Alibaba and its CEO, Daniel Zhang, face what could be a year of reckoning. The share price of the company, sometimes referred to as the Chinese equivalent of Amazon, plummeted over the past year under the onslaught of aggressive regulators and competitors it had overlooked, eroding morale. And chatter in the cafeteria of Alibaba’s headquarters in Hangzhou, two hours’ drive from Shanghai, often turned to tanking employee stock options, Zhang’s leadership team and whether the 50-year-old former accountant is the right person for the job, several managers told The Information.
It’s a stunning change from just 17 months ago, when Time Magazine named Zhang, the successor to Alibaba’s iconic founder Jack Ma, as one of the world’s 100 most influential people alongside now-President Joe Biden, China’s President Xi Jinping and Alphabet CEO Sundar Pichai. Since then, Alibaba’s market capitalization has plunged from the all-time high of more than $800 billion to $340 billion today. The current value still puts Alibaba in the top 30 globally, and its shareholders include Goldman Sachs and Vanguard.
While all big Chinese internet companies have suffered from Beijing’s recent regulatory crackdown and a domestic economic slowdown, Alibaba’s predicament is partly of its own making. On Zhang’s watch, Alibaba has been slow to seize new opportunities that more nimble rivals have exploited, some investors say. When discount shopping app Pinduoduo targeted smaller cities and rural areas, Alibaba took its time playing catch-up. And the global success of Chinese online fashion retailer Shein showed a missed overseas opportunity for Alibaba. Just as important, Zhang’s multi-billion-dollar acquisition of a food-delivery app hasn’t performed well, despite his hands-on involvement in the business.