What signals have been released? The two founders that Jack Ma trusted most, "Arhat", took over Alibaba CEO | Group | Jack Ma

After making several semi official appearances and returning to the spotlight, Jack Ma suddenly took a sharp turn and Alibaba Group completed a lightning fast reshuffle: 51 year old Zhang Yong handed over his scepter four years after reaching the peak of power; Cai Chongxin and Wu Yongming, the two "18 Arhat members" that Ma Yun trusted most, took over as Chairman of the Board of Directors and CEO of Alibaba Group respectively.

On June 20, Zhang Yong, chairman and CEO of Alibaba Holding Group, announced through a full-time letter that with the consent of the group's board of directors, Zhang Yong will step down as chairman and CEO of Alibaba Holding Group on September 10 this year. Zhang Yong will then serve as chairman and CEO of Aliyun Intelligence Group. At the same time, with the approval of the board of directors of Alibaba holding group, Cai Chongxin, executive vice chairman of the group, will serve as chairman of the board of directors of the group; Wu Yongming will serve as CEO of Alibaba holding group, and will continue to serve as chairman of Taotian group.

This is clearly not a traditional sense of turnover between old and new classes. 48 year old Wu Yongming is not much younger than 51 year old Zhang Yong, and his more prominent label - a member of the founding team of Alibaba, employee number 004 of Alibaba, with the nickname "Dongxie" - is something that Zhang Yong cannot replicate. Cai Chongxin, one of the "Eighteen Arhat", is also the right arm of Jack Ma, the founder of Alibaba. He and Jack Ma are the permanent partners of AliWeier. This combination of candidates to take charge of Alibaba Group after the "one split six" is a new decision made by Jack Ma to cope with the new competitive environment in the e-commerce industry.

What does this decision mean for Alibaba? What signals are released to the Internet industry?

Two "Arhat" take charge of Ali Group

Cai Chongxin and Wu Yongming are clearly a more trusted pair by Jack Ma.

It goes without saying that Cai Chongxin. 59 year old Cai Chongxin currently serves as the Executive Vice Chairman of Alibaba Group, a member of Alibaba Group's Capital Management Committee, and Chairman of Cainiao Group. Cai Chongxin is also Jack Ma's most trusted entrepreneurial veteran and the only permanent partner of Alibaba besides Jack Ma. After graduating from Yale University, Cai Chongxin worked as a lawyer and private equity investor. In 1999, he co founded Alibaba with Jack Ma. In 2014, he led the company to go public in New York and later became responsible for strategic investment work. A more well-known thing for basketball fans is that in 2019, Cai Chongxin officially became the owner of the United States NBA team, the Nets.

Foreign media described Cai Chongxin as a close comrade of Jack Ma. "As co founders, Cai Chongxin has a close relationship with Jack Ma and may have more influence than outgoing Zhang Yong, which can help drive Alibaba's plan to spin off and put the e-commerce business back on the growth track."

The Wall Street Journal reported that in the early stages of Alibaba, Cai Chongxin helped Alibaba secure investments from Goldman Sachs and SoftBank, and established an internal venture capital team from scratch. Analysts at Swiss Union Private Bank believe that Cai Chongxin is very popular among investors, and his appointment as chairman of the board should be considered good news.

On June 20th, on the day when Alibaba Group announced the change of leadership, a Cainiao employee encountered Cai Chongxin, the chairman of Cainiao Group, who was currently working in the office area. The Cainiao employee said, "Mr. Cai is too hardworking and enters the working state very quickly."

Compared to Cai Chongxin, Wu Yongming's presence at Alibaba has not been strong in recent years. Some Alibaba employees have told reporters that they have never heard of him, and another Alibaba Health insider has said that "with little contact, people are very good.". Some Alibaba employees also talked to the surging news reporter about their impression of Wu Yongming, saying, "I only know he is very wealthy," "basically doesn't show up in public," and "insiders call him Wu Mama. It is said that this nickname was derived from working with Teacher Ma on National Wealth Communication. At that time, they lived in a dormitory, and each dormitory had a" mom "," a big shot who took a long-term "vacation", a programmer with free wealth, "and" it was Alibaba Mama's business incubated by him. "

How did Wu Yongming get along with Jack Ma? How to become one of the founders of Alibaba?

In the article published in 2016 by "Tsinghua Wudaokou Financial EMBA", it was mentioned that Wu Yongming, who graduated from university in 1996 and majored in computer science, was the first batch of people in China to contact the Internet. One day, he casually flipped through the Qianjiang Evening News and found a recruitment notice. A company called "China Yellow Pages" was recruiting programmers. After joining the company, Wu Yongming realized his wish to surf the Internet for free every day. Later, Wu Yongming recommended another "October 8th Arhat", Shi Yufeng, one of the founders of Taobao, to Ma Yun.

