Jack Ma Calls For Alibaba's Strategic Shift, Lauds Rival PDD's Moves In An Internal Memo

Alibaba Group Holding Ltd.’s BABA co-founder, Jack Ma, has urged the company to alter its course of operations, as per an internal memo. He also expressed admiration for the strategic decisions made by a rival company, PDD Holdings Inc PDD.

What Happened: Ma, took a step back from Alibaba’s day-to-day affairs in 2020, but recently shared his views on the company’s internal forum, reported Bloomberg. He lauded PDD for their strategic decisions that have allowed them to snatch market share from Alibaba, the leading e-commerce platform in China. He voiced his belief in Alibaba’s capacity for change and rectifying its current path.

These remarks come amid a period of volatility for Alibaba, both internally and externally. The company is grappling with a slower-than-expected economic revival and the rise of competitors such as PDD and ByteDance Ltd. Recent organizational changes have also added to the challenges, including CEO Daniel Zhang’s resignation and the delay of its anticipated cloud division spinoff and listing.

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Ma’s memo suggests a dire need for changes within the corporation. His interaction with Alibaba’s staff indicates his return to public life, after maintaining a low profile following the government’s clampdown on his enterprises.

Following Ma’s positive remarks, Alibaba’s shares in Hong Kong saw a decrease in losses. This occurred just hours after PDD announced impressive results and a market value of $176 billion, nearing Alibaba’s $190 billion.

Why It Matters: These developments follow PDD’s reported third-quarter FY23 revenue growth of 94% year-on-year to $9.44 billion, exceeding the consensus of $7.69 billion. The Chinese online retailer’s earnings also surpassed expectations.

This situation for Alibaba had been brewing, as it faced a slowdown in recovery and a shift in cloud strategy. Analysts weighed in on the issues, with Alibaba’s shares trading lower following its Q2 results, leading to Morgan Stanley removing the stock as a top pick. The results emerged amid an eventful earnings season.

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