Behind Alibaba's lightning leadership change: Jack Ma's "advance" and Zhang Yong's "retreat" group | Alibaba | Jack Ma

On June 20th, Alibaba founder Jack Ma appeared at Alibaba Cloud Valley Park dressed in casual attire, accompanied by Alibaba Cloud Intelligent Group Chairman and CEO Zhang Yong and Shao Xiaofeng. Jack Ma occasionally greeted the employees he met and went to the coffee shop with Zhang Yong to buy coffee. Zhang Yong smiled and said, "Put it in my account."

This is an unusual day for Jack Ma and Zhang Yong.

On the morning of that day, Alibaba completed a lightning fast reshuffle: Zhang Yong announced through a letter to all members that, with the approval of the group's board of directors, he will step down as Chairman and CEO of Alibaba Holdings Group on September 10 this year, and will then serve full-time as Chairman and CEO of Alibaba Cloud Intelligent Group. At the same time, with the approval of the board of directors of Alibaba Holding Group, Cai Chongxin, the executive vice chairman of the group, will serve as the chairman of the group's board of directors; Wu Yongming has been appointed as the CEO of Alibaba Holding Group, while continuing to serve as the Chairman of Taotian Group.

On the same day, an employee of Cainiao, an intelligent logistics platform under the Alibaba family, encountered Cai Chongxin, the chairman of Cainiao Group and the newly appointed chairman of the Alibaba Group's board of directors, while working in the office area. The employee said, "Mr. Cai is too hardworking and quickly enters the working state."

From the recent business restructuring of "one to six" to the completion of this management reshuffle, the signal of Alibaba's entrepreneurial veterans moving towards the front desk is very clear. In this adjustment storm, the return of Jack Ma's influence is clearly decisive.

As Alibaba Group President Evans previously stated in an interview, it is expected that as long as Alibaba and Jack Ma are still present, Jack Ma's level of concern for the company will continue to be the same as when he first founded it.

Regarding the significance of Jack Ma's "return", Alibaba insiders did not directly respond to the reporter from Pengpai News. "No founder does not care about their own company, and any major action, regardless of who initiated it, definitely needs the support of Teacher Ma. This is certain."

Another Alibaba insider commented to a reporter from The Paper that in the context of the "one to six" restructuring, group executives no longer need to manage specific businesses, but rather need people with investment backgrounds to operate. Cai Chongxin and Wu Yongming are more suitable.

Jack Ma "enters"

Alibaba's reshuffling has attracted much attention both inside and outside the industry, and Jack Ma, who has been low-key for a long time, has seen a significant increase in exposure in the past three months. Every time he publicly appears, it means that Alibaba will make big decisions.

On March 26th, there were photos online showing Jack Ma driving in the Wenyi Road Tunnel in Hangzhou on Coaster, accompanied by Zhang Yong and Shao Xiaofeng. On March 27th, Jack Ma visited Yungu School, a private school founded by Alibaba's partner. Although Alibaba did not comment on Jack Ma's itinerary, Yungu School told the Paper reporter that Jack Ma had indeed arrived at the school.

Perhaps influenced by the news of Jack Ma's appearance in Hangzhou, Alibaba's Hong Kong stock price rose nearly 5% on the same day. On the second day after Jack Ma appeared at Yungu School, Alibaba announced the construction of a "1+6+N" organizational structure, which includes the establishment of six major business groups and multiple business companies under Alibaba Group, including Alibaba Cloud Intelligence, Taobao Tmall Business, Local Life, International Digital Business, Cainiao, and Da Wen Yu.

According to Alibaba's explanation, choosing to announce organizational adjustments in March is due to the fact that April 1st is Alibaba's new fiscal year, and the core management of various business groups and companies must follow this change, not only planning for next year, but also planning for several years in the future, truly like an entrepreneur facing the entire cycle of development and formulating strategic plans.

With the split of Alibaba, Jack Ma's "appearance" information has significantly increased. For example, in May of this year, it was reported that after the University of Hong Kong hired Jack Ma as an honorary professor, Rwanda Leadership University also announced Jack Ma as a visiting professor at the university. At that time, Alibaba stated that in the past one or two years, Jack Ma had rarely appeared in the public eye, and every time he was photographed, he was looking at agricultural technology.

