The Chinese ecommerce giant’s iconic leader, Jack Ma, prepares his exit, hinting at a shift in corporate governance.
Alibaba this month announced its leadership succession plan as Executive Chairman Jack Ma prepares to retire next year. Daniel Zhang, who has served as Chief Executive since 2015, will succeed him. The company said the change in leadership is meant to prevent it from depending too much on one person, and thus support sustainable growth. Jack Ma describes the succession in terms of the company’s evolution: “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,” he said.
Given Ma’s high profile as the face of Alibaba, the company also hastened to add that he will continue to be involved. Ma will serve on the board until 2020, and remain in the Alibaba Partnership, a powerful group of senior managers. Ma also has a more than 6% stake in Alibaba, and by dint of a complicated legal structure, will maintain considerable influence over the company and its affiliates.
Alibaba became one of the world’s biggest and most powerful tech companies under Ma. It dominates ecommerce in China, the largest market of internet users in the world. Hundreds of millions of Chinese use Alipay, its mobile payments platform. In recent years Alibaba’s market capitalization has risen to levels that rival Facebook’s, the New York Times reports. It is also expanding in new markets, and building an empire including physical stores, online video, movies and other ventures.
The imminent leadership succession has generated some uncertainty amongst investors in New York and Hong Kong. It comes at a time of lowered confidence in China’s economic and political conditions. Some have said they are not very concerned about Ma’s departure, but there is speculation over how the transition will affect Alibaba and what insight it may offer into China’s business environment. Shares of Alibaba have fallen in recent months, and there is rising competition in China’s ecommerce sector. Meanwhile the government is tightening its grip on the tech sector.
