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Tech Giant Alibaba Names Crypto Advocate Joe Tsai as New Chair

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Chinese tech giant Alibaba has announced an unexpected, radical reorganization of its leadership team. Daniel Zhang, the current Chair and CEO is stepping down to be replaced by Joseph Tsai and Eddie Wu.

Alibaba Power Shift

The 51-year-old Chinese business executive Zhang announced he was stepping down as chairman and CEO  and would instead be concentrating his efforts on Alibaba Cloud, the organization’s digital technology and analytics arm.

The board of directors announced that current executive vice chairman Joseph Tsai will take over as board chairman.

In addition, Eddie Wu, who is currently chairman of Alibaba’s main Taobao and Tmall online shopping businesses, will take over as CEO. Wu will also replace Zhang on the board of directors.

The new appointees will take up their new roles in September, with Zhang staying in place in the interim. 

Joe Tsai new Alibaba chairman

In a statement issued by the company, Zhang said:

“”It has been an incredible honor and privilege to lead Alibaba Group as CEO over the past eight years and Chairman over the past four years, This is the right time for me to make a transition, given the importance of Alibaba Cloud Intelligence Group as it progresses toward a full spin-off. I look forward to working closely with Joe and Eddie in the coming months to ensure a seamless transition.” 

Shares fell 2.4% during pre-market trading in New York upon the announcement. 

Alibaba Woes

Alibaba has not been performing well over the past few years, losing market share as it struggled to recover from the impact of COVID-19. Alibaba has just recorded its third consecutive quarter of single-digit revenue growth, raising concerns that the recovery in Chinese consumer spending may take longer than expected.

Zhang’s sudden resignation comes after Alibaba announced a six-way restructure in March to spur growth and establish a family of independent market leaders in industries ranging from cloud computing and logistics to global trade. 

Alibaba was founded in 1999 by Jack Ma and others. Ma served as Chair until 2019, when he handed over the position to Zhang. Before his promotion, Zhang had been the company’s CEO since 2015. 

Joseph Tsai: A Crypto Face

Joseph Tsai has shown his warm and enthusiastic attitude towards crypto in the past, tweeting: 

He has invested in a number of cryptocurrency companies through wealth manager Blue Pool Capital, such as FTX, Polygon’s $450 million funding round in February, and a Web3 company Artifact Labs.

His appointment puts the spotlight on a cryptocurrency supporter in a country where the government’s stance on digital assets is less than cordial. While the use of Bitcoin and other cryptocurrencies is still generally prohibited in China, Hong Kong has recently started courting cryptocurrency startups

Despite the market’s reaction, Tsai has been touted as a good choice by analysts and other company stakeholders. Brian Wong, an early Alibaba employee and former special assistant to Ma said: “Tsai in the chairman role is exactly what an organization as big as Alibaba needs, and one that has international aspirations.” 

Tsai met Ma through a mutual friend, and one of the 17 who were with Ma when Alibaba was founded in a lakeside apartment in Hangzhou in 1999.

According to Bloomberg reports, Tsai’s initial pay at Alibaba was only $50 per month, a far cry from the $700,000 he was receiving from Investor AB, the Swedish Wallenberg family’s investment firm he worked at prior to starting with Alibaba. Later, Tsai worked as Alibaba’s CFO until 2013, when he became executive vice chairman. 

Kenny Wen, head of investment strategy at KGI Asia, says Tsai’s history with Ma is a “good thing. That means Ma remains the spiritual leader of Alibaba,.”

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