Ma Yun made three internal statements, and the real end of Ali's reorganization

After the restructuring was over, it was just beginning.

Text丨Guan Yiwen, Cheng Manqi, Zhu Yingli, Chen Jing

Editor丨Huang Junjie

In the past year, Jack Ma, who stepped down as chairman of the board of directors for five years and faded out of the public eye for a long time, made three internal statements. These three times, Ma Yun's statement has become more public and his identity has changed.

In late May 2023, Jack Ma said in a communication meeting with only a few business presidents that the future of Taotian Group is: return to Taobao, return to users, and return to the Internet.

Half a year later, Pinduoduo's market value is about to catch up with Alibaba, and Ma Yun replied on the intranet "Ali will change, Ali will change", emphasizing in more than 100 words that no price and sacrifice must be paid to promote reform, and the payment of "partner Ma Yun".

The most recent time was on April 10 this year, on the first anniversary of Ali's reorganization, Ma Yun sent a letter of more than 1,000 words to boost morale, saying that "we must admit and correct yesterday's problems, but also face future reforms", which was spread throughout the network. At the end of the letter is Jack Ma's nickname when he worked at Ali - Feng Qingyang.

Ma Yun spoke out three times, just in time for the three nodes of Ali's one-year reorganization. The first time, Alibaba has just launched a "1+6+N" restructuring, planning to let the sub-business independently raise funds or go public; the second time, Alibaba announced that Hema would suspend its listing, Alibaba Cloud gave up a complete spin-off, and the news that Jack Ma Family Trust reduced its stake in Alibaba triggered a market rebound; and third, Alibaba changed the CEOs of three businesses within a month.

An Ali person summarized that Ma Yun's three internal statements correspond to Ali's three thoughts in the past year - how to reform the main business of e-commerce, how to deal with competition, how to face the future, employees ridiculed internally, saying that Ma Yun's narrative of full faith is very MAGA - Make Alibaba Great Again, make Alibaba great again.

Alibaba's current share of China's e-commerce market is almost 40%. From the perspective of annual turnover, Ali China's retail sales are 8 trillion yuan, Pinduoduo is 4 trillion yuan, JD.com is 3 trillion yuan, and Douyin e-commerce is 2.6 trillion yuan (payment caliber).

When it was just reorganized a year ago, Ali shouted out the price power campaign, and the most feared opponent was Pinduoduo. A year later, Douyin became a clear and imminent threat to Alibaba's source of profit – brand advertising.

"The most troublesome thing about Douyin is like a hedgehog, which costs tens of millions of yuan for a random live broadcast, and it is difficult for Ali to have a solution to this kind of unplanned behavior, and it is impossible to make a content platform with 800 million daily lives. Many Alibaba employees believe that Douyin's growth has far exceeded expectations, and it is more difficult to deal with than Pinduoduo. "LatePost" learned that the turnover of Douyin's beauty and skin care categories approached Taobao and Tmall at the end of last year.

The pattern of the e-commerce industry has once again returned to the three-legged competition of all categories. The last time this situation occurred was more than ten years ago, when Tencent went out to do e-commerce on its own.

Managers know better than anyone about Alibaba's position in China's e-commerce market, and the red flags are clear – only the number of transactions is the first, the number of transaction users is second, not as good as Pinduoduo, the number of packages is the second, and it is very close to the third-place Douyin e-commerce, and the DAU (daily active users), Taobao in March is half of Douyin's, with 40 million more than Pinduoduo.

If you summarize the year of Ali's restructuring in one sentence, Ma Yun's sentence can best summarize - "The core change of this year is not to chase KPIs, but to recognize yourself." ”

Ended 4 years of discussion: customer first, but who is the customer?

In the second half of 2020, Daniel Zhang, then CEO of Alibaba, answered employees' questions about who the first customer was, saying, "Buyers first, or sellers first, such discussions are meaningless." Whoever is the first is not suitable, we still have to look at the specific situation. ”

The first sentence of Ali's values is "customer first". Alibaba's initial business was to help enterprises find customer orders, and customers were enterprises. Later, with Taobao, customers became merchants. But the rise of Pinduoduo has left some Alibaba employees wondering who has come first, merchants or consumers.

