HONG KONG (REUTERS) – Jack Ma’s exit ushers in a nervous new era for Chinese tech. The charismatic co-founder of the US$460 billion-plus Alibaba will step down from his chairman role when he turns 55 on Tuesday (Sept 10). His exit comes as Beijing tightens its grip on fellow bosses like Tencent’s Pony Ma, who must also grapple with a slowing economy.
The handover on Sept 10 will be largely symbolic. Ma will stay on the board until his current term expires in 2020. The billionaire has spent years grooming Alibaba’s next generation of leaders, including successor Daniel Zhang and chief financial officer Maggie Wu, to take over. As part of a management reshuffle in June, the latter was elevated to oversee the company’s all-important strategic investments division, making her one of top dealmakers in the world.
Ma will be leaving on a high note compared to some contemporaries. Baidu’s Robin Li, who is in charge of China’s top search engine, has seen his company’s market capitalisation halve over the past year on the back of strategic missteps. Video-games group Tencent can’t seem to stay out of hot water with officials. Its music-streaming arm is currently facing antitrust scrutiny, according to media reports last month, following a bruising clampdown on its core business last year.
Despite enjoying a near-messianic status of China’s most famous capitalist, Ma has remained relatively unscathed. The same can be said for his company. Annual revenue at Alibaba is forecast to grow 36 per cent, to US$72 billion, in the current fiscal year, according to average analyst forecasts from Refinitiv, as diversification bets in cloud computing, offline retail and other areas pay off.
Moreover, it has taken steps to improve governance and transparency. The company hosts annual investor days at its Hangzhou headquarters, and last year published its first environmental, social and governance report. Ma’s succession planning also distinguishes him from many counterparts, such as Richard Liu at rival JD.com, who have no obvious second in-command in place.
Zhang will inherit the top job, but not the domestic economic boom Alibaba has rode for years. Success in overseas markets, elusive so far, will be crucial, even as trade tensions mount. Ma’s smartest move may have been to quit while he’s was still ahead.
Alibaba, which announced the succession plan on Sept 10, 2018, said that Ma was a “lifetime partner” in the Alibaba Partnership and also a member of the partnership committee. The partnership is made up of 36 individuals and has the right to nominate a majority of the company’s directors.