Ma, who’s still revered by many of the company’s 200,000-plus employees, struck a markedly more upbeat tone than just four months ago, when he spoke up for the first time in years only to criticise its direction and laud a rival. — Reuters
Jack Ma took to an internal Alibaba forum to voice his support for a company undergoing a turbulent restructuring, emerging from seclusion for the second time in months to try and shore up sagging morale at the Chinese ecommerce pioneer he co-created.
The billionaire, who had retreated from the public spotlight in recent years, penned a lengthy memo in which he blessed efforts by new leaders Joseph Tsai and Eddie Wu to revive a stalled company. He said Alibaba Group Holding Ltd is now on the right track and urged staff to stay the course.
Ma, who’s still revered by many of the company’s 200,000-plus employees, struck a markedly more upbeat tone than just four months ago, when he spoke up for the first time in years only to criticise its direction and laud a rival.
This time, he reiterated calls to think outside the box and escape the “big company trap”. But he emphasised growth was returning and Alibaba was moving forward despite flip-flops over the past year, for instance on first pushing then nixing the listings of its Cainiao logistics arm and US$11bil cloud business. Alibaba’s shares rose almost 4.9% in Hong Kong, or the most in about two months.
“We are starting to operate on the diseases of a big company, returning again from an organisation that makes decisions slowly back to the highest levels of efficiency and a market-first approach, to once again allow the company to be simple and agile,” Ma wrote in a memo that the company also distributed to staff.
“Alibaba may focus on providing valued services to customers vs. achieving internal targets, with a likely focus on ecommerce, cloud and AI which were specifically named in founder Jack Ma’s rare internal company memo dated April 10. This raises the likelihood it will cede fiscal 2025 profit gains to boost revenue growth in select businesses,” said Bloomberg Intelligence analysts Catherine Lim and Trini Tan.
Alibaba, which is grappling with the aftermath of bruising regulatory crackdown and Covid-era turmoil, is trying to revitalise a sprawling empire that spans ecommerce and cloud services. Since ushering out former CEO Daniel Zhang, Tsai and Wu have focused on trying to integrate its separate parts while shedding marginal assets to focus on core businesses.
Ma’s first memo in November was viewed as a signal of a gradual return to public life, breaking about two years of silence after clashing with Beijing. For many Alibaba employees, it’s a welcome change at a time the company is struggling with direction.
Ma didn’t drill down into specifics, or directly address some of the more fundamental questions surrounding the internet company he built into China’s most valuable corporation – before Beijing and Covid wiped out growth.
It’s still bleeding market share to rivals such as PDD Holdings Inc and ByteDance Ltd. At the same time,the likes of Baidu Inc are pushing forward into the potentially transformative AI arena. Alibaba posted a lower-than-projected 5% rise in December quarter revenue – well off the pace of previous years.
In response, the company green-lit a US$25bil buyback program to appease investors. Tsai has said Alibaba will focus on integrating its various businesses and regaining its market dominance, rather than on working through major deals or IPOs.
On Wednesday, Ma referenced a video interview with his longtime lieutenant Tsai. In the chat with shareholder Norges Bank posted last week, Tsai talked about how Alibaba shouldn’t be afraid to admit past mistakes.
Since he took over Alibaba from Zhang, the company has reshuffled the managers at most of its major divisions – including the original commerce arm – and explored the sale of non-core assets such as physical retail operators.
“This path of reform and innovation has never been accompanied by applause, because what we are changing are the bad habits we love the most and what we are reforming is our vested interest,” Ma wrote. He closed with a common refrain of encouragement in Chinese: “Add oil, Alibaba!” – Bloomberg
