Alibaba Group announced on Wednesday that its CEO, Eddie Wu, will take over as chief executive of its domestic e-commerce arms, Taobao and Tmall Group.
This new role will consolidate Wu’s control over the company’s most important businesses. The change comes as Alibaba combats slow growth and rising competition.
Eddie Wu’s Expanding Role
Effective immediately, Eddie Wu assumes the role of Chief Executive for Taobao and Tmall Group, in addition to his current responsibilities as Group CEO. Wu previously took charge of the company’s cloud business in September, succeeding Daniel Zhang.
This recent appointment solidifies Wu’s leadership over Alibaba’s two crucial business divisions, cloud and domestic e-commerce. Alibaba’s domestic e-commerce platforms, Tmall and Taobao, have historically held the position of China’s largest.
However, recent years have seen them lose market share to emerging competitors like Pinduoduo, a subsidiary of PDD Holdings. Economic uncertainty and a slow retail recovery post-COVID-19 have fueled what the previous CEO of Taobao and Tmall Group, TrudDai, described as a “value for money battle.”
Alibaba’s Hong Kong-listed shares responded positively, trading 3% higher following the announcement of Wu’s takeover, indicating investor confidence in the leadership changes.
As part of Alibaba’s bigger strategy, CEO Eddie Wu last month briefed analysts about conducting a review to distinguish between “core” and “non-core” businesses.
Core businesses, as Wu emphasized, will be the focal point for long-term investment, research and development, and enhanced user experience. In a regulatory filing, Alibaba disclosed plans to establish a new asset management company with a focus on operating the group’s non-core assets.
Ongoing Efforts and Future Outlook
Trudy Dai, the former CEO of Taobao and Tmall Group, will transition to a role supporting the creation of the new asset management company. This move aligns with Alibaba’s commitment to improve return on capital.
The establishment of the asset management company and the shift in leadership represent significant steps in the ongoing efforts to adapt to market dynamics.
In May, Alibaba announced its cloud division would be among the first units to spin-off, but that IPO plan was shelved last month due to uncertainties around U.S. export controls on AI chips.
The cloud business remains one of Alibaba’s most important assets going forward, along with its domestic e-commerce operations, which are now under Wu’s control.
The restructuring follows the largest organizational change in Alibaba’s 24-year history in March, where the company was divided into six units managed by the group as a holding firm. The initial plan to spin off the cloud unit and take it public was announced in May.
However, it was recently shelved due to uncertainties surrounding U.S. restrictions on exports of chips used in artificial intelligence applications. The company remains adaptable in navigating challenges and is poised to leverage its renewed leadership structure to drive growth and resilience in a rapidly evolving market.
