Alibaba Group appoints Eddie Wu as CEO of its e-commerce business to boost growth and compete against rising rivals like Pinduoduo, after being surpassed in market value.
CEO Eddie Wu Takes Lead in Core E-commerce Business
Alibaba Group announced that its CEO Eddie Wu will now oversee its core e-commerce business, taking over from Trudy Dai. Dai, a longtime executive at Alibaba and one of its founding members, will be involved in establishing an asset management company to improve returns on capital and enhance shareholder value.
Competition from Pinduoduo and Market Value
The reshuffle comes as PDD Holdings Inc., the parent company of Pinduoduo and Temu, has exceeded Alibaba’s market value in the last month. Pinduoduo’s market capitalization of its U.S.-listed stock reached $199.41 billion, surpassing Alibaba’s $191.75 billion. This shift in market value has prompted a need for a new strategy and organizational change at Alibaba, as acknowledged by Chairman Joe Tsai in an internal letter.
Response and Restructuring
Alibaba’s founder, Jack Ma, recently acknowledged Pinduoduo’s growth, emphasizing the need for a fresh strategy and organizational changes at Alibaba. Tsai, in response, expressed the necessity for a new environment at the company. Following the announcement, Alibaba’s stock in Hong Kong rose by 3.5% in trading on Wednesday. The company previously restructured its businesses in March, creating six units intended to raise their own capital and eventually go public. Additionally, plans for an IPO by its cloud unit were scrapped due to uncertainties related to U.S. export curbs on advanced chips used for artificial intelligence.