Alibaba Group, China's e-commerce powerhouse, has announced a massive management shakeup as it reorganizes into six distinct business groups to keep up with rapidly developing technology.
Even though limitations due to the COVID-19 outbreak were lifted half a year ago, the Chinese economy has been slowing down recently, according to CBS News. Thus, these measures are also meant to stimulate development.
The Major Management Reshuffle
On Tuesday, June 20, the company stated that Eddie Wu, the head of its e-commerce division, would succeed Daniel Zhang as CEO.
The cloud computing unit of Alibaba, which has been cleared for the spinoff and is anticipated to be listed for trade within a year, will then have Zhang as its CEO and chairman.
Joseph Tsai, the current executive vice chairman of the Alibaba Group, will take over for Zhang as chairman. Tsai is the chairperson of Alibaba-owned Hong Kong tabloid South China Morning Post and the owner of the NBA basketball franchise, the Brooklyn Nets. He was born in Taiwan but now resides in Canada. In the late '90s, he was a co-founder of Alibaba.
When the firm was first established in 1999, Wu was serving as its chief technology officer (CTO). In addition to his roles as CTO of Alibaba's Taobao and Alipay and chairman of Alibaba Health, he served as special assistant to Alibaba co-founder and former board chairman Jack Ma from 2014 to 2019.
Five of Alibaba's six business units, excluding the main e-commerce sector, will be able to seek external funds and go public as a result of the company's reorganization. The new policies will be implemented on September 10.
Zhang, who replaced Ma as chairman of Alibaba Group in 2019, was named CEO of the company in 2015. He is famous for starting the Singles' Day shopping festival, which is currently the biggest internet shopping event in the world.
Alibaba's stock in Hong Kong fell by approximately 1.5% on Tuesday after the announcement.
Amid a crackdown on the digital sector, the Chinese government has increased its inspection of Alibaba in recent years, according to ABC News.
Beijing Restricts the Former Chinese Richest Billionaire
In a report by CBS News, after loudly criticizing China's authorities and financial institutions at an address in Shanghai in October 2020, Jack Ma has maintained a low profile and made few public appearances. Ma is the firm's most well-known co-founder and formerly China's wealthiest man.
Shortly after that, the authorities blocked Ant Group, a financial subsidiary of Alibaba, from going public. It was supposed to raise $34.5 billion in the biggest share sale in history, but that plan was scrapped.
As Chinese authorities tightened controls on the country's once-unrestricted digital sector, Alibaba was eventually hit with a $2.8 billion punishment for antitrust violations.
Following years of encounters in Europe, Japan, Thailand, and Hong Kong, Ma finally returned to China in March.
