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In a rare and surprising internal memo, Alibaba co-founder Jack Ma has urged Alibaba Group Holding Ltd. to embark on a journey of fundamental change. The billionaire, who has been less involved in day-to-day operations since 2020, unexpectedly responded to a staff post on Alibaba’s internal forum, expressing the need for significant transformations across the company.
Ma commended decisions made by rival PDD Holdings Inc., acknowledging their successful efforts to capture market share from China’s e-commerce giant. Despite the challenges, Ma expressed confidence that Alibaba would “correct its course” in the evolving landscape of the AI era for e-commerce.
“Every great company is born in a winter,” Ma wrote in his brief message. “As the AI era for e-commerce gets underway, it’s an opportunity for everyone as well as a challenge.”
Alibaba is currently facing internal and external turmoil, with a slower-than-expected economic recovery and emerging rivals like PDD and ByteDance posing threats to its once-dominant online retail business. The company has undergone significant internal changes, including a plan to break up into six smaller entities and the departure of then-CEO Daniel Zhang. Longtime Ma confidantes Joseph Tsai and Eddie Wu were brought in to lead the company, and the spinoff of its $11 billion cloud arm was unexpectedly shelved.
The specifics of Ma’s call for change within Alibaba remain unclear, but the unusual memo indicates his perceived need to address the company’s workforce directly. This move suggests a more public role for Ma, who had maintained a low profile in recent years due to Beijing’s crackdown on his businesses. Notably, Ma recently established a new company, Hangzhou Ma’s Kitchen Food, focusing on processing and selling farming products.
Following Ma’s encouraging comments, Alibaba’s shares saw a narrowing of losses in Hong Kong. The memo came after PDD reported robust financial results, with an 18% surge in stock value driven by strong revenue growth, especially through the success of the US shopping app Temu.
PDD’s remarkable growth has surpassed that of Chinese rivals, including Alibaba, highlighting its ability to attract cost-conscious consumers amid economic uncertainty. The company’s market value of $176 billion is now approaching Alibaba’s $190 billion, marking a significant shift in fortunes. Ma acknowledged PDD’s achievements in his memo, emphasizing the importance of reform and adaptability for sustained success in the ever-evolving business landscape.
