The Chinese tech world was struck by unexpected news: Daniel Zhang, former CEO of Alibaba, has stepped down from the helm of the company’s cloud computing division. This decision led to a 3.5% drop in Alibaba’s shares on Monday.
The news caught many off guard. Zhang had led Alibaba as its CEO for eight years, and many expected him to continue steering the company’s cloud sector towards a future spin-off. Instead, Eddie Yongming Wu will take over the leadership of this division, a cornerstone in the Chinese market.
This leadership change marks a significant transition within the Chinese giant. It had already been announced that Zhang would step down as group chairman in favor of co-founder Joseph Tsai, and the CEO role would transition to Wu.
Alibaba’s post-Zhang future looks different. In March, Alibaba had unveiled plans to segment its vast business empire, spanning sectors from e-commerce to entertainment, valued at $230 billion.
Will Alibaba face an uncertain future?
Zhang’s decision to hand over his roles to Wu and Tsai was officially announced on Sunday, surprising many.
Zhang had succeeded Alibaba’s charismatic co-founder, Jack Ma, in 2015 and later as chairman in 2019. His leadership faced intense regulatory pressures. Beijing fined the Chinese behemoth for monopolistic practices, imposing a hefty $2.8 billion penalty.
Now, competitors like ByteDance and Pinduoduo are challenging Alibaba’s primary e-commerce market in China.
Despite these challenges, many commend Zhang’s leadership. In a letter, Joseph Tsai highlighted Alibaba’s resilience and success under Zhang’s guidance.
The Chinese giant’s leaders aim to bolster shareholder trust after witnessing a 70% stock price plunge over the past three years. They believe that restructuring the company will enhance shareholder value.”