It's up to Wu Yongming

On the 20th day after the market value was surpassed by Pinduoduo, Ali once again ushered in new changes.

On December 20, Tsai Chongxin, chairman of the board of directors of Alibaba Group, announced in a letter to all employees that Wu Yongming, CEO of Alibaba Group and chairman of Taotian Group, will also serve as CEO of Taotian Group, and Dai Shan, who became CEO of Taotian Group at the end of March this year, will help establish Alibaba Group's asset management company, which is a new business function after Alibaba's transformation.

This also means that from now on, Wu Yongming has served as the CEO of Alibaba Group, Taotian Group, and Alibaba Cloud Intelligence Group. "The appointment of Wu Yongming as the No. 1 position in Alibaba Cloud and Taotian will help lead Taotian's transformation with technological innovation, and help ensure the group's unified command and high-intensity continuous investment in the two strategic priorities of e-commerce and cloud," Tsai Chongxin explained in the all-staff letter.

Alibaba told China News Weekly that the appointment adjustment is in line with the group's previous series of changes this year, and Taotian and Alibaba Cloud will still maintain their current status and operate independently.

Wu Yongming at this year's Yunqi Conference. Photo/Ali

The youngest "Eighteen Arhats"

As the youngest Ali "Eighteen Arhats", even though he officially took over as CEO of Alibaba Group in September this year, the name Wu Yongming is still quite unfamiliar to most people.

Behind this is the low-key past of Wu Yongming and Alibaba in the past 27 years.

According to public reports, in 1996, Wu Yongming, who had just graduated from the Department of Computer Science of Zhejiang University of Technology, saw a recruitment notice in the "Qianjiang Evening News" - the hosting business of virtual hosting, which is mainly engaged in virtual hosting, is recruiting programmers.

The recruiter was none other than Jack Ma, who founded the China Yellow Pages.

A year after "joining the house", Wu Yongming followed Ma Yun to Beijing to start a business. In 1999, Ma Yun failed to start a business in Beijing, and Wu Yongming followed Ma Yun back to Hangzhou. At that time, in Hangzhou Lakeside Garden, 18 venture partners pooled start-up capital to found Alibaba, and Wu Yongming was one of them, and he was also the first programmer of Alibaba.

According to public information, Wu Yongming has successively served as the technical director of Taobao website, the technical director of Alipay, the P4P product and technical director of Yahoo China, and the promoter of the advent of mobile Taobao, and now the creator of Ali's core cash flow business, Alimama platform.

It can be said that Wu Yongming is one of the key players standing behind a number of key products of Alibaba. This not only depends on his technical background, but also on his sense of the market. In the middle of Alibaba, Wu Yongming's participation in the acquisition of AutoNavi Map, UC Browser, Umeng and other projects at that time can also be used as evidence.

In 2015, Wu Yongming founded Yuanjing Capital, according to the official website, its main investment areas include hard-core technology, industrial manufacturing, medical technology, cross-border going overseas, etc., and has invested in more than 150 projects including Li Auto, Tuya Smart, Xingkangyuan Biotechnology, and two hydro and one oxygen.

The early unrelenting follow-up and the innovation of "crawling and rolling" along the way have laid the foundation for Wu Yongming to now sit in the "No. 1 position" of Alibaba, Taotian and Alibaba Cloud. In June this year, Ali announced important personnel changes, and it was mentioned in the internal letter that Wu Yongming "has been following the development of global cutting-edge technology trends for many years, and will further broaden Alibaba's technical horizons and explore a new direction with cutting-edge technology as the development engine."

Taotian's anxiety

However, the change of leadership after only nine months of independence may also reveal some anxiety of Taotian Group.

According to Jiang Han, a senior researcher at Pangu Think Tank, the appointment adjustment may be related to the current fierce market competition, and in order to better respond to market changes and challenges, Alibaba Group has decided to make personnel adjustments to Taotian in order to improve its business performance and competitiveness.

Taotian is one of Alibaba's core businesses. However, at the moment when the e-commerce competition pattern is changing abruptly, Taotian is surrounded by strong enemies, and its performance growth is slowing down. In the third quarter of this year, Taotian Group's revenue was 97.65 billion yuan, a year-on-year increase of 4%, while as a comparison, Pinduoduo's revenue in the same period was 68.84 billion yuan, a year-on-year increase of nearly 94%.

According to a Goldman Sachs report, Taobao Tmall's market share fell from 66% in 2019 to around 44% in 2022, while Pinduoduo increased from 10% to 18%. In the past two years, the e-commerce business of Douyin and Kuaishou has also entered a stage of rapid development, and now the annual GMV of both has crossed the trillion scale.

In fact, since the beginning of the year, Alibaba has been in flux. After undergoing one of the biggest organizational changes, Dai Shan, one of the "Eighteen Arhats", officially took the helm of the independent Taotian Group in March this year.

According to media disclosures, in May, Ma Yun held a small-scale communication meeting with the business leaders of Taotian Group in Hangzhou, pointing out that the current competitive situation facing Taotian is very severe, and he took Nokia and Kodak as examples, believing that half a year to a year is enough for a company to go from benchmarking to death. "Ali's methodology that relied on to succeed in the past may not be applicable, and the next step is Taobao, not Tmall's opportunity", Ma Yun pointed out three directions for Taotian to return to Taobao, return to users, and return to the Internet.

Dai Shan, who serves as the CEO of Taotian Group, also practiced the same. In May, Dai Shan announced the three major strategies of Taotian Group: user first, ecological prosperity, and technology-driven. Taking the important promotion node Double 11 as an example, Taotian Group's price power campaign is in full swing, paying more attention to small and medium-sized merchants, and announcing the launch of 10 AI tools to merchants, trying to achieve user growth and transaction scale growth with a combination of punches.

In the past nine months, Taotian under Dai Shan's helm has not been without improvement. But judging from the results of her current job transfer, the changes she led may not have met Ali's expectations.

It is worth noting that at the close of the U.S. stock market in the early morning of December 1, the market value of Pinduoduo has surpassed Alibaba, becoming the first stock in the market value of U.S.-China concept stocks.

"Awakening the mindset of starting a new business"

After the earnings season in November this year, Ma Yun made a rare speech on Alibaba's intranet, pointing out that "the era of AI e-commerce has just begun, and it is both an opportunity and a challenge for everyone." This also means that innovation has become more important for Taotian today.

"A new round of technological change has begun, which is both a challenge and an opportunity. A new era requires a new strategic and organizational change. Facing the past, facing the future, and changing ourselves, I believe that Alibaba, which has undergone this round of change, has completed its transformation as it has done before," said Tsai Chongxin again in an internal letter announcing the appointment adjustment.

And this is exactly what Wu Yongming values and is good at.

In Alibaba's view, Wu Yongming's appointment adjustment will help lead Taotian's reform with technological innovation.

Previously, at Alibaba's quarterly results call in November, Wu Yongming, who officially took over as CEO of Alibaba Group for two months, disclosed for the first time Alibaba's three strategic directions for the next ten years: technology-driven Internet platform business, AI-driven technology business, and global business network.

Now after taking over as the CEO of Taotian Group, Wu Yongming can lead the team to implement ideas more directly.

Jiang Han believes that after Wu Yongming takes over as CEO of Taotian Group, on the one hand, he can clarify the strategic focus and priority selection for Taotian, which will affect the development direction of Taotian, and on the other hand, he emphasizes the resolute choice around the main business, so that Taotian can follow this principle in its future business layout and development.

At the same time, "Wu Yongming is committed to promoting the reform of the management team with a younger generation, which will bring new vitality and innovative thinking to Taotian," Jiang Han told China News Weekly.

In September this year, Wu Yongming said in a letter to all employees that within four years, the post-85s and post-90s generations should be the main managers to refresh the business management team and create a mechanism and cultural environment for more young Ali people to become the core strength of Alibaba.

According to Tsai Chongxin's all-staff letter, Wu Yongming's concurrently serving as the No. 1 position in Alibaba Cloud and Taotian will help ensure the group's unified command and high-intensity continuous investment in the two strategic priorities of e-commerce and cloud.

"Wu Yongming's unified leadership of Alibaba Cloud and Taotian is conducive to reducing internal communication costs, improving management efficiency, and concentrating resources and strength to meet market challenges," Jiang Han said.

Wu Yongming had previously said: "Today's Ali is facing the rapid development of new technologies and new changes and new expectations in the market. No matter how successful you have been in the past, you must turn the page back and awaken the mentality of starting a new business. ”

And next, what kind of re-entrepreneurship Taotian and even the entire Alibaba Group can accomplish depends on Wu Yongming.

Author: Shi Hanxu