On the afternoon of June 17th, Jack Ma appeared at the final of the 2023 Alibaba Global Mathematics Competition wearing a duckbill cap to watch the competition. He had an online conversation with the contestants and proposition teachers, discussing mathematics freely. Three days after Ma Yun's public appearance, Ali announced the resignation of Zhang Yong. Cai Chongxin and Wu Yongming from the "Eighteen Arhat" took over as Chairman of the Group's Board of Directors and CEO of Alibaba Group respectively. The handover is still on September 10.

September 10th is Alibaba's birthday and also Jack Ma's birthday. On September 10, 2019, Jack Ma, who was 55 years old at the time, officially stepped down as Chairman of Alibaba's Board of Directors, and was succeeded by 47 year old Zhang Yong. That night, the Hangzhou Olympic Sports Center was fully booked, with over 70000 people present to witness the "transfer of power". The stadium's large screen played Jack Ma's entrepreneurial journey, and the camera captured a photo of him with tears in his eyes.

Alibaba reiterated at the time that Jack Ma's resignation was not a retirement, and he remained the number one employee of Alibaba.

From the 18th Arhat to the West Lake Debate, from the secret creation of Taobao to the complete victory of eBay, from the creation of Alipay to the establishment of Ant Financial Services, from Tmall.com Double 11 to Taobao Creation Festival, from stepping down as the chairman of Alibaba's board of directors to the speech at the second Bund Financial Summit... Looking back on his business career, Jack Ma has many identities, including teacher, entrepreneur, entrepreneur, China's richest man, and the co chairman of the United Nations High level Group for Digital Cooperation. Many of his identities stem from the growth of Alibaba. But Jack Ma also said that the biggest mistake he has made in his life is to create Alibaba.

Jack Ma has gone through three entrepreneurial experiences. The Hangzhou Haibo Translation Agency, founded in 1994, was the starting point of Jack Ma's business logic. "Haibo" is a transliteration of the English word "hope", which Jack Ma explained as "vast hope like the sea". However, the translation agency's business was dismal, and they couldn't afford to pay their monthly rent. The second entrepreneurship was in 1995, when China Yellow Pages was officially launched. The company, along with Jack Ma and his wife, had three employees. That year, he was known as the "scammer who promoted China Yellow Pages everywhere.". The starting point of Alibaba's huge business territory was in 1999, when Ma Yun gathered at his home in the lakeside garden to hold the "Eighteen Arhat" entrepreneurial mobilization meeting. At this entrepreneurial mobilization meeting, Ma Yun set his entrepreneurial vision to become the world's greatest Internet company founded by Chinese people.

It is worth mentioning that Jack Ma raised $20 million from several investment institutions such as SoftBank in January 2000, bidding farewell to the Lakeside Garden community. After moving into a tall office building, Ma Yun also expanded like many entrepreneurs. In 2001, he told 17 "Arhat" that they could only be group managers, and all vice presidents had to be hired from outside.

Ten years later, when looking back on this experience, Jack Ma regarded it as the most regrettable mistake. "The talents hired from outside have all left, and those who have been suspected of their abilities have become vice presidents or directors," said Jack Ma.

Jack Ma once said that founding Alibaba was the biggest mistake in his life, because working in the group took up all of his time. This sentence was later used by netizens as a limerick: regret to create Alibaba Jack Ma, ordinary family Ma Huateng; I don't know if my wife is beautiful, Liu Qiangdong, and Wang Jianlin has nothing.

Over the past 20 years, after several changes of power, Ma Yun still obviously trusts his "old brother". In addition to Cai Chongxin, there are 30 director seats on the board of directors of six major business groups, but the number of directors is only 19, because many of them are cross serving in major groups, among whom Cai Chongxin, Peng Lei, Wu Yongming, Dai Shan and Jiang Fang were the original "Eighteen Arhat" of Ali Venture.

In addition, according to surging journalists, although Shao Xiaofeng, one of the "Eighteen Arhat", did not work in the six business groups, in Ali, people said that Zhang Yong and Shao Xiaofeng were Ma Yun's right-hand men. When Ma Yun appeared in Hangzhou, Shao Xiaofeng accompanied him many times.

Regarding this, Cao Lei, director of the E-commerce Research Center of NetEase, commented, "When Alibaba splits its 1+6+N business, many former veterans can be seen from the partner list. They have returned to the front line, which is not normal, indicating that Alibaba has problems in building its talent pool. Especially after Jack Ma's' return ', Alibaba has made major adjustments and is showing a tendency to break through its bridges. Now that every business of Alibaba is not an absolute leader, Alibaba has a strong sense of crisis."

In recent years, Alibaba has stopped disclosing Jack Ma's shareholding data in its financial reports. According to data as of July 2, 2020, Jack Ma's shareholding had dropped to 4.8%, below 5%. In October of the same year, Jack Ma was removed from Alibaba's board of directors list. However, he remains one of Alibaba's partners. In the Alibaba partnership system, partners nominate the majority of directors on the board of directors, rather than allocating board seats based on the number of shares. Among them, Jack Ma and Chongxin Cai are permanent partners.

Zhang Yong retreated

Compared to Jack Ma, who has a more outgoing personality, Zhang Yong is clearly more introverted. He joined Alibaba in 2007 and led Taobao to achieve profitability at the end of 2009. He was also the founder of the Double 11 E-commerce Shopping Festival, and later incubated "Tmall", bringing Alibaba from the PC era to the mobile era. He also led Alibaba Group's important strategic investments in Suning Yunshang, Intime Commercial Group, and other companies. From September 2019 to September 2023, Zhang Yong's four years in power at Alibaba were a relatively sensitive period, such as the impact of platform economy antitrust.

After Alibaba announced that Zhang Yong would step down as Chairman and CEO of Alibaba Holdings Group in September, some views pointed out that during Zhang Yong's reign, he allowed Pinduoduo to take advantage of the situation and evolve into the "Three Kingdoms Romance" of e-commerce, failing to fight a good resistance war. Zhang Yong bears the main responsibility. In the external interpretation, Ma Yun focuses on e-commerce business and emphasizes returning to Taobao, which is different from the strategy of developing Tmall when Zhang Yong was in office. Because Alibaba's main business Taotian Group was not only challenged by JD and Pinduoduo, but also subjected to competitive pressure from Tiktok, Kwai and other live e-commerce platforms, the cake was cut too much, leading to Zhang Yong's "decentralization".

According to media reports, according to the calculation data obtained from analysts and related companies, the total order GMV of Pinduoduo and Tiktok e-commerce last year has exceeded 50% of Ali's domestic e-commerce business. On the revenue side, in the first three months of 2023, Pinduoduo's revenue has reached 62% of Alibaba's domestic e-commerce business revenue.

In this regard, Mo Daiqing, Director and Senior Analyst of the Network Retail Department of the Internet Economic and Social E-commerce Research Center, believes that based on recent financial report data, the GMV growth of Taobao and Tmall is slightly weak. Although there was a rebound in the first quarter, the ability to attract traffic is dispersed, and growth will continue to be under pressure. Taobao and Tmall are Alibaba's basic stocks, and the weak growth of the base stocks puts great pressure on Alibaba. The change of coach and adjustment is also reasonable.

People from Alibaba pointed out to surging journalists that if you just take a false position such as consultant after leaving office, you can call it "dismissal", but Zhang Yong is obviously not.

Regarding Zhang Yong's resignation, some observers have pointed out that his third war has already begun. The first is to create Tmall, the second is to take over Alibaba, and the third is cloud. Alibaba Cloud clearly has more room for development in the AI era than e-commerce.

It is reported that Zhang Yong also told Alibaba Cloud employees internally that the business model, customer characteristics, and development stage of cloud business are very different from most of Alibaba Group's consumer Internet businesses, and that a new company should be formed that is completely independent of Alibaba Group in terms of equity and corporate governance. Meanwhile, Alibaba Cloud will introduce external strategic investors.

Recently, Alibaba Cloud has launched a series of new measures, including the release of the AI big model Tongyi Qianwen, the launch of core product price reductions and free trial plans, and a significant increase in partner commission rates. According to the latest financial report of Alibaba Group, Alibaba Cloud Intelligence's total revenue in the 2023 fiscal year was 77.03 billion yuan, with an adjusted EBITA profit of 1.422 billion yuan, a year-on-year increase of 24%. It has achieved profitability for two consecutive years.

Spin off is a new beginning for Alibaba Cloud's future entrepreneurship and also a big test for Zhang Yong.

For Jack Ma, before he kept a low profile, he emphasized that he had not retired. "I am not the chairman of Alibaba, but it does not mean that I will no longer start a business, nor does it mean that I will retire. People like us may be destined, and we have no choice, but I want the world to be so beautiful. We should do more, try more, tinker more, and see more." Jack Ma once said in public.