Ali sells advertising space to merchants to collect advertising fees, and earns hundreds of billions of yuan in profits a year. As a result, the goods that consumers brush are often not the cheapest, and there is a huge contrast with Pinduoduo, which pursues the ultimate low price.

By 2020, Pinduoduo's total turnover had reached 1.67 trillion yuan. In March of this year, Alibaba relaunched the "Taobao Special Edition" (later renamed "Taote") for the sinking market to compete with Pinduoduo. By the end of that year, Pinduoduo had surpassed Alibaba in the number of annual buyers for the first time.

Ali also began to rethink, how to define who Ali's customers are? Daniel Zhang himself said internally: "The most difficult thing about the platform is who is the first customer. This professional manager is also responsible for Alibaba's profits, and thus Alibaba's share price.

Until mid-2021, some employees questioned Ali's follow-up on the lowest price of the JD platform during the 618 period at a small-scale CEO face-to-face event, which harmed the interests of merchants, and Daniel Zhang made it clear that "our first customer on the e-commerce side is consumers." But he didn't elaborate too much.

By early December 2021, Alibaba announced the implementation of "diversified governance" and appointed Dai Shan to take charge of Taobao and Tmall e-commerce. According to LatePost, she stopped the development model with GMV as the goal in the month she took office, and wanted to carry out systematic reforms around "the buyer is the first customer".

This clear attitude was limited to her small meeting with the heads of more than a dozen business lines. Since then, Dai Shan's core idea to employees, merchants, and the outside world has always been around "attaching importance to user experience", rather than directly saying "consumers first".

After another year, once again facing the staff's attitude on how to deal with the relationship between merchants and consumers, Daniel Zhang's attitude is clearer, "When there is a conflict, we should stand clearly on the side of consumers, as a platform, only consumers are with you, merchants will be with you." This year, Pinduoduo's total turnover has exceeded 3 trillion yuan.

But all of these statements were only small-scale communication, and the result was posted on the intranet with QA. "Customer first" is still the first value of Alibaba. Who is the customer, Ali did not have a formal answer to all employees of the company and the outside world. For a company of this size, the most basic consensus issues have been blurred for a long time.

At the beginning of April this year, Cai Chongxin, a long-time partner of Alibaba who participated in Alibaba's early founding, really answered this basic question internally and externally, saying that Alibaba's real first customers are "users who use its app to shop". However, the official mission of Alibaba Group is still to "make it easy to do business in the world".

CEOs aren't the only ones obligated to answer the question, "Who's the number one customer?" Alibaba Group established a partnership system in 2010. The partners have the power to determine the composition of the board of directors so that the company can continue to uphold its original mission, vision and values after going public.

Ali's top decision-makers

As of the latest fiscal year 2023 (March 31, 2023), Alibaba has a total of 28 partners. All of Alibaba's partners, who have been on the front lines of business or in charge of functions, retired at the age of 60, but the two long-term partners, Jack Ma and Joe Tsai, can be re-elected at least until the age of 70 and can still be extended by the partners after expiration.

In May last year, 18 of the 19 members of the board of directors of the restructured six major business groups were partners of Alibaba.

On September 10, 2023, Daniel Zhang stepped down from all his positions at Alibaba. Joe Tsai took over as chairman of the board of directors of Alibaba, and Wu Yongming took over the positions of CEO of Alibaba Group and CEO of Alibaba Cloud Intelligence Group.

Wu Yongming is one of Ali's "Eighteen Arhats", one of the 18 founding team members. He is also one of the few partners in Alibaba who has managed products, technology, and operations. Shortly after taking over the position of Alibaba Group, Wu Yongming succeeded Dai Shan as CEO of Taotian Group.

In March of this year, just before the end of Alibaba Group's fiscal year 2024, three business CEOs stepped down. Yu Yongfu, Chairman of Local Life Group and CEO of Ele.me, Hou Yi, CEO of Freshippo, and Lin Xiaohai, CEO of Sun Art Retail, have resigned from management positions.

In the past year, Alibaba has replaced six managers in CEO positions.

Wu Yongming is now the CEO of 3 groups (Alibaba Group, Taotian Group, Cloud Intelligence Group) and serves on the boards of 4 groups (Alibaba Group, Taotian Group, Local Life Group, Alibaba International Digital Business Group).

There are more than 20 people who report directly to Wu Yongming, including business line executives, including Liu Bo (nickname: Jia Luo), Wu Jia, Chen Weiye (nickname: Chuduan), Cheng Daofang (nickname: Daofang), Wang Tingxiang (nickname: Shaoyou), Liu Yiman (nickname: Yiman), etc., Ye Jun (nickname: Bu Poor), Zhou Jingren of Cloud Intelligence Group, etc., as well as some partners, such as Yu Yongfu, Wu Zeming, Jiang Fang, etc.

After the person in charge of the core business sector was determined, he set the principle of "young people come up and use it". "LatePost" learned that at present, more 95 post-95 post-95 managers are emerging in the front-line grassroots managers of Taotian Group, and some post-90s have also been added to the management level below the president.

Wu Yongming's management style is simple and straightforward, and one Ali person commented that he "is very clear about what he wants and what he doesn't want." ”

He only looks at the data - the number of orders, transaction value, product reviews, customer NPS (Net Promoter Score) data, etc., the data should be compared with the market, compared with competitors, and the internal multi-strategy horse racing system and A/B test mechanism - he emphasizes relying on data to make decisions, which is what companies such as Pinduoduo and ByteDance have been doing.

He has selected a younger, more efficient management team with faster decision-making.

"LatePost" learned that a business executive led the team to a meeting and had questions, and immediately called Wu Yongming on the spot, and made a decision immediately after receiving a reply.

In the past, it was difficult for several cross-functional teams related to an industry to work together because they belonged to different business units and knew each other's GMV data at most.

Now Wu Yongming provides more authority and space to set up a cross-departmental virtual task force, where employees in the live streaming industry, Tmall industry, and Taobao industry can meet together every day to share various data, and when it comes to the reporting process, as long as two of the three business leaders vote on it, they can make their own decisions.

Concentrate resources, all for the sake of Taotian

By the end of 2023, Alibaba has enough cash and short-term investments – 555.2 billion yuan – and hundreds of billions of yuan in equity investment, which is the transformation reserve left by the previous management team to Alibaba.

Next up is the protracted battle, and both of Ali's young opponents are very good at making money. Frontline workers are the first to feel the change. In the past, a Taobao Spring Festival marketing project cost 500,000 yuan for travel expenses alone, but now Taobao and Tmall have changed the person in charge of finance, and a business president has set a rule that in principle, more than 1.5 million yuan will be approved and not a single one will be approved.

Around money, an Ali person concluded that the core idea is to "flow money to the most efficient place".

50 billion yuan of resources poured into Tmall to optimize marketing strategies and improve the brand's price competitiveness, and Taobao Live received a new cash investment of 10 billion yuan from the group this year, with the task of doubling the growth of DAC (daily buying users) in the new fiscal year.

"Focus" has become Alibaba's keyword in 2024. Ali has changed from the epitaxial expansion that used to do everything, to focus. An Ali person close to the core management commented that the other meaning of the focus is to clarify the phased goals, "The management is analyzing the main contradictions, since we want to seize the users, we must solve them in stages, don't hesitate to linger." ”

In the past year, Alibaba has reduced the burden on Taobao and Tmall, and some businesses that rely on its profit transfusion have been spun off to cover their own profits and losses. The three businesses that Alibaba originally planned to list first are all in flux: Alibaba Cloud gave up a complete spin-off, Hema suspended listing, and Cainiao gave up listing. In addition, there have been rumors of the sale of new retail businesses such as Yintai, RT-Mart and Freshippo.

E-commerce-related resources have been reverted back to Taobao and Tmall: Taote's merchants and products have been moved back to Taobao, wholesale platform 1688 has opened stores on Taobao to provide cheap goods, and the Cainiao Station team has settled in Taotian co-working to improve the user experience of "home delivery", etc.

A number of the group's capable executives have also been transferred to Taotian Group, such as Chen Weiye, the former COO of Ele.me, and Wu Jia of the Intelligent Information Business Group, who is in charge of Ele.me's overall operations and marketing, and is almost the number two person in addition to the CEO, and Wu Jia's product Quark, which has just been upgraded to Alibaba's strategic innovation business.

An Ali person concluded, "In order to do a good job in Taotian, Ali really worked hard." ”

How to win back market growth, the management gave three paths: data-driven decision-making system, reporting pays more attention to data than flashy PPT reports, and the most important one also corresponds to who the first customer is - everything is centered on consumer needs and experience to optimize all business links, emphasizing "good goods", "good prices" and "good services".

The e-commerce giant, started with "good services" from competitors, such as "refunds only".

Pinduoduo's refund-only policy was launched at the beginning of 2021, users initiate refunds, no need to return goods, Pinduoduo directly refunds a single order of less than 20 yuan, and when it comes to orders with a higher amount, the system usually takes into account a number of indicators and takes the initiative to partially refund users with excellent credit records.

At the end of 2023, Taobao will implement new dispute resolution rules, which will attract the most attention from the market because it will judge product quality problems based on big data, giving buyers the opportunity to get refunds without having to prove that there is a problem with the product, and do not need to return the product. This change is interpreted as Alibaba's need to fully study Pinduoduo's refund-only policy.

"LatePost" understands that at present, only the refund process is initiated by the consumer, and the platform comprehensively considers the consumer credit score and the merchant's quality score to make a decision. It is implemented on all platforms, all industries, and all users, but there are not too many consumers who will actually initiate only refunds.

Both Alibaba industry operations employees believe that the refund-only policy may only apply to 10% of Taotian's products. The product structure of the two platforms is different, Pinduoduo has many white labels and a high defective rate, and many merchants have already included the cost of only refunds in their operating budgets;

Ali is also learning JD.com's "home delivery" service.

Because of the price war, the delivery of a Taobao and Pinduoduo package, the courier company only earns a few cents per ticket, and the courier is used to sending the e-commerce package directly to the post station, and the user needs to go to the post station near his home to pick up the goods, which affects the experience.

This is a problem that has been backlogged for seven or eight years in Taotian. After Chen Weiye was in charge of the Taobao business department, he proposed a plan this year, Taotian made a budget, recruited 100,000 outsourcing to rookie post stations across the country, and was specifically responsible for delivering the parcels in the post station to consumers.

Taotian has also launched a weekly program internally, where employees can discuss user experience problems with executives live, which has been held for three episodes.

There is an issue to discuss the issue of red envelopes, and the bad experience that consumers often encounter is - return the red envelope after a period of use, because the red envelope has passed the expiration date, and the red envelope will be gone after returning it - The executives who participated in the live broadcast were Chen Weiye, Jiang Fang and Wu Jia, who first discussed a series of complex rule issues, and finally simplified the complex, saying that the red envelopes caused by non-consumer problems cannot be returned, and the platform will find a way to make sure that consumers return the red envelopes after returning them.

Wu Jia, head of Taotian's user platform business department, added a point of view, giving red envelopes is itself the platform hopes to use up this budget, if the red envelopes can be returned to improve the consumer's next repurchase, why not return it to him?

An Ali person believes that in Alibaba, it is difficult for someone to break through the existing business rules and make innovative solutions, and can only rely on the reorganization of production relations or higher-dimensional dimensionality reduction. It is to be hoped that these discussions will come to an early conclusion. ”

Invest and buy all AI model companies

Around the Spring Festival this year, Alibaba's two large investments in a short period of time stirred up the financing competition in the large model market.

In October last year, the Dark Side of the Moon quickly began its next round of funding after completing a Series A funding round with a post-investment valuation of about $800 million. The original deal was for the Dark Side of the Moon to attract about $100 million in funding at a $900 million pre-investment valuation, of which Xiaohongshu led $30 million. This will make the Dark Side of the Moon the 5th large-scale unicorn in China.

Alibaba's entry has completely changed the scale and rhythm of this round of financing - the pre-investment valuation of Moon Dark has been raised to more than $1.5 billion, and the deal will be negotiated before the Spring Festival in 2024, and Ali finally invested nearly $800 million in Moon Dark, with a shareholding ratio of more than 40%, and a post-investment valuation of about $2.5 billion. Xiaohongshu gave up leading the pitch and ended up only about $10 million.

At the same time as the dark side of the investment month, Alibaba was also approaching another Chinese large-scale model startup, MiniMax, and invested about $400 million after the Chinese New Year, and MiniMax reached a post-investment valuation of about $2.5 billion. MiniMax did not respond to the above information. Another previous strategic investor in the company was Tencent.

There are already 6 large-scale model unicorns in the Chinese market (MiniMax, Dark Side of the Moon, Zhipu AI, Baichuan Intelligence, Zero One Everything, and Stepleap Star), and Alibaba has invested in 5 of them, which is the most aggressive investment among all the major Internet companies. Tencent invested in 4 companies, but the amount was mostly tens of millions of dollars, and ByteDance chose not to invest in large model companies.

A person close to Alibaba's war investment department said that since Wu Yongming became the group's CEO, the biggest change in the war investment department is that the decision-making is more centralized: Wu Yongming makes the decision, and CFO Xu Hong executes.

Wu Yongming's investment style is decisive. Ali itself is also making a big model, and the above two large investments in large model startups, Ali has internal debates and hesitations, but Wu Yongming quickly made a decision.

Over the past year, Alibaba's investment scope has also shrunk significantly, from retail, entertainment, enterprise services and chips to cutting-edge directions such as AI, quantum computing and controlled nuclear fusion, all of which are related to intelligent computing infrastructure.

Alibaba's aggressive investment in AI matches Alibaba's AI strategy.

After Wu Yongming became the CEO of Alibaba Cloud in September 2023, the new strategy of Alibaba Cloud, which mainly carries Alibaba Technology's business, was clearly described as: "AI-driven, public cloud (Alibaba's name for public cloud) first".

According to Alibaba's earnings conference in November last year, AI contributed 2% of public cloud revenue. An Alibaba Cloud source said that at present, AI large model companies have become one of the largest increments of Alibaba Cloud, but the problem is that the GPU computing power that Alibaba Cloud can provide is still insufficient, resulting in a lot of demand flowing to the market. In the future, Alibaba Cloud will gradually solve the problem of computing power by increasing the proportion of self-developed chips and expanding the purchase of GPUs.

Alibaba's cloud-based AI strategy is divided into three layers: first, at the chip layer, Pingtouge, which was established in 2018, has been developing AI chips, and Alibaba's investment in self-developed chips exceeds that of companies such as Byte and Tencent, which can partially supplement Ali's own AI computing power for training large models, especially in inference tasks with relatively low performance requirements (that is, the process of using large models), Ali has more autonomy. As large models are more widely used, the computing power used for model inference will far exceed the amount used for model training.

The second layer is the cloud computing service layer, which is the top priority of Alibaba's AI strategy: Alibaba Cloud hopes to seize the opportunity of large models to build AI computing infrastructure.

The technical characteristics of large models are in line with public cloud services: the training and inference of large models require scheduling of flexible computing resources and timely response, which is more compatible with public clouds that have data centers in various places and can meet the changes of computing power peaks and troughs in a timely manner.

"LatePost" learned that Alibaba's investment of nearly $800 million in the dark side of the moon is that the dark side of the moon needs to commit to the purchase of Alibaba cloud computing resources, and the specific usage may change dynamically. Alibaba did not set up an exclusive cooperation agreement this time, but asked the dark side of the moon to give priority to the purchase of Alibaba Cloud under the same conditions.

The last layer is the large model and related services, such as the toolchain for training and deploying the model. "LatePost" learned that while investing heavily in foreign countries, Ali also continued to pursue to make the first general model in China. A number of AI practitioners commented that Ali Tongyi Qianwen has made significant progress since the end of last year.

Alibaba Cloud has developed a general model, Tongyi Qianwen 2.0, and multiple industry models, hoping to show developers what the big model can do and what problems it can solve in the form of a product, and drive developers to integrate the big model into the enterprise business system through the cloud.

Tongyi Lab, which is responsible for the development of Alibaba's large model, is currently directly led by Zhou Jingren, CTO of Alibaba Cloud. He joined Alibaba in 2015 and became the CTO of Alibaba Cloud at the end of 2022, and since 2018, the Intelligent Computing Lab of the Damo Academy, led by Zhou Jingren at that time, has been exploring large models, and in 2020, he released the multimodal large model M6 with trillions of parameters.

An Ali person believes that since the general direction of AI is identified, internal entrepreneurship and external investment can be used to improve the winning rate.

It's just getting started

Tsai Chongxin's "confession" and Ma Yun's "affirmation" boosted morale. Some people weep when they see the signature of "The Wind is Clear", some people think that as long as the founder appears publicly, it can bring confidence to everyone, and some people feel that everything is pale now, and the important thing is change.

In the past year, for ordinary employees of Alibaba, the most important change may be that the leadership has been changing.

Someone has come up with a way to survive – to inquire and adapt to the preferences and working styles of the new leader. Dai Shan, CEO of Taotianyuan, likes to ask employees about their sense of value, and she tries to rely on feelings when reporting, and she doesn't like flashy PPTs, so many people use Word documents instead. After Wu Yongming took over, it was better not to use "adjectives" because he was more inclined to use "cold data" to make business decisions.

Leaders change, and so do goals and plans. An employee of Taotian said that their KPIs have changed several times in the past year. At the beginning of the year, a goal is set, and after half a year, it is found that it cannot be achieved, so it comes up with new ideas and change indicators, and after a few months, the management changes, and the goal is adjusted - this is not uncommon, "some teams change not only once or twice, but four or five times a year".

Changing leaders is not always bad – if the thorny problems left by the previous leader cannot be solved, wait and let go, no one cares, and the new leader will lead the team to deal with the new problems. Some Ali employees ridiculed that there is no difficulty that cannot be solved by one adjustment, and if there is, it will be done twice.

For most employees, the restructuring of the group and the change of top management are far away, and they have a lot at stake in their own interests – whether they can achieve high performance at the end of the year corresponds to stocks, months of bonuses and promotion opportunities.

A brand founder believes that if Ali can really implement customer first, whether it is business first or consumer first, the situation will be better than now, "Ali's original problem is report first, leadership first, not customer first." ”

Weibo data blogger Beijing Saidon described in the podcast "Flip Book" that "the company [business action] is like a Brownian motion with middle management such as P9 and P10 as the granularity, and they are often self-motivated to set some goals that are beneficial to their own interests." ”

This is a problem that any organization faces when it grows. Alibaba's business spans e-commerce, offline retail, supermarkets, food delivery, cloud computing, film industry, wine and tourism, logistics, games, ...... In a large group, the reward of a person's work is often not correlated with actual performance. Their rewards depend primarily on how their superiors allocate resources, positions, and bonuses.

And Ali is too rich to support a business to invest in the wrong direction for a long time. Ali facilitated 8 trillion yuan of commodity transactions a year, obtained more than 900 billion yuan in revenue, and made a profit of more than 100 billion yuan. In order to achieve the goal of "300 million active buyers", Taote launched "0 yuan purchase" in 2021, and even pulled users from Taobao for a time. After the subsidy disappeared, the number of Taote's users also plummeted. Similarly, Hema has launched more than a dozen different types of "new retail" stores, which have rapidly expanded across the country while continuing to lose money. Their models have proven to be unsustainable, but that doesn't stop them from achieving high performance for a few years and getting more resources from Alibaba Group.

This is true for business units with thousands of people, and the same is true for one person per team. There are product managers who package their competitors' existing advertising products as AI innovations, engineers who reinvent the wheel to reflect the workload, and business teams who spend a lot of time arguing for value but don't want to learn about competitors and merchants.

"After the company became bigger, I always felt that there was magic in the path to success, so I set up a bunch of processes to promote it throughout the company. It didn't take long for people to take the process as substance. At one point, we had a lot of people who were really good at managing processes, but they didn't understand what they were doing. In 1995, Steve Jobs, the founder of Apple, dissected the big company disease in an interview. The growth of all companies is ultimately against this trend.

Gong Fangyi also contributed to this article.

Image source: Visual China