The new Alibaba Group CEO laid out the tech giant’s key strategic priorities for staff on Tuesday, signaling a shift toward a user-centric approach and increased reliance on artificial intelligence (AI). In an internal letter to employees, Eddie Wu, who replaced co-founder Jack Ma as leader of the world’s largest online retailer in March, said the company’s two main strategic focuses would be “user first” and “AI-driven.”
The Alibaba Group was founded in 1999 by 18 people led by Ma, a former English teacher from Hangzhou in central China. The original goal was to help small and medium enterprises use the Internet to compete in global markets, believing that the online environment would level the playing field for these companies. Since then, the company has grown into a digital ecosystem with e-commerce, logistics, cloud computing, media, and entertainment operations.
Alibaba’s most widely used e-commerce platforms are Taobao and Tmall, each attracting about 900 million active users annually. Its cloud business is also a significant revenue driver. But the company has struggled in recent years, hit by slower economic growth in its home market and stricter Beijing regulation. In 2019, the company announced its most significant reorganization ever, splitting into six distinct business groups. The move was aimed at reinvigorating the firm and improving its bottom line.
In his letter, Wu said the new focus for Alibaba’s online shopping platforms will be to provide a more personalized experience. That will involve more data-driven optimization of product, content, and marketing. It will also involve leveraging AI to help customers find products they like or may need and deliver better customer service. Wu said Alibaba would also focus on promoting young employees, specifically those born after 1985. He said he wanted these employees to form the core of its business management teams within the next four years as part of a push to maintain a start-up mindset at the company.
Wu also emphasized Alibaba’s commitment to continuing to support the development of its global commerce network, which has helped make it one of the most successful internet companies in the world. He said this effort would include increasing investment in the group’s logistics businesses and bolstering its presence in overseas markets.
However, Alibaba has a lot of work ahead as it tries to revive its fortunes. Its IPO was a massive success in 2014, but shares have stalled recently. It also faces stiff competition from U.S. e-commerce giants such as Amazon and Walmart, which are expanding in Asia, where Alibaba has been losing ground. And it is being forced to spend more on regulatory compliance, which has hurt its bottom line. The company has also suffered setbacks in raising fresh funds, with its Hong Kong float being put on hold after a slowdown in Chinese stock markets. As a result, its market value has dropped to about $70 billion.