On September 12th, Alibaba Group Holding Limited’s newly appointed CEO, Eddie Wu, issued a company-wide letter announcing the establishment of two strategic priorities: customer-first and AI-driven. This is the first communication to all employees by Eddie since taking office on September 10th, clarifying Alibaba‘s strategic focus and action guidelines for the future.
Eddie proposed to reshape the priority of business strategies based on two strategic focuses: user-first and AI-driven. Based on this, Alibaba Group Holding Limited will increase strategic investment in three types of businesses – firstly, technology-driven internet platform businesses; secondly, AI-driven technology businesses; and third, globalized commercial networks.
He believes that the traditional internet model has become severely homogeneous and is now facing a state of saturated competition. New technologies, represented by AI artificial intelligence, are becoming the new driving force for global business development. Alibaba must undergo self-transformation in order to find the key to unlocking the future, persist in its original intention of solving social problems, fulfill its mission of serving small and medium-sized enterprises, and adhere to its vision of being a beneficial company for society.
To create the best user experience in the industry, Eddie proposed that “we must open ourselves,” and requested that all businesses proactively adopt a user-centric perspective, seeking the widest possible openness and cooperation, “even including with companies we traditionally consider as competitors”.
In the letter to all employees, Eddie stated that Alibaba will continue to deepen organizational reforms and strengthen independent decision-making systems for each business through more flexible and open governance mechanisms. Clear requirements and goals have been set for rejuvenating the management team. Within four years, it is aimed to have post-85s and post-90s become the main force in management, creating mechanisms and a cultural environment that allows more young Alibaba employees to become core contributors.
On September 10th, Alibaba Group Holding Limited completed the handover of management positions. Daniel Zhang stepped down and passed on his responsibilities. Eric Jing assumed the role of Chairman of the Board for the group, while Eddie took over as CEO of the group and also became Chairman and CEO of Alibaba Cloud.
As one of the eighteen arhats of Alibaba, Eddie is Alibaba‘s employee number 004. As early as 1996, he fought side by side with Ma Yun. With a technical background, he led the construction of the underlying technology architecture for multiple Alibaba businesses such as B2B, Taobao, and Alipay. After shifting his focus to commercialization in 2007, he led the creation of the group’s core business platform – Ali Mama – and innovatively incubated Mobile Taobao, driving the group’s mobile transformation. Internally known as “Wu Mama,” he possesses strong leadership skills.
Eddie wrote at the end of the all-staff letter: “I firmly believe that as long as we get back to our start-up mindset, not dwell on the past, and not get stuck in our old ways, Alibaba will be rewarded with enormous growth and create even greater value in the era of AI.”
Attachment: Eddie Wu’s September 12th Letter to Alibaba Group Holding Limited Employees
User First, AI Driven: Adopt Start-Up Mindset to Create Even Greater Value
Greetings to all Aliren, this is Eddie Wu.
Today marks my third day as Alibaba Group CEO, and I am honored to stand shoulder-to-shoulder with you.
Times are changing, and so must Alibaba! As the world progresses, Alibaba needs to evolve even faster! Over the past 24 years, Alibaba achieved rapid growth by riding the trend of internet technology. Today, as traditional internet models become increasingly homogeneous and face the competitive pressures of saturation, new technologies such as AI are emerging as the new engine of global business growth. Alibaba must transform itself to find the key to the future, fulfill its mission of solving societal problems, serve small and medium-sized businesses, and contribute to our society as a positive force for good.
I would like to share that, looking forward, Alibaba‘s two main strategic focuses will be “User First” and “AI-driven.” We will recalibrate our operations around these two core strategies and reshape our business priorities. We will reinforce our strategic investments in three areas: 1. Technology-driven internet platforms; 2. AI-driven tech businesses; 3. Global commerce network.
At the heart of all business is the value we provide to users which enhances user retention. We must be even more committed to a user’s perspective, serve their myriad needs, and always put user needs first. More users will translate to more market opportunities for businesses on our platform. In this new era, in order to offer the best-in-class user experience, we must open ourselves. All of our businesses should operate from a user-first perspective and seek out the most open and collaborative relationships, even including with companies we traditionally consider as competitors. Accordingly, we will encourage business collaboration based on market principles as long as it does not affect strategic synergies.
Over the next decade, the most significant change agent will be the disruptions brought about by AI across all sectors. We must be determined to reignite our start-up mindset to redefine the user-centric value proposition so that we can earn the opportunity to continue serving our customers in the AI era for the coming decades. Each of our businesses generates massive numbers of use cases; therefore, we must transform these use cases into applications for AI technology, driving breakthrough user experience and business models through technology innovation. If we don’t keep up with the changes of the AI era, we will be displaced.
Our next important area of investment is globalization. Globalization is both an opportunity and a responsibility for Alibaba. In fact, our first business as a start-up was a global trade marketplace. At the time we aspired to be a company born in China but contributed unique value to the development of the global economy. Today, with various businesses and investments already in place worldwide, we will aggregate our competitive advantages to make strategic moves. Importantly, globalization is not just about expanding our own business lines, but more about establishing a global commerce network with infrastructure and ecosystems to help more Chinese and global SMEs explore opportunities worldwide.
Alibaba will continue to deepen our reorganization efforts – we will adopt a more flexible and open governance system to strengthen independent decision-making in our businesses and support them to experiment with organizational structures and business logic tailored to their unique characteristics. At the same time, each of our businesses will continue to have the strong backing of the Alibaba holding company.
Lastly, I expect each Alibaba business to have the capability to make judgments about significant trends going beyond the next five years and have the courage to make early strategic bets and product innovation. We will establish incentive systems based on longer industry cycles. Furthermore, we are committed to the youth movement among our leadership team: within the next four years, we will promote those born after 1985 and 1990s to form the core of our business management teams, and we will create systems and maintain our culture to enable the next generation of Aliren to become the core strength of Alibaba.
I firmly believe that as long as we get back to our start-up mindset, do not dwell on the past, and do not get stuck in our old ways, Alibaba will be rewarded with enormous growth and create even greater value in the era of AI. Fellow Aliren, let’s go hard!
CEO, Alibaba Group
September 12, 2023