“We hacked away at the big-company disease,” according to Ma’s letter to Alibaba employees. “We turned the company from a cumbersome organisation into one that is simple and agile, where efficiency comes first, and the market comes first.”
“We have fallen behind because we forgot who our real customers are,” Tsai said in the podcast. “Our customers are the users who use our apps [for] shopping, and we did not give them the best experience. In a way, we stepped on our own foot and did not focus on where we can add value.”
The capital markets have punished Alibaba for its mistake. The company’s stock has plunged 77 per cent from its 2020 record of HK$307.40 per share in Hong Kong to HK$70.50 in recent trading, faring worse than the 31 per cent decline in the Hang Seng Index over the same period. Alibaba has lost HK$2.6 trillion (US$332 billion) in value over that period.
Alibaba chairman Joe Tsai says e-commerce giant is set to bounce back: CNBC
Alibaba chairman Joe Tsai says e-commerce giant is set to bounce back: CNBC
Tsai touched on a number of topics in the 37-minute podcast, from Alibaba’s challenges and US-China relations to his work routine and his love of sports. Tsai is also chairman of the South China Morning Post, wholly owned by Alibaba.
He also commented on the state of China’s AI industry. China is about two years behind the United States in the global AI race, but the country will develop its own ability to make high-end graphics processing units over the long term, Tsai said.
Tsai’s candid admission of the missteps at Alibaba generated an uproar on China’s social media. There is nothing to fear from mistakes because nobody is error-free, but the truly terrifying spectre is hubris and the refusal to change, Ma wrote. He affirmed the “admirable courage and wisdom” by Tsai and Alibaba’s CEO Eric Wu in leading the change at the company.
Beijing wants to smash online walls but Big Tech treads carefully
Beijing wants to smash online walls but Big Tech treads carefully
“We made countless mistakes in the past 25 years, and we will [continue to] make mistakes in the next 77 years” over the course of Alibaba’s aim to span three centuries, wrote Ma. “Facing problems is not to deny the past, but to find the way responsibly to the future.”
The messages by the two co-founders served the same purpose to boost morale at Alibaba, which Tsai conceded had been low over the past three years due to a combination of factors. Another overarching theme was to remind employees to better understand the needs and challenges ahead.
Alibaba’s most fundamental change this year is to abandon the blind pursuit of performance indicators, and focus instead on customer value, wrote Ma, echoing Tsai. To return to its growth track, Alibaba simplified its structure in February to focus on two core businesses – cloud computing and e-commerce – in the wake of a sweeping restructuring announced a year ago.
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Is China’s technology falling behind in the race for its own ChatGPT?
Is China’s technology falling behind in the race for its own ChatGPT?
The company’s flagship shopping platform Tabao said it would provide 10 billion yuan (US$1.38 billion) of cash to subsidise content creation, such as live streaming and short videos, on the platform in 2024, Cheng Daofang, general manager of Taobao and Tmall Group’s e-commerce content unit, said at an event last month.
Four months earlier, Ma encouraged Alibaba’s employees in an internal letter to embrace change and stick to the company’s original vision. PDD Holdings, which operates the Chinese budget shopping platform Pinduoduo and Temu, was closing in on Aliibaba’s valuation and Taobao’s market share.
“The important [question] is not who to catch up with today, but to think about how tomorrow’s e-commerce should improve the consumer experience,” Ma wrote.
