According to the new CEO of Alibaba Group, the e-commerce and cloud behemoth will embrace artificial intelligence (AI) and elevate younger individuals to senior management as it undertakes the most comprehensive restructuring in its history.
“Alibaba must change with the times” Eddie Wu, who took over as CEO on Sunday, stated in a memo to colleagues that CNN obtained.
In the 24-year history of Alibaba (BABA), Wu took Daniel Zhang’s place as the company’s fourth CEO. Following Zhang’s abrupt departure from the organization, he also assumed leadership of the cloud division.
Wu outlined the company’s long-term objectives in a memo on Tuesday, including finding new development opportunities in the face of a difficult economic climate and increasing competition from rivals.
“Looking forward, Alibaba’s two main strategic focuses will be ‘User First’ and ‘AI-driven,’ he said. “We will recalibrate our operations around these two core strategies and reshape our business priorities.”
“Over the next decade, the most significant change agent will be the disruptions brought about by AI across all sectors,” he added. “If we don’t keep up with the changes of the AI era, we will be displaced.”
Alibaba will be divided into six distinct units, including cloud, e-commerce, logistics, media, and entertainment, in accordance with a March announcement. Each division will have its own CEO and board of directors, and the majority of them will be able to pursue independent public offerings or funding.
Alibaba surpassed analyst forecasts in its first-quarter profits report last month, but the combination problems of growing competition and a slowing Chinese economy have made it difficult for the company to recover from a two-year regulatory crackdown.
The Chinese version of TikTok and PDD Holdings’ Pinduoduo are two low-cost platforms that domestic e-commerce users are increasingly using, pushing Alibaba’s domestic e-commerce arm to concentrate on value-for-money markets.
Late on Sunday, Alibaba also disclosed that Wu would succeed Daniel Zhang as CEO of its cloud computing division.
Additionally, Alibaba will age its executive team. Within the next four years, it wants to promote people born after 1985 to make up “the core of its business management team.”
According to him, Alibaba would increase its strategic investments in three areas: internet platforms powered by technology, AI-driven tech companies, and international commerce networks. Additionally, it will look for “open and collaborative relationships,” even with businesses that it has historically viewed as rivals.