Alibaba reshuffles leadership in response to competitor's triumphant success
Alibaba revamps leadership following intense competition, prompted by a rival's remarkable success
Subscribe to CNN's Meanwhile in China newsletter to stay informed about the country's growth and its global impact. Alibaba has made changes to its top leadership in response to strong competition from a rival company.
Eddie Wu, the CEO of Alibaba Group, will now also lead the company's e-commerce business, taking over from Trudy Dai who has been with the company for over twenty years, according to an internal letter from Joe Tsai, the chairman of Alibaba Group, as reported by CNN.
According to the letter, Dai, who is one of Alibaba's 18 co-founders, will be establishing an asset management company for the group.
Alibaba's (BABA) shares surged by more than 3% in Hong Kong on Wednesday, following billionaire co-founder Jack Ma's call for "change" at the company. This comes as rival PDD's (PDD) dramatic success in China's e-commerce industry has caused a shakeup, with its online shopping platform Pinduoduo and US-based retail startup Temu making significant impact.
PDD's stock has surged 77% this year, propelling it past Alibaba in market capitalization for the first time last month.
The unexpected management change occurred just three months after Wu replaced Daniel Zhang as Alibaba Group's fourth CEO in its 24-year history. He also assumed leadership of the cloud division following Zhang's unexpected departure from the unit.
"Eddie has successfully managed challenging trade-offs and made tough yet crucial decisions," Tsai stated in his letter. "Eddie's leadership of both Alibaba Cloud and TTG will guarantee full dedication to, and substantial and ongoing investment in, our two primary businesses of cloud computing and e-commerce, while also facilitating TTG's evolution through technological innovation."
TTG stands for the Taobao and Tmall Group, encompassing Alibaba's online shopping platforms.
Alibaba's stock has dropped by 18% this year due to ongoing concerns regarding a major restructuring, changes in leadership, and increased competition. In response to the company's nervous performance, Ma recently urged employees to do whatever it takes to help reform the company, even if it means making sacrifices.
Founded in 2015, PDD has had a successful year and garnered global recognition for the launch of Temu, an affordable online superstore that has gained immense popularity in countries like the United States and Australia. Temu offers a wide range of products including home goods, apparel, and electronics.
