As Chinese e-commerce giant Alibaba continues to shift its focus to mobile, its leadership team is getting younger and younger.
Along with releasing better than expected earnings this morning, Alibaba announced that the company’s chief operating officer Daniel Zhang will become CEO, effective later this week. The company’s current CEO Jonathan will remain on the board of directors of Alibaba Group as vice chairman.
Executive chairman and Alibaba (BABA) founder Jack Ma sent a letter to employees that explained that the changing of the guard was part of the “eventual transition of our leadership team to a younger generation….We always believe that young people are better at developing the future because they are our future. Investing in the younger generation is investing in our own future.”
A number of other executives will be shifting roles this week to younger counterparts. Alibaba’s chief technology officer, Wang Jian; chief risk officer Shao Xiaofeng, chief strategy officer Zeng Ming, and chief marketing officer Wang Shuai, will all “transition their day-to-day responsibilities to the post-70 generation management team whom they have developed” according to Ma’s letter.
In the letter, Ma wrote, “this marks a future where the post-70 generation will command the troops at Alibaba Group!”, referring to people born in the 1970s.
This isn’t the first time Ma has brought up age in relation to Alibaba’s future potential for innovation. When he stepped down as CEO in 2013, he wrote “At 48, I am no longer ‘young’ for the Internet business.”
“The next generation of Alibaba people are better equipped to manage an Internet ecosystem like ours. I believe they understand the future better than I do so they are more adept at creating a better tomorrow. The Internet belongs to young people.”
Ma’s strategy is interesting considering his American counterpart in e-commerce, Amazon (AMZN), is still led by founder Jeff Bezos, who is 51 years old. Microsoft (MSFT) CEO Satya Nadella is 47, and Google (GOOG) CEO and co-founder Larry Page is 40.
As the company continues to transition to a mobile-dominant world, engagement and purchasing on mobile continues to increase. Mobile transactions now represents over 50% of all retail transactions, compared to 42% in the
quarter ended Dec. 31, 2014 and 27% in the quarter ended March 31, 2014. Revenue from mobile e-commerce is up over 300% from the previous quarter to $846 million.
As Zhang takes the reins of Alibaba, transitioning to mobile won’t be his only challenge as CEO. A few weeks ago, Alibaba issued a hiring freeze to streamline efficiency. The company has also clashed with Chinese regulators over the sale of fake and counterfeit goods.
