Alibaba names new Taobao and Tmall CEO in major move to fend off competition

Alibaba Group Holding is reshuffling the top ranks of its most important profit earner since its sweeping restructuring started over half a year ago, as it tries to regroup after its value fell behind rival PDD Holdings.

Eddie Wu Yongming, chairman of Alibaba’s Taobao and Tmall Group (TTG), will become the chief executive of the combined e-commerce group from Wednesday, adding to his responsibilities as CEO of Alibaba Group and its cloud computing unit, according to a letter signed by Alibaba’s chairman Joe Tsai that was seen by the South China Morning Post.

“Eddie’s leadership of both Alibaba Cloud and TTG will ensure total focus on, and significant and sustained investment in, our two core businesses of cloud computing and e-commerce, as well as enabling TTG to transform through technology innovation,” Tsai wrote.

Trudy Dai Shan, who was appointed CEO of Taobao and Tmall in March, will step aside to lead a team that sets up an asset management company for Alibaba, according to the letter by Tsai, who is also chairman of SCMP Publishers, owner of the Post.

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The reshuffle came two weeks after PDD, which runs the Chinese discount shopping platform Pinduoduo, surpassed Alibaba in market value. Morgan Stanley downgraded Alibaba, the Hangzhou-based company, over a slower turnaround in its key business.

PDD – founded 16 years after Alibaba’s establishment – was valued at US$197.2 billion, more than Alibaba’s US$187.8 billion, based on Tuesday’s New York closing prices.

The rise of PDD even elicited a response from founder Jack Ma, three years after his retirement as Alibaba’s executive chairman. PDD, which also runs Pinduoduo’s global platform Temu, posted a 94 per cent increase in its third-quarter revenue, outpacing Alibaba’s 9 per cent sales growth in the same period.

The billionaire praised PDD for the “decisions, execution and efforts” that helped the upstart vault past Alibaba, according to his internal memo to staff.

Each of the business units would face the test of market forces individually, and find their own path to compete, including the possibility of seeking their own fundraising avenues through initial public offerings (IPOs), Alibaba said while announcing the reorganisation. The business units would separately set up their own boards of directors.

Wu, 48, a founding member of Alibaba Group, has highlighted artificial intelligence and client service as the future for Alibaba.

The stock price of Alibaba has dropped three-quarters from its peak in late 2020, even as the e-commerce giant has delivered steady revenue and profit growth. Its operating profit in the September quarter rose 34 per cent from a year ago to 33.6 billion yuan (US$4.75 billion), double PDD’s earnings in the same quarter.

South China Morning Post