Alibaba Group Holding looks to usher in a new era of expansion with a former student of founder Jack Ma in charge of its all-important Chinese e-commerce operations.
Trudy Dai, one of Alibaba’s 18 founding members, will take charge of a new China digital commerce team in January, essentially replacing Jiang Fan as head of domestic e-commerce. Jiang will instead lead the international digital commerce team.
Founded in 1999, Alibaba has rapidly become one of the world’s largest online retailers. But with growth slowing to new lows from increased competition and a regulatory crackdown, the company is elevating an influential member of its founding team in hopes of re-energizing the business.
“It has been a difficult year … and it is time for a new start,” Alibaba chairman and CEO Daniel Zhang said in a message to employees Monday.
A series of management and organizational changes were announced the same day, moving the company away from Zhang’s centralized approach to one where the heads of various business units are empowered more. The shift aims to make the company more agile but could weaken Zhang’s influence.
Maggie Wu, who has served as chief financial officer since 2013, will leave that post in April 2022 to oversee sustainability. Wu had played an instrumental role in Alibaba’s stock listings in New York and Hong Kong.
Dai’s appointment, in particular, drew much attention from Alibaba watchers, since domestic e-commerce operations generate a majority of the company’s profits and two-thirds of its revenue.
“Dai has a calm personality, and she is well-trusted by those around her,” a source at the company said. Ma used to be her English teacher before he founded Alibaba, where he was chairman until September 2019.
Dai has been involved mainly in human resources and business-to-business operations so far and has little hands-on experience in digital retailing. But “we can count on her to rebuild weakened organizations and foster talent,” an Alibaba source said.
Meanwhile, Jiang had long been considered a candidate to eventually lead Alibaba. Despite still being in his 30s, he has served for years in key leadership roles at Taobao and Tmall, Alibaba’s main Chinese platforms.
But Jiang was removed from Alibaba’s so-called partnership, which influences board appointments, after a marital scandal broke last year. He remained president of both Taobao and Tmall but has struggled to respond effectively to the rise of rival platforms.
Amid headwinds to its e-commerce business, Alibaba’s revenue is expected to grow at its slowest pace on record for the year ending March 2022, by between 20% and 23%. Many market watchers believe that Jiang and Wu are leaving their posts to take responsibility for failing to chart a clear path for growth.
Under Ma, Alibaba’s business divisions had been highly independent and were encouraged to compete with one another to innovate. But “we started seeing different teams undermine each other and other negative consequences” as the company grew, a source said.
Zhang, who took the reins from Ma more than two years ago, pursued a more centralized structure where he controlled all of Alibaba’s key business operations.
The overhaul was also driven partly by Zhang’s relative lack of clout within Alibaba. The executive began his professional career at PricewaterhouseCoopers in Shanghai and worked at a Chinese game company before joining Alibaba. Some founding members opposed his pick as Ma’s successor, arguing that one of them should lead the company instead.
Ma pushed for Zhang anyway, based on the latter’s numerous achievements since joining Alibaba in 2007. But the decision to put a founding member back in charge of Chinese e-commerce has spurred speculation that Ma could be losing confidence in Zhang.
“Ma may have decided that Zhang alone will not be able to put the company back on track,” an Alibaba source said. Ma remains the largest individual shareholder in Alibaba and still holds significant sway over leadership picks. He is believed to have played a role in Dai’s new appointment as well.
Chinese media report that Alibaba will restructure the company into four divisions: Chinese commerce, international commerce, cloud computing, and services. Each of their leaders is expected to wield significant influence over day-to-day operations, likely at the expense of Zhang’s own influence.
Alibaba has been one of the biggest success stories in China’s fast-growing e-commerce market. But it was forced to suspend a record-breaking initial public offering by financial unit Ant Group in November 2020 and only faces growing pressure from China’s crackdown on its tech sector under President Xi Jinping. Competition with rivals like JD.com is heating up as well, putting the company at a major crossroads.
This article first appeared on Nikkei Asia. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei.