Alibaba CEO and Chairman Zhang to step down to focus on cloud business, co-founder Joe Tsai to take over as Chairman

 

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Alibaba Group on Tuesday said on Tuesday that its CEO and chairman Daniel Zhang will step down from the roles to focus on its cloud unit as the e-commerce giant moves ahead with a plan to split into six business units.

Zhang has been concurrently serving in three roles since December when he took over as head of the cloud unit after it suffered an outage that it described as its “longest major-scale failure” for over a decade.

Joe Tsai, co-founder and executive vice chairman, will be appointed as chairman, while Wu Yongming, chairman of Taobao and Tmall Group, will serve as CEO, Alibaba said.

The new 1+6+N business model has basically taken shape, the board of directors of each business group has started operations and several business groups have started their listing and financing plans, it said.

The holding group will mainly take the role of innovation incubation, and Alibaba is “running to the future with a new posture”, it said.

The surprise reshuffle comes after a tumultuous two years that saw Alibaba targeted by increased regulatory scrutiny and after the group announced in March that it would restructure into six units, each with their own boards and CEOs. It also came after Alibaba founder Jack Ma reportedly warned of growing competitions for its shopping malls Taobao and Tmall.

Alibaba is said to have held a communication meeting with senior management of Taobao Tmal Business Group in late May, during which Jack Ma called on the management to open their minds and make bold innovations amid fierce market competition, according to Chinese tech news outlet LatePost. 

Taobao Tmal business Group is currently facing fierce competition and it takes as short of half a year to one year for an industry leader to die, for example Nokia and Kodak, and that could be even faster for an internet company, said Ma at the meeting. 

The successful paths in the past no longer works for Alibaba, they should be changed as soon as possible, and the group should focus on three directions – return to Taobao, return to users and return to internet, Ma said, adding that the structure of the business group should be further flattened.