SHANGHAI, Sept 12 (Reuters) – New Alibaba Group CEO Eddie Wu has told employees that the tech giant’s two main strategic focuses will be “user first” and “AI-driven”, according to an internal letter reviewed by Reuters.
Wu, who sent the letter on Tuesday, on his third day in the top job, said Alibaba would focus on promoting younger employees, particularly those born after 1985, to make up the core of business management teams over the next four years.
This will help maintain a “start-up mentality” and prevent the company from being “stuck in our old ways”.
The new CEO, one of Alibaba Group’s founders and a longtime lieutenant of former chief Jack Ma, is laying out his strategic priorities at a key moment for Alibaba, which is undergoing the biggest organizational restructuring in its 24-year history.
Alibaba also announced late Sunday that Wu will replace Daniel Zhang as CEO of its cloud computing unit.
The news came as a surprise to many, as Zhang had said in June that he was stepping down as CEO of Alibaba Group to focus on its cloud division, which is targeting an IPO by May 2024.
Cloud Intelligence Group, valued at $41 billion to $60 billion this year, is one of five units Alibaba is spinning off as part of its restructuring.
The cloud unit is Alibaba’s second-largest source of revenue after domestic e-commerce and the group’s generative artificial intelligence model, Tongi Qianwen.
“Over the next decade, the most significant change agent will be AI-driven disruption across all sectors,” Wu said in the letter.
“If we don’t keep up with the changes in the AI age, we’ll be displaced.”
Alibaba beat analysts’ expectations in its first-quarter earnings report last month, but its recovery from a two-year regulatory crackdown has been complicated by the twin challenges of rising competition and a slowing Chinese economy.
Economic developments have helped drive more domestic e-commerce customers to lower-cost platforms, such as PDD Holdings’ ( PDD.O ) Pinduoduo and ByteDance’s Douyin, the Chinese version of TikTok, prompting Alibaba’s domestic e-commerce arm to focus on value for money. department
The cloud unit reported revenue growth of 4% in the quarter, the smallest of the group’s six business units, but analysts estimate it is China’s largest cloud provider with a 34% market share, ahead of Huawei Technologies ( RIC:RIC:HWT.UL ) . , Tencent Holdings (0700.HK) and Baidu (9888.HK).
Reporting by Casey Hall; Editing by Gerry Doyle and Stephen Coates
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