Update: Era Ends as Alibaba Founder Jack Ma Prepares to Step Down
Jack Ma will retire as chairman of e-commerce giant Alibaba Group Holding Ltd. next year, marking the end of an era with the departure of one of China’s earliest internet pioneers.
Ma, who is also one of China’s richest men, will be replaced in his chairman’s role on Sept. 10, 2019, his 55th birthday, by current CEO Daniel Zhang, the company said in a statement Monday. The year will also mark the 20th anniversary of Alibaba’s founding. The company said over the weekend that Alibaba will announce a succession plan, but had not provided more specifics.
Ma will continue to stay on as a member of Alibaba’s board until its annual general meeting in 2020, the company said.
“I have put a lot of thought and preparation into this succession plan for 10 years. I am delighted to announce the plan today thanks to the support of the Alibaba Partnership and our board of directors,” Ma said in a letter included with the statement. “This transition demonstrates that Alibaba has stepped up to the next level of corporate governance from a company that relies on individuals, to one built on systems of organizational excellence and a culture of talent development.”
The carefully considered plan should help to reassure shareholders about Alibaba’s future after the departure of such a central figure, said Brock Silvers, managing director and media analyst at Kaiyuan Capital.
“Ma will undoubtedly remain an extremely influential voice in the company’s high level strategic planning, and CEO David Zhang will transition into the chairman role over the course of a year,” he said. “This will provide great continuity for the company as it transitions away from its legendary founder. And Ma is to be congratulated for creating and empowering an accomplished management team in a business culture that often concentrates immense authority in the hands of a single founder or a small clique.”
A former English teacher, Ma founded Alibaba in an apartment in his hometown of Hangzhou, Zhejiang province, in 1999. From its early roots as a business-to-business marketplace, he gradually built the firm into a powerhouse that currently dominates Chinese e-commerce with more than half of the mainland market. In the course of doing that, he has created one of the world’s most valuable internet firms, with a current market value of about $420 billion.
In 2013, Ma stepped down as Alibaba’s CEO but retained the chairman’s position. He has continued to play an active role at the company, including overseeing its record-breaking $25 billion initial public offering (IPO) in New York in 2014.
He has also seen the company through a number of low points, including one shortly after its IPO that saw the government accuse it of hosting pirated goods on its popular Taobao marketplace. The ensuing scandal saw Alibaba’s share price tumble, and its name has appeared in the last two editions of an annual U.S. list of notorious online marketplaces for pirated goods.
Alibaba and many of China’s other top internet firms are closely linked to their founders, leading some to worry that their performance could suffer when those founders eventually leave. A recent scandal involving Alibaba’s chief rival, JD.com Inc., spotlighted the importance of that relationship, with the company’s shares shedding 14% last week after news broke that founder and CEO Richard Liu is under investigation for rape allegations in the U.S.
The talkative Ma has been the face of Alibaba from the start, and has become one of China’s most recognizable businessmen not only at home but also around the world. He frequently speaks at global events and has met personally with numerous world leaders, including former U.S. President Barack Obama and current President Donald Trump.
Ma emphasized throughout his retirement letter that one of his key roles over the next year will be grooming Zhang, who became CEO of Alibaba in 2015, to take over at the helm of the country’s largest internet company. He has previously said he would like to move into philanthropy after his retirement, and also to return to his earlier love of teaching.
“Since the founding of the company in 1999, we have been of the view that Alibaba’s future will need to depend on ‘droves of talent’ to enable us to iterate on our management succession plans,” Ma wrote. “After years of hard work, today’s Alibaba has a world-class talent pool in quality and quantity. The teacher in me feels extremely proud of our team, our leadership and our unique mission-driven culture, as well as the fact that we continue to develop exceptional business leaders and professional talent like Daniel Zhang.”
In reality, Zhang has already taken over many of Alibaba’s operations, including its new retail strategy that has seen the company invest billions of dollars in brick-and-mortar store operators over the last two years, said Jia Mo, a Canalys technology analyst.
“After Ma’s departure, he will continue to have influence over Alibaba in different ways, but the company’s top management team will become younger,” he said. “The internet industry changes extremely quickly, and Jack Ma has all along sought to expend all his energy to keep innovating.”
Despite Ma’s announced plans to depart, at least some suspect he will continue to play a role at the company that has become so closely linked to him. “Jack Ma’s significance to Alibaba has long surpassed his position,” said an official at a major global hedge fund. “How could the new chairman not listen to him?”
Ma himself acknowledged that he will always be part of the company he founded, even after his departure next year when Alibaba officially celebrates two decades in business. “The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba,” he wrote in his retirement announcement.
To read more coverage on Jack Ma’s retirement, click here
Contact reporter Yang Ge (firstname.lastname@example.org)
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