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Alibaba boss steps down to become boss of Alibaba Cloud

Near-flop of China shopping fest suggests cloud and AI are the priority growth engines

Chinese tech champ Alibaba Group has announced a C-suite reshuffle that will see its CEO depart and take on the somewhat smaller – but perhaps more important – role as leader of Alibaba Cloud.

Announced on Tuesday and pitched as a "succession plan," the reshuffle follows the outfit's March 2023 decision to split into six entities in search of growth.

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The plan will see current executive vice chair Joseph Tsai become chair of the Alibaba Group. Eddie Yongming Wu, chair of Alibaba's e-commerce arms Taobao and Tmall Group, will become CEO.

Current CEO Daniel Zhang will stay on as chair and CEO of Alibaba Cloud Intelligence Group (the full name of the Chinese giant's cloudy operation).

In canned quotes, Zhang said "It has been an incredible honor and privilege to lead Alibaba Group as CEO over the past eight years and chairman over the past four years. This is the right time for me to make a transition, given the importance of Alibaba Cloud Intelligence Group as it progresses towards a full spin-off."

"Looking ahead, I am committed to strengthening Alibaba Cloud Intelligence Group's market leadership by making cloud computing and artificial intelligence more accessible for businesses of all sizes and industries as they continue their digital transformation. The emergence of generative AI has also opened up exciting new opportunities that Alibaba Cloud Intelligence Group is well-positioned to capture."

News of the changes comes a day after China's e-commerce giants offered muted celebrations at the conclusion of the recent "618" shopping festival.

In past years, the massive online malls have happily revealed huge growth in sales and participation during the nation's major sales seasons. This year, as reported by Chinese outlet Technode, e-commerce giants have instead emphasized shifts in buying patterns – to sales driven by video promotions – rather than stunning surges in revenue.

That's been taken as a sign that China's post-COVID economic recovery is not strong, as well as an indicator that the nation's e-commerce sector may have matured.

Alibaba's own Taobao and Tmall have posted tepid growth – one reason for Alibaba's breakup is to help realize the value of the operations.

By contrast, global demand for cloud computing and AI is surging. Putting Zhang in charge of Alibaba's efforts to capture that demand at home and abroad therefore shows the org's intent to put arguably its most storied manager in charge of its best growth opportunity.

Alibaba Cloud is already a powerhouse at home – it holds over a third of the Chinese cloud market according to analyst house Canalys. It's also the third-ranked cloud in some Asian markets.

The cloud already has 15 regions outside China, and execs have previously said they want growth everywhere.

Whether that's possible at a time European and US regulators want Chinese tech booted out of telco networks will soon be Zhang's concern. Maybe even his main problem. ®

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