The end of an era

By Zhang Ye Source:Global Times Published: 2013-1-17 22:33:01

 

 
From left: Zhang Yong, Peng Lei and Lu Zhaoxi Photos: CFP
From left: Zhang Yong, Peng Lei and Lu Zhaoxi Photos: CFP
 
 
Ma Yun Photo: CFP
Ma Yun Photo: CFP 
 

Forty-eight-year-old Jack Ma Yun, the founder and CEO of China's e-commerce giant Alibaba Group, made a big decision Tuesday.

He told his employees via e-mail that he is scheduled to step down from his post as CEO and will become the group's full-time chairman by May 10, passing the reins of Alibaba Group, which grew into one of the largest and most successful Internet companies in the world under Ma's 14 years of leadership, to "a younger, better equipped Alibaba person."

This surprising turn of events has aroused much speculation about who will be the company's successor along with an equal measure of concern regarding the future development of Alibaba in the hands of a new leader.

Building a diverse Alibaba

"I am no longer 'young' for the Internet business," Ma wrote in an e-mail sent to his staff Tuesday, noting that his successor would be named by May 10 when most of Alibaba's top executives - the majority of whom were "born in the 1960s" - would step down to make way for the company's next generation of leaders.

Back to 1999, Ma, a former tour guide and English teacher, resigned from his post at the China International Electronic Commerce Center under the Ministry of Commerce (the former Ministry of Foreign Trade and Economic Cooperation) and founded Alibaba Group in Hangzhou, East China's Zhejiang Province.

Guided by Ma and the group's other decision-makers, Alibaba grew quickly as the scope of its business expanded beyond the B2B e-commerce market.

In the third quarter of 2012, Alibaba accounted for 42.3 percent of the total revenue generated by China's B2B e-commerce market, while its B2C platform Tmall and its C2C platform Taobao grabbed 54.6 percent and 94.53 percent of their respective markets, according to data from research firm iResearch.

The group also stepped into the Internet portal arena when it acquired Yahoo Inc's business in China and has even begun tapping the financial industry by providing loans to retailers who sell their goods on its Tmall and Taobao platforms.

But as the Alibaba empire grew larger and more diverse, Ma conceded in a recent interview by the New York Times that he was feeling the pressure, adding "When I was 35, I was so energetic and fresh-thinking. I had nothing to worry about."

Heir unapparent

Ma believes the best thing for him to do is to "coordinate with ones who are better than me," and "be a good teacher" focused on setting strategy and promoting social responsibility.

Alibaba refused to reveal any information about possible CEO candidates when contacted by the Global Times.

Peng Lei, an Alibaba co-founder, chief human resource officer and CEO of Alibaba's online payment platform Alipay; Lu Zhaoxi, Alibaba's executive vice president and chief data officer; and Zhang Yong, CEO of Tmall, are likely to be the top three contenders, said Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting, who based this surmise on opinions being circulated by industry insiders.

Feng Dahui, a former Alibaba staff member, said on his Weibo that "only Peng Lei is more qualified and capable of shouldering the whole of Alibaba."

However, Lu Zhenwang said that the new CEO is likely to be Lu Zhaoxi.

"Although Lu Zhaoxi is not one of the co-founders, he entered the group early in 2000 and has worked in nearly all of its divisions, allowing him to gain support from company personnel across all ranks. Besides, he held important posts in a variety of operations, which has helped him cultivate an overall vision - a significant feature for a CEO," said Lu.

An online poll launched on the domestic news portal ifeng.com had Peng Lei in the lead to run Alibaba by a 2-to-1 margin ahead of Lu Zhaoxi as of press time. A report posted on the portal identified Peng as the second most influential executive at Alibaba after Ma, a fact which some say could give her a top seat at the company.

Bright future

Analysts still believe that Ma's resignation after 14 years of success as CEO will ultimately be a beneficial move for Alibaba.

Alibaba's next CEO, no matter who is ultimately selected, will no doubt be able to keep the company moving in a positive direction, given that Ma has recently restructured Alibaba to promote flexibility, setting the tone for future progress, Su Huiyan, an industry analyst from iResearch, told the Global Times.

As a chairman, Ma will continue to influence the company's broad strategic moves, which will likely keep the company on an even keel for some time, said Su.

The CEO change could further Alibaba's plans for an initial public offering (IPO) on the Hong Kong Stock Exchange, given the problems which have long faced Ma in the US capital market, said Lu Zhenwang.

An offshore listing from Alibaba would likely attract a great deal of investment from the US, where the company has been listed as an "immoral" business for years by the Office of the United States Trade Representative due to the sale of fake and counterfeit goods on its platforms in the past, he explained.

Lu also noted that it is easier for a business to list publicly if its chairman and CEO positions are held by two different people - Ma has held both roles at Alibaba for the past 14 years.

The group has its sights set on launching an IPO on the Hong Kong Stock Exchange before the end of 2013 and expects Goldman Sachs to underwrite the offer, Bloomberg reported Wednesday.

Gu Jianbin, PR director of Alibaba, told the Global Times Thursday that the group has not hired any investment banks for a public float and refused to comment on whether Alibaba had an IPO in the works for 2013.

 

 

 



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