Alibaba's Strategic Shift - New CEO for Grocery Arm and Bold Move to Enhance HarmonyOS with Huawei

Alibaba Group Holding Ltd BABA has named Yan Xiaolei, the CFO, as the new CEO of its grocery division Freshippo, marking a significant leadership change. 

Hou Yi, Freshippo’s founder, will retire from his CEO role but will continue contributing as a senior advisor.

This leadership transition at Freshippo underscores Alibaba’s ongoing struggle to regain its footing after facing setbacks from regulatory scrutiny and increased competition from rivals like PDD Holdings Inc PDD and ByteDance Ltd, Bloomberg reports. 

Established in 2016, Freshippo has expanded its presence across China, operating over 360 stores, with plans to inaugurate 70 locations in 2024. 

A separate report indicated Alibaba collaborating with Huawei Technologies, a company facing U.S. sanctions, to develop native apps for Huawei’s HarmonyOS, aiming to challenge Alphabet Inc GOOG GOOGL Google’s Android and Apple Inc’s AAPL iOS within mainland China. 

This partnership will see eleven of Alibaba’s apps, including popular platforms like Xianyu, Fliggy, Cainiao, and Ele.me, transition to HarmonyOS, as announced by Huawei Mobile Service. 

In a significant move, Alibaba’s flagship e-commerce platform, Taobao, committed last month to embracing HarmonyOS, following the development of native versions of DingTalk and Amap, SCMP reports.

Alipay, the leading digital payment app in mainland China and an Alibaba affiliate, joined the HarmonyOS ecosystem in December. 

Huawei anticipates commercial deployment of HarmonyOS Next in the last quarter of the year. 

HarmonyOS will likely overtake iOS as China’s second-largest operating system in 2024, bolstered by strong sales of the Mate 60 series.

Meanwhile, Alibaba remains aggressively invested in its artificial intelligence endeavors, assuming the lead role in financing Chinese AI startups like MiniMax. 

It also underwent a multibillion-dollar initiative to revive Hong Kong’s culture and film sectors to unlock additional shareholder value.

The company is also diversifying operations across geographies via its logistics arm.

The stock has lost 9.4% last year. Investors can gain exposure to the stock via Invesco Golden Dragon China ETF PGJ and Tidal Trust II CoreValues Alpha Greater China Growth ETF CGRO.

Price Action: BABA shares are trading higher by 0.37% at $73.70 on the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.