Old is not gold for Alibaba, names ‘young’ Daniel Zhang as new chief

It seems founder of one of the world’s largest internet companies-Alibaba-Jack Ma thinks young can accomplish more and handle big roles, especially those born in 1970s.

In a change of guard, Ma announced Daniel Zhang as new Chief Executive of Alibaba, replacing Jonathan Lu.
"Alibaba Group is ready to completely hand over management leadership to those of you who were born in the '70s," Ma wrote in a letter. He said that many other experienced Alibaba leaders would give up some day-to-day control to allow younger executives to rise.

Two years ago when Ma had stepped aside from the Chief Executive’s role, he had said that he was grown too old to run a tech company.

In his letter, Ma added that the company's recent efforts helped a new generation shine. More than 95 % of the management team was born in the '70s and '80s, he noted.

1972-born Zhang, who is with Alibaba since eight years, is well-known among employees for his public speaking skills and charisma.
In Alibaba, there is admiration for Zhang's cosmopolitan management style, in part honed during stints early in his career at Arthur Andersen and PricewaterhouseCoopers.

Some employees at Alibaba were pleased by Zhang's appointment, posting messages on social media accounts welcoming the shift.

Lu, who is only a few years older than Zhang, is scheduled to step down on Sunday, exactly two years after he took over from Ma. Lu will remain on the board.

Many Alibaba employees acknowledge Zhang as one of the most capable of the new generation of leaders, who is attributed to the rise of company’s Tmall shopping site.

Zhang will need all the youthful energy he can manage to steer an e-Commerce company that employs more than 30,000 people across the globe.

During a speech to his employees recently, Ma said the company would strive not to have a net growth in employees over the coming year and instead Alibaba would work to transfer employees between departments and use technology to smooth operations.

Alibaba's shares fell in recent months as Alibaba became involved in a public spat with a Chinese regulator over fake items on its shopping sites but on Thursday, the company's stock rose after the news of the leadership shake-up and the release of the retailer's earnings.

In an earnings statement, Alibaba said its net profit was $463 million in the quarter that ended March 31, down 49 % from the same period a year earlier and below analyst forecasts.

Even though Ma has stepped away from everyday operations of Alibaba, his letter to employees and the recent speech showed that he had a big hand in managing the strategic direction of the company.

Even as Alibaba focuses on managing its rapid growth, Ma will probably be watching the company's biggest rival, Tencent.

Zhang said that merchants who sold on Alibaba's platforms were likely to spend more on mobile advertising down the line. Fifty-one percent of transactions on the company's e-Commerce sites now take place on smartphones.

Meanwhile, Ma welcomed the new Chief Executive with a joke on Zhang's financial and accounting background.

"I am embarrassed that I used to say: 'There's nothing to fear but a CFO pretending to be CEO,'" Ma wrote, referring to a chief financial officer. "Alas, Daniel's background was of a CFO, but he's much, much more."

(Image: Reuters)