Alibaba Group Holding, the Chinese e-commerce giant, announced on Tuesday that its Chairman and CEO Daniel Zhang will step down from those roles and focus on the cloud business, as the company faces regulatory hurdles and intense competition.
Zhang will be replaced by Joe Tsai, the executive vice chairman, as the new chairman of the board, and by Eddie Wu, the chairman of online marketplace Taobao and Tmall Group, as the new CEO and director of the board. The changes will take effect on Sept. 10, the company said in a statement.
Zhang, who joined Alibaba in 2007 and became its CEO in 2015, said he decided to transition from his current roles to concentrate on Alibaba Cloud Intelligence Group, the cloud computing arm of the company, which he will continue to lead as its chairman and CEO.
“This is the right time for me to make a transition, given the importance of Alibaba Cloud Intelligence Group as it progresses toward a full spinoff,” Zhang said.
Alibaba Cloud is one of the fastest-growing segments of the company, generating 16% of its total revenue in the fiscal year ended March 31. The company said it plans to spin off Alibaba Cloud as an independent entity in the future.
The leadership reshuffle comes at a time when Alibaba is facing multiple challenges, including Beijing’s crackdown on the tech sector, which has resulted in a record $2.8 billion antitrust fine for Alibaba in April and a suspension of its affiliate Ant Group’s $37 billion IPO in November.
The company is also facing fierce competition from rivals such as JD.com, Pinduoduo and Meituan in the e-commerce market, as well as from ByteDance and Tencent in the social media and entertainment sectors.
Alibaba said it was confident that the new leadership team will steer the company through the changing environment and achieve its long-term vision and mission.
“We have full confidence that under Joe’s leadership as our new chairman of the board, and with Eddie joining our board and taking over as our CEO, they will carry on Daniel’s vision and values,” said Jack Ma, Alibaba’s co-founder and former chairman. “With their strong experience and passion for our businesses, there is no better team than them to lead Alibaba into the future.”
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