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In order promote efficient strategic coordination and high-intensity resource investment in sectors related to Alibaba Group’s core business e-commerce, the group CEO Eddie Yongming Wu will serve as CEO of Taobao & Tmall Group to replace Trudy Shan Dai, who has been taking the role since March, the Chairman Joseph Tsai announced in an internal letter to all the staff on Wednesday. Dai, as one of 18 co-founders of Alibaba, will help establish an asset management company to improve the return on capital and the shareholder value, and build relevant professional management team, according to the letter.

Following the adjustment, Eddie Wu will lead both Alibaba’s cloud unit and e-commerce unit. Tsai suggested Wu’s new role will facilitate integration of cutting edge technologies and core businesses. Wu’s taking helm of both Alibaba Cloud Intelligence Group and Taobao & Tmall Group will be helpful for the latter division’s transform led by technology innovation, and ensuring unified leadership of cloud computing and e-commerce and significant and sustained investment in these two core businesses, Tsai said in the letter.

Eddie Wu’s new role is part of Alibaba’s reform to replace executive team members with the younger generation. The next step Alibaba will take is to empower a new cohort of management leaders who have developed fundamental skillsets and experience from the bottom up, creating environment for yong people’s innovation, Tsai said .

The management shakeup originated from Alibaba’s surprising restructure less than nine months ago. Alibaba announced late March that it decided to split into six business groups, including Taobao Tmall Group, Alibaba International Digital Commerce Group, Local Services Group, Cainiao Smart Logistics Network Limited, Cloud Intelligence Group, Digital Media and Entertainment Group. Five of these major business groups have the flexibility to raise external capital and potentially to seek its own IPO, with the exception of Taobao & Tmall Group, which will remain wholly-owned by Alibaba Group. Each business group is fully responsible for its performance, with financial independence.

Less than three months later, Alibaba said that Zhang would step down from both Chairman and CEO to focus on its cloud unit in September, succeeded by the Executive Vice Chairman Joseph Tsai as the Chairman, and Eddie Wu, the Chairman of Taobao and Tmall, as the new CEO.

Alibaba completed the management transition on September 10, which means from the day on, Joseph Tsai serves as Alibaba’s Chairman and Eddie Wu became CEO, Tsai said in his internal letter to employees the same day. What was unexpected is that Zhang was also resigned as head of Alibaba Cloud Intelligence Group. Zhang said in June that a key reason for his quit as company chief is to focus on spin-off of the cloud business. Zhang at that time vowed to strengthen the cloud unit’s market leadership by making cloud computing and AI more accessible for businesses of all sizes and industries, adding AI “has also opened up exciting new opportunities that Alibaba Cloud is well-positioned to capture." According to Tsai’s letter, the board of directors accepted Zhang’s resignation application as the company is on the track of a smooth transition, and decided to name Eddie Wu as the acting chairman and CEO of Alibaba Cloud Intelligence Group.

In his first letter to the whole employees as Alibaba Group CEO, Eddie Wu listed user and artificial intelligence (AI) as essence of the company’s long-term strategies. The chief executive said Alibaba has decided to focus on two strategies to adapt to the new trending of the internet industry: one is to go user-first; another is to be AI-driven. The company will recalibrate its operations around these two strategies and reshape its business priorities, said Wu.

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