Alibaba upgrades "diversified governance", Zhang Yong promotes "agile organization" to increase domestic demand and globalization strategy

On December 6, Alibaba Chairman and CEO Zhang Yong sent an internal letter announcing that the company would upgrade its "diversified governance" system and appoint Dai Shan and Jiang Fan to be responsible for the newly established "China Digital Business" and "Overseas Digital Business" sections respectively.

As the group president, Dai Shan will be in charge of Taobao (including Taobao, Tmall, and Alimama), B2C retail business group, Taobao Caicai, Taobao Special and 1688 businesses on behalf of Alibaba Group, together forming the "China Digital Business Sector".

As the group president, Jiang Fan will be in charge of the two overseas businesses of AliExpress and International Trade (ICBU) on behalf of Alibaba Group, as well as several subsidiaries targeting overseas markets such as Lazada, to jointly form the "overseas digital business sector."

In an internal letter, Zhang Yong said that the purpose of upgrading the diversified governance system is to face the future with a clearer strategic blueprint and a more agile organization in various business areas, and truly create long-term value. Domestic demand, globalization and cloud computing are Alibaba's three major strategies. Since Zhang Yong became CEO in 2015, he has always advocated the concept of agile organization to guide the adjustment of internal production relations to adapt to the needs of Alibaba's multi-characteristic business development. This targeted organizational structure adjustment sends a signal that Alibaba will further focus on domestic demand and overseas business.

Alibaba also announced that Wu Wei will no longer serve as the group's chief financial officer (CFO) from March 31, 2022, and will be replaced by the group's deputy chief financial officer (deputy CFO) Xu Hong (Toby). Wu Wei will continue to serve as the group's executive director and a member of the group's board of directors' sustainable development committee. In his internal letter, Zhang Yong fully affirmed Wu Wei's work over the past 15 years and her achievements for Alibaba with the term "outstanding historical contribution." He also said that he and Wu Wei had been planning the CFO succession plan together a few years ago, and the conditions for the handover are ripe today.

Zhang Yong said that as Alibaba Group forms a multi-business engine to drive future growth, "diversified governance" will become the group's new organizational strategy. Alibaba hopes to explore more new governance methods, always use the advancement of production relations to drive the release of advanced productivity, and use organizational innovation to drive business innovation.

Full text of the internal letter:

Be yourself, go through thick and thin together

Dear Alibaba people,

As the end of the year approaches, it is time for us to adjust ourselves and start again. We must admit that this is a challenging year, and it is also a year for us to better integrate into the general trend of social development and start self-transformation. We have made some progress, but we are also facing many challenges. In the midst of major cyclical changes, in order to further upgrade our diversified governance system, face the future with a clearer strategic blueprint and a more agile organization in various business areas, and truly create long-term value, the Group has decided:

1. As the group president, Dai Shan (Su Quan) will be in charge of Taobao (including Taobao, Tmall, and Alimama), B2C retail, Taobao Caicai, Taobao Special and domestic trade (CBU) on behalf of the group, forming the "China Digital Business Sector". In the face of increasingly fierce competition, we must make decisions more efficiently, act more uniformly, and have clearer positioning and division of labor between each level of organization. We expect Dai Shan to continue to play a leading role in Alibaba's consumer sector in China based on her deep market experience, outstanding leadership and unique perspective on women's experience.

As the group president, Jiang Fan will oversee two overseas businesses, AliExpress and ICBU, as well as several overseas-oriented subsidiaries such as Lazada, to form the "overseas digital business sector". In the past few years, Alibaba's overseas market has grown rapidly, with 285 million annual active consumers overseas. However, we still have a long way to go to become a truly global company and to achieve greater success in overseas markets with great potential. To this end, we need to form an overall strategic blueprint and organizational guarantee for overseas markets and move forward firmly. During his seven years at Taobao, Jiang Fan has made important contributions to the wireless, personalized and content-oriented development of Taobao. We look forward to Jiang Fan leading the team to achieve more innovation in the development of overseas markets.

The "Middle Platform Strategy" implemented since 2015 has been the most important organizational strategy of the Group in the past few years. As the entire Group is forming a pattern of multiple business engines driving future growth, "diversified governance" will become the Group's new organizational strategy for the future. We hope to explore more new governance methods, always use the advancement of production relations to drive the release of advanced productivity, and use organizational innovation to drive business innovation.

The above appointments will take effect on January 1, 2022.

2. Michael Evans, as Group President, will be responsible for the Alibaba Overseas Business Representative Team (AGB), International Intellectual Property Protection (IPR) and Overseas Public Affairs (IGR) departments, and will play a more important role in strengthening Alibaba's overseas market communication and cooperation. The appointment has already taken effect.

3. Maggie Wu will no longer serve as the Group’s Chief Financial Officer (CFO) from April 1, 2022, and will be replaced by Toby Xu, the Group’s Deputy Chief Financial Officer (Deputy CFO). Maggie Wu will continue to serve as the Group’s Executive Director and a member of the Sustainability Committee under the Group’s Board of Directors.

Since joining Alibaba nearly 15 years ago, Maggie has participated in leading the three successful IPOs of Alibaba B2B and Alibaba Group as CFO, and has established and trained a financial team with high professional capabilities and accomplishments, which has become a strong support for Alibaba's strategic implementation and business development. Facing the ups and downs of the capital market, the international environment, and the macro situation, she has always remained calm and modest. She is my irreplaceable close comrade-in-arms and a close sister to many core management team members. She has made outstanding historical contributions to Alibaba's development to this day. The CFO succession plan is something that Maggie and I started planning together a few years ago. We believe that the conditions for handover are ripe today. The market will always have ups and downs, but the business we do is long-term, and the relay of management is to ensure that Alibaba will continue to run for a long time. Maggie will also use another identity in the future to better support and help me and the team to complete our mission together.

The handover between Maggie and Toby also reflects Alibaba's tradition of orderly succession. Three years ago, Toby joined Alibaba from PricewaterhouseCoopers and became the group's deputy CFO two years ago. Faced with the ever-changing business types, Toby quickly demonstrated outstanding professional ability and leadership. So far, Toby has gradually assumed the heavy responsibility of the group's financial management and strategic investment. We have every reason to believe that Toby can well assume the responsibilities of the next Alibaba Group CFO and, together with the group's core management team, lead the team to the next stage of success.

For Alibaba, which is 22 years old, this is another brand new beginning, and a new starting point for our resolute transformation towards the future. Fellow Alibaba people, let us do our best together and go through thick and thin together!

Zhang Yong (Xiaoyaozi)

Chairman and CEO of Alibaba Group

December 6, 2021

Alibaba

Globalization Strategy