The Chinese e-commerce giant Alibaba is poised for a resurgence in the market following a challenging period, as stated by co-founder Joe Tsai in an exclusive interview with CNBC’s Emily Tan on Friday.
Concerns about Alibaba’s future had arisen due to internal changes, the cancellation of a cloud computing IPO, and heightened competition in its core e-commerce sector. The company faced increased rivalry from cost-conscious consumers turning to lower-priced goods from PDD Holdings and the surge of livestreaming sales on Douyin, China’s equivalent of TikTok, owned by ByteDance.
Tsai expressed confidence in Alibaba’s comeback, attributing it to restructuring and new management. He acknowledged previous competitive pressures but asserted, “Now we’re back.”
Anticipating a significant growth in e-commerce penetration in China, Tsai expects it to exceed 40% in the next five years, up from the current 30%.
Alibaba underwent a leadership reshuffle, with Tsai becoming chairman in September, and Eddie Wu taking over as CEO, replacing Daniel Zhang. The company split into six business groups last year, with plans for public listings, starting with the cloud unit. However, a cloud IPO was halted in November due to unfavorable market conditions.
Despite the challenges, Tsai and co-founder Jack Ma have shown confidence in Alibaba, purchasing over $200 million worth of company shares. The company’s U.S.-traded shares have remained relatively stable for the year, trading at around $76, a fraction of its November 2020 stock price.
Amidst increased competition and challenges, Alibaba remains committed to enhancing its artificial intelligence capabilities and capitalizing on cloud computing opportunities. Tsai highlighted the richness of AI applications in e-commerce, including quick product catalog creation and virtual dressing rooms.
Addressing the success of Chinese-affiliated e-commerce players in the U.S., Tsai acknowledged their “great consumer proposition” with high-quality products and reasonable prices. While observing their strategies, Alibaba, through platforms like AliExpress and Trendyol, continues to sell overseas.
Tsai also touched on U.S.-China tensions, emphasizing the need for collaboration despite competition. Although Alibaba no longer plans to spin off its cloud business, the company remains focused on advancing its AI capabilities and leveraging cloud computing in the dynamic e-commerce landscape.
