Putting Tsai, a long-time confidant of founder Jack Ma, in charge should help steady the ship. With each of the spun-off units operating independently, the holding company will have far less to do than in the past.
That’s because the parent will largely comprise Taobao, as well as the group’s cash and investments. So it makes sense for Wu, who runs the Taobao unit, to also be CEO of Alibaba Group.
It’s now up to him to reignite growth at Alibaba’s cash cow, and if not then Tsai will be tasked with finding someone who can.
ALIBABA CEO DANIEL ZHANG’S FATE
This does seem like a demotion for Zhang. It’s hard to view his removal from the chairmanship of a US$240 billion company as anything else.
But there’s another way to look at it. Zhang is a lion at the company.
He helped propel Tmall – the online store for branded products – and Taobao, the more general marketplace, through some boom years, including the invention of the 11.11 Singles’ Day shopping event. He’s been a chief financial officer and a chief operating officer, which makes him a well-rounded executive.
Cloud computing has offered great promise to Alibaba and rivals including Tencent and Huawei. But the potential has yet to be realised, with Alibaba Cloud continuing to lose money.
If Zhang turns it around and produces sustained profits, then he’ll be the hero in charge of what could grow to become worth just as much as the parent is today. If it fails, then his future at the company will be in doubt.