Daniel Zhang, the CEO and chairman of Alibaba Group, announced on Tuesday that he will stand aside from both positions to concentrate on the company's cloud business as this Chinese e-commerce giant presses on with its plan to divide into six business segments.
Since taking over as the cloud unit's leader in December, when it experienced a service disruption that it referred to as the "longest major-scale failure" in more than ten years, Zhang has been simultaneously handling three roles.
Eddie Yongming Wu, CEO of Alibaba's Tmall and Taobao Group, will succeed Zhang as CEO, while Joseph Tsai, Executive Vice Chairman, will succeed Wu in the chairman position.
As of September 10, according to Alibaba, both appointments will be in effect.
After a turbulent two years during which Alibaba was intensively targeted by heightened oversight from regulators and after the business stated in March that it will restructure into six parts, each with separate boards and CEOs, the unexpected reshuffle occurs.
The Tmall and Taobao marketplaces are part of its China-focused e-commerce division, which will continue to be fully controlled by Alibaba, while the remaining five units will be spun out. In May, Alibaba stated that it planned to complete the public offering of its cloud subsidiary within the following12 months.
The cloud spin-off was coming to a vital point, according to Zhang, who stated as much in a message to staff. He suggested that now was the ideal time for him to focus exclusively on the business.
As the Cloud Intelligence Group moves closer to being a stand-alone public business, he said that from the perspective of corporate governance, they also require a distinct division of the board and management team. Throughout the spin-off procedure, it would be improper for him to continue acting as both CEO and the chairman of both businesses simultaneously.
Analysts pegged the cloud unit's value at $41 billion to $60 billion, but they also warned that the vast amounts of data it manages might land it in the sights of domestic and foreign regulators.
Singles' Day
A previous accountant, Zhang is credited with creating Alibaba's yearly "Singles Day" shopping festival. Zhang entered Alibaba in 2007. Since 2015, he has held the position of CEO, and in 2019, he assumed the chairmanship, taking over from the co-founder of Alibaba, Jack Ma, in both positions.
Alibaba congratulated Zhang for his outstanding leadership in guiding the company through the recent period of unprecedented uncertainty.
Following the news, Alibaba's Hong Kong-listed shares declined 1.5%, in line with a 1.6% drop in the benchmark index, as analysts saw the reorganization as being consistent with the overall restructuring already stated.
Wu, who co-founded Alibaba with Ma and Tsai more than 20 years ago, will continue to hold the dual positions of chairman of Tmall and Taobao Group, according to Alibaba. He has served in the past as the chairman of Alibaba Health and the chief technical officer of Alipay.
Competition
Ma, the most well-known businessman in China, hasn't been seen in public since late 2020, following a speech during which he criticized Chinese legislation and which is largely believed to have triggered a subsequent crackdown.
Ma departed the Chinese mainland in late 2021 and was captured in photos in Thailand, Australia, Japan and Spain. He returned in March, one day before Alibaba declared its restructuring. Throughout that time, he has not spoken anything in public.
Ma is Alibaba's largest shareholder and is deeply committed to the business, according to J. Michael Evans, president of Alibaba. He also said that Ma was teaching at a university in Tokyo and also staying longer in China.
According to Chinese tech news outlet LatePost on Monday, Ma called a meeting with executives from Tmall and Taobao Group in which he talked about the need to put users, the internet and Taobao -- whose merchants are primarily individuals or small companies -- back in the spotlight in order to stay relevant and highlighted the fierce competition.