The stories of successful entrepreneurship are always similar, with a group of like-minded friends starting from scratch and moving forward for a common dream. 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, including Wu Yongming. At this entrepreneurial mobilization meeting, Ma Yun set his entrepreneurial vision to become the world's greatest Internet company founded by Chinese people. In this Internet company, Wu Yongming is the technical director.

On May 10, 2003, Taobao was launched. Due to the lack of trust between the two parties in the remote transaction, the situation has been delayed. Alibaba launched Alipay on the basis of Taobao. Alipay was separated from Taobao in 2004. Wu Yongming also became the chief technology officer of Alipay that year, and served as the director of Alimama's business department of the Alibaba cash flow platform in November 2005, and was promoted to general manager in December 2007.

It has been rumored in the industry that Wu Yongming has had two experiences of "dedicating himself to entrepreneurship", one during the start-up period of Alibaba and the other during the incubation period of Alibaba Mama. However, the online advertising trading platform Alibaba Mama only went through two and a half months of official operation from its official launch on June 18, 2008 to its integration into Taobao on September 4. This year, under the "Big Taobao" strategy, Wu Yongming began serving as the Chief Technology Officer of Taobao. In 2011, Wu Yongming once again took charge of his familiar advertising business, serving as the head of Alibaba Group's search, advertising, and mobile business.

In 2015, Alibaba gave the operating rights of Tmall's online pharmaceutical business to Alibaba Health. After the major integration, Alibaba Health became a subsidiary of Alibaba Group, and Alibaba Health's management underwent a major overhaul. Wu Yongming served as the Chairman of Alibaba Health's Board of Directors and non-executive director. In 2020, 49 year old Zhu Shunyan took over as the chairman of Alibaba Health's board of directors, and Wu Yongming continued to serve on the board as a non-executive director due to his intention to focus on other business affairs.

It is worth noting that in 2015, Wu Yongming founded Yuanjing Capital, focusing on early start-up companies and investing in both RMB and USD, with a total management scale of over 10 billion RMB. The investment projects include Ideal Automobile, Tuya Intelligence, Huamai Taike Fourier Intelligence, etc. In addition, during his tenure at Alibaba, he served as a special assistant to Jack Ma, then Chairman of the Alibaba Group's Board of Directors, from September 2014 to September 2019.

Wu Yongming once talked about the importance of investing in technology companies for Alibaba in a media interview. "Investing in cutting-edge technologies is necessary, and whether Alibaba can demonstrate better market competitiveness ultimately depends on the support of underlying technologies such as storage, chips, and memory. In the future, all underlying technologies will gradually be developed by Chinese companies themselves, in order to achieve the world's best cost-effective and most stable service."

Foreshadowing: Taotian Group begins to "return"

Considering Zhang Yong's previous upgrade path from CEO to Chairman, the outside world has also given Alibaba's current reshuffle a sense of "baton exchange".

Since the establishment of Alibaba Group, Wu Yongming has been the fourth CEO of the group. In May 2013, Lu Zhaoxi took over from Jack Ma and became the CEO of Alibaba Group. "In the future, I will not return to Alibaba as CEO. If I were to return, I would not come back. Because it is useless for me to come back, you will do better."

In May 2015, two years later, Lu Zhaoxi stepped down and former Group COO Zhang Yong became the third CEO of Alibaba Group. Jack Ma stated at the time that this also marked that Alibaba Group would be fully controlled by the post-70s generation.

Zhang Yong's identity underwent another change in 2019, and he also served as the Chairman of Alibaba's Board of Directors.

On September 10, 2019, the 55-year-old Jack Ma stepped down as chairman of Alibaba's board of directors, and the 47-year-old Zhang Yong was concurrently CEO and chairman. This is what Jack Ma has repeatedly mentioned as "carefully prepared for 10 years. plan". On that day, Ma Yun sang a song "Life in Blooming" in black leather with black sunglasses and dirty braids, and sang the song "Youraisemeup" with the flavor of "inheritance" with Zhang Yong. In his speech, Ma Yun stressed that today is not Ma Yun's retirement, but the beginning of a system inheritance. Today is not a person's choice, but the success of a system.

For this takeover, Wu Yongming said, "Thank you to the Alibaba Group Board of Directors for their trust in me. It is an honor to replace Zhang Yong as the CEO of Alibaba."

Not only the CEO, but also Alibaba's headquarters, the spun off Taobao and Tmall Group, will continue to be controlled by Wu Yongming. After this adjustment, he will continue to serve as the Chairman of Taotian Group. Wu Yongming said, "For the past 24 years, Alibaba has been innovating through self evolution and breakthroughs, and each change has given rise to new growth. Our recent changes have brought about new organizational and governance structures, but Alibaba's mission has never changed."

With the implementation of this group level reshuffle, looking back more than two months ago, Alibaba announced the "one dismantling six", which seems to have laid the groundwork for the current "handover".

At that time, Alibaba Group announced the establishment of six major business groups and multiple business companies, including Alibaba Cloud Intelligence, Taobao Tmall Business, Local Life, International Digital Business, Cainiao, and Da Wen Yu. In addition to serving as the chairman of Taotian Group, Wu Yongming also serves as a director of the local lifestyle group and the international digital business group.

Alibaba's headquarters, Taobao and Tmall, are also attracting more attention from Jack Ma.

Recently, it was reported that in late May, Jack Ma convened various business leaders of Taotian Group to hold a small-scale communication meeting. Dai Shan, CEO of Taotian Group, Wang Hai, Liu Peng, Liu Yiman, three heads of the Industry Development Department, and Cheng Daofang, head of Taobao Live, all attended. Jack Ma stated at the meeting that the methodologies that Alibaba relied on for success in the past may no longer be applicable and should be quickly changed. He pointed out three directions for Taotian Group: returning to Taobao, returning to users and returning to the Internet. In addition, Jack Ma believes that Taotian should further flatten its organization.

The importance of Taotian Group to Alibaba is self-evident.

Alibaba Group's Chief Financial Officer, Xu Hong, pointed out at Alibaba's financial report in May that "the main funding for Alibaba Group in the future will also come from Taobao and Tmall Commercial Group." Xu Hong stated that Taotian Group generated $25 billion in free cash flow in the 2023 fiscal year, and believes that natural cash flow will be even stronger in the future.

At present, Ali's domestic e-commerce business has become the most extensive online trading platform in China. The total number of Taobao users has exceeded 900 million, almost approaching the upper limit of China's Internet population. On such a scale, where is the growth of Taotian Group's business and how to deal with the competition from Pinduoduo, JD and Tiktok, Chairman Wu Yongming and CEO Dai Shan of Taotian Group need to come up with answers. Under the guidance of Ma Yun's "Return to Taobao, Return to Users, Return to the Internet", 618 e-commerce has been greatly promoted this year, and Taotian Group has begun to re support small and medium-sized businesses.

In the interview, more than one employee of Taotian Group told reporters that they did not have a better understanding of Wu Yongming, the "new boss". "Some strategies and actions still need to be seen," said one employee.

"Eighteen Arhat" returned to the power center of the Ali system

Another highlight of this change of leadership of Ali is that under the background of "one demolition and six" of Alibaba, Ali "18 Arhat", who started his business together more than 20 years ago, returns to the center of power again.

List of six major business groups approved by the board of directors of Alibaba Group

According to the previously announced candidates for the board of directors of Alibaba's six major business groups, the number of board members for each of the six business groups is 5: Zhang Yong also serves as the CEO of Alibaba Cloud Intelligent Group; Dai Shan serves as the CEO of Taobao and Tmall Commercial Group; Yu Yongfu serves as the CEO of the local lifestyle group; Wan Lin continues to serve as the CEO of Cainiao Group; Jiang Fan serves as the CEO of International Digital Business Group; Fan Luyuan serves as the CEO of Da Wen Yu Group. Among them, Peng Lei, Wu Yongming, Jiang Fang, Wu Zeming, Jiang Fan, Dai Shan and others hold cross positions in different business groups.

There are 30 director seats on the board of directors of six business groups, but the number of directors is only 19, because many of them are cross serving in major groups, among which Cai Chongxin, Peng Lei, Wu Yongming, Dai Shan and Jiang Fang are the original "Eighteen Arhat" of Ali Venture.

Zheshang Securities pointed out in the research paper that Ali, a leading Internet company in China, has been established for more than 20 years, and its business covers e-commerce, cloud computing, local life, logistics, etc. In recent years, due to the macroeconomic and policy environment, as well as intensified competition, the growth of the company's e-commerce and cloud computing businesses has been under pressure, and the pressure on performance has also led to sustained low valuations.

Zheshang Securities believes that "one split and six split" can give each business greater vitality. Each business has changed from reporting to the CEO of the group to reporting to the board of directors of each business company, and has the opportunity to go public independently. We believe that the separation of the organization and the business is expected to make the value of each business explicit and reshape the value of the company. Further, if the transformation of production relations leads to productivity gains and reshapes core business competitiveness, it is expected to boost market confidence and bring about a recovery in long-term valuations. It is expected that the growth rate of e-commerce CMR revenue is expected to turn positive under the warming of macro consumption and the slowing of competition margin, and the cloud business is expected to return to medium-speed growth under the stimulus of macro warming and AI demand.

It seems that Jack Ma still has to rely on his entrepreneurial brothers to fight this battle.