million purchase of an 18 per cent stake in China’s dominant microblog provider Sina Weibo, a separate transaction that was announced on April 29.
The moves come before an expected initial public offering by Alibaba, which analysts say could value the group at between $60 billion and $100 billion, prompting comparisons with Facebook’s blockbuster IPO.
At a company event in Hangzhou city, 48-year-old Ma handed over the reins of the company to Lu Zhaoxi - previously executive vice president -reaffirming his decision announced four months ago to step down as chief executive officer.
“From tomorrow I will have a new life and life will be my job. I sincerely ask everyone to support Lu Zhaoxi like you have supported me and trust Lu like you have trusted me,” Ma told 30,000 employees and clients at the event.
Lu said he would carry on the mission of Alibaba by making the company transparent and responsible.
Ma will still provide strategic direction but he told the audience that he aimed to focus on education and environmental protection.
In the deal unveiled Friday, Alibaba and AutoNavi would form a strategic alliance to develop “location based” e-commerce opportunities, according to a joint statement on AutoNavi’s website.
“Now is the time to be aggressive on some of these deals because it’s a lot easier when they’re private than it’s going to be when they list,” said Bill Bishop, a columnist for The New York Times’s DealBook.
Alibaba operates China’s most popular e-shopping platform, Taobao, which has more than 90 per cent of the online market for consumer-to-consumer transactions. Taobao has more than 800 million product listings and over 500 million users.
Alibaba aims to expand beyond its home market by targeting overseas Chinese through Taobao, an executive told a news conference Friday at the company’s headquarters in Hangzhou.
“We hope to provide services to markets of overseas Chinese consumers first so we can have the experience and ability to further promote Taobao in other markets of non-Chinese consumers,” said Daphne Lee, director of overseas business for Taobao.
Such a move could potentially make Taobao, which also marks its 10th anniversary Friday, a threat to US giants eBay and Amazon.
