In late March 2023, Alibaba Group, one of China's first-generation tech giants, announced a major organisational restructuring dubbed the "most important" in its 24-year history. The corporation's CEO, Zhang Yong, revealed a split into six departments aimed at attracting public investors.

However, Zhang Yong is now stepping down from his role as Chairman of the Board and CEO of this tech giant, and will exit the Alibaba board. The two co-founders of the company have ascended to these leadership positions.

On Tuesday, Alibaba announced that the 51-year-old Yong would leave his top job in September. He will then focus on his role as the CEO of Alibaba Cloud Intelligent Group, a position he started in March when the restructuring was announced. In May, Alibaba unveiled plans to divest its cloud business, paving the way for an initial public offering (IPO).

Joseph Tsai, who has been with Alibaba from its inception and is now 59 years old, will be promoted from Executive Vice Chairman to Chairman of the Board. Another co-founder, Wu Yongming, will replace Yong as CEO.

Duncan Clark, chairman of Beijing-based BDA China, comments, "This is a return of the old guard, the most trusted veterans are back in charge."

Alibaba is undergoing this leadership reshuffle at a critical juncture. Amid Beijing's crackdown on China's largest tech firms, Alibaba has been under the microscope. The company's share price has fallen significantly from its peak in 2020.

The corporate structure of Alibaba, as created by founder Jack Ma, establishes an autonomous committee for ultimate decision-making, separate from the shareholders and board of directors. Positioned as a permanent partner, Ma ingeniously bypasses modern commercial legislation, allowing him to maintain unending control over the company, irrespective of his position within it.

This methodology raises eyebrows in modern business circles. Firms usually face a stark choice: either embrace their nature as a family-run entity, accepting a reduced market valuation in return, or participate in the US stock market game, profiting from the fluidity of investment capital. An attempt to have the best of both worlds results in a business model anomaly, reminiscent of Mary Shelley's Frankenstein.

Following Ma's departure, Alibaba has essentially started a series of actions to lessen his influence, scarcely mentioning the unique partnership system that was once its cornerstone. The "1+6+N" restructuring, under the guidance of Zhang, represents Alibaba's self-revolution, ending Zhang's reign and removing the concept of a patriarchal figure at Alibaba. Each 'child' in the family is now free to flex its individual muscles.

Under the new "1+6+N" structure, Alibaba essentially replicates the Tencent model on a pixel-by-pixel level. "1" represents the group, which will not be involved in any specific business, but will manage and tax the 6+N.

The "6" represents Alibaba Cloud, Taobao Tmall, Local Life, Internationalization, Cainiao, and Da Wen Entertainment - essentially, the six "vassals" under Alibaba Group. Each has its own CEO and board, and will bear its own profit and loss. The "+N" signifies Alibaba's minor vassal entities, including Hema, Yintai, and Health. Should these businesses expand, they may join the "6"; if not, they must fend for themselves without any transfusion of high-quality businesses. Ant Financial (Alipay) has been completely separated and will not be included in Alibaba's system.

Zhang Yong's move from group CEO to 1/6 CEO may seem like a demotion, but in reality, the position of group CEO doesn't hold much power now. The roles are taken over by Tsai and Wu, both were amongst the earliest to start the company with Jack Ma in 1999. Tsai, an accomplished financier, and Wu, a venture capital veteran, have high acceptance in Wall Street. Their appointment may hint at Alibaba's future development path.

Despite some challenging periods, Zhang Yong's stewardship has been largely successful, and he is considered the "guiding star" within the company. His greatest achievement at Alibaba is arguably the creation of the "Double Eleven" shopping festival. Alibaba is now entering a new era where the "parenting" model is discarded, paving the way for a more open, dynamic future.

However, Alibaba's focus on quality and counterfeit crackdown unwittingly weakened its competitive power in lower-tier markets. This was exploited by Pinduoduo, led by Huang Zheng, triggering a major shakeup in the Chinese e-commerce sector.

Huang's philosophy underscores an essential aspect of consumerism in China: the true upgrade in consumption is not about leading a Parisian lifestyle in Shanghai, but about making daily necessities readily available for people in smaller cities like Anqing in Anhui province.

There are different ways of enticing consumers to spend. Unlike Tmall's boastful rise in customer spending, platforms like Kuaishou appeal to their audience in smaller cities with slogans like "good things don't have to be expensive", indicