Alibaba co-founder Joe Tsai to take over as chairman as Daniel Zhang steps aside to focus on cloud business
- Zhang is relinquishing his roles as chairman and CEO after steering the tech giant through its transition following founder Jack Ma’s departure
- Tsai will take over the chairman role from Zhang, who previously ran Taobao and is credited with starting the Singles’ Day shopping festival
Zhang will be succeeded as chairman by Joseph C. Tsai, who is currently executive vice-chairman, and Eddie Wu Yongming, chairman of Taobao & Tmall Group, will become CEO. Zhang will continue on at the company as chairman and CEO of Alibaba Cloud Intelligence Group, the company said in a statement on Tuesday. The change will take effect September 10.
“This is the right time for me to make a transition, given the importance of Alibaba Cloud Intelligence Group as it progresses towards a full spin-off,” Zhang said in a company statement.
In an internal memo seen by the Post, Zhang said that it would be “inappropriate” for him to continue serving as chairman and CEO of both Alibaba and Alibaba Cloud as the cloud unit prepares for an initial public offering. “From a corporate governance perspective, we also need clear separation between the board and management team as Cloud Intelligence Group proceeds down the path to becoming an independent public company,” he wrote in the letter.
Zhang “has made exceptional contributions to the development of Alibaba Group since joining the company in 2007”, Tsai said in the company statement. “He demonstrated extraordinary leadership in navigating unprecedented uncertainties affecting our business over the past few years. We believe there is no better leader than Daniel to steer Alibaba Cloud Intelligence Group into the next chapter of its journey and future growth.”
Alibaba’s stock price closed 1.5 per cent lower in Hong Kong on Tuesday, in line with the 1.54 per cent fall for the broader Hang Seng Index, pairing back some morning losses after news of the reshuffle was announced.
Wu became chairman of Taobao & Tmall Group in May, after the business became an independent business unit under the restructuring, a role he will keep after taking over as Alibaba CEO, the company said.
“It is too early to say how much it will change the company,” said Shawn Yang, managing director of boutique investment bank Blue Lotus Capital Advisors. “[Alibaba] is losing market share [across multiple categories] … Jack Ma is anxious about this. It is possible that the founder will impact the company more, just like at JD.com.”
Li Chengdong, founder and chief analyst at Beijing-based e-commerce consultancy Dolphin, said the leadership change “will have a significant impact on Alibaba internally” as a continuation of corporate restructuring. “Business units will need to operate individually, instead of all relying on Taobao’s traffic,” he said. “However, it is still hard to change the competitive landscape. The pressure brought by Pinduoduo and [ByteDance’s] Douyin is high.”
On the sidelines of a digital economy conference where Zhang spoke on Tuesday, employees expressed shock at the announcement.
“It must be a surprise to all Alibaba employees, as we received the email today all of a sudden,” said one Alibaba staff member at the event in Hangzhou who asked not to be named as she is not authorised to speak with news media. “Joe Tsai has been away from Alibaba’s day-to-day business for a few years, and I hope his return will breathe new life into the company.”
Cloud computing has been a particular bright spot for Big Tech firms in recent years, and Zhang has repeatedly said in the past that Alibaba Cloud has high potential.