"We wouldn't be surprised if there were new management changes in the future. ”
In the face of Temu's parent company, Pinduoduo (PDDO) and other rivals are putting pressure on Chinese tech giant Alibaba (BABAn、9988.HK) has once again announced a management change that gives Alibaba's chief executive officer (CEO) more authority to manage the company's core e-commerce business.
The company announced on December 20 that the company's board of directors approved Wu Yongming, CEO and chairman of Taotian Group, to serve as CEO of Taotian Group, effective on the same day. Taotian Group (Tmall) is the core of Alibaba's retail business in China. This appointment also extends the scope of Wu Yongming's management, in addition to the company's CEO and Taotian Group's CEO, he is also the head of Alibaba Cloud Intelligence Group. On September 10, he succeeded Daniel Zhang as chairman and CEO of Alibaba Cloud Intelligence Group**.
In an internal all-staff letter seen by Barron's, Alibaba Chairman Joe Tsai wrote: "Facing the past, facing the future, and changing ourselves, I believe that Alibaba has undergone this round of transformation as it has done before." Wu Yongming's appointment will "promote efficient strategic synergy and high-intensity resource investment in the relevant sectors of the group's core e-commerce business". Tsai added: "The appointment of Wu Yongming as the number one position of Alibaba Cloud and Taotian will help lead Taotian's transformation with technological innovation, and help ensure the group's unified command and high-intensity continuous investment in the two strategic priorities of e-commerce and cloud." ”
After a tumultuous year, Alibaba has once again turned to the adjustment mode and placed Wu Yongming in a key position in the key division of Taotian Group. In March 2023, Alibaba announced a business spin-off, transforming from a group company to a holding company, in an effort to unlock value for shareholders. Since September, Wu has served as Alibaba's chief executive officer and director. Then, in November, Alibaba's restructuring and spin-off plans were uncertain, and Alibaba decided not to move forward with a complete spin-off of the Cloud Intelligence Group due to US restrictions on chip exports to China.
Restructuring plans and management changes have made it a difficult year for Alibaba, and the volatility of the macroeconomic and consumer environment has put Alibaba's core retail business under significant pressure. The company's market share has been being lost to lower-priced rival Pinduoduo, which recently surpassed Alibaba in market value to become China's most valuable e-commerce company.
As for Wu's decision to serve as CEO of Alibaba, CEO of Cloud Intelligence Group and CEO of Taotian Group, we think it means that Alibaba may want to go back to its roots and focus on leveraging the strengths of its technology and ecosystem to power the business," Citi analyst Alicia Yap wrote in a memo. ”
Wu Yongming's appointment as the CEO of Taotian Group conveys that Alibaba has refocused its business focus on the retail business and promoted the company's most important revenue to continue to grow. However, investors' enthusiasm seems to have waned, and Alibaba's U.S. stock price fell by 14%, slightly better than the S&P 500's performance on the day.
Text |Barron's contributor Jack Denton
Edited by Lin Yidan
Copyright Notice: Barron's original article, without permission, may not**. For the English version, see December 20, 2023** "Alibaba Sees Another Management Shakeup." can it get its e-commerce mojo back?”。
The content of this article is for informational purposes only and does not constitute any form of investment and financial adviceThe market is risky and investors should be cautious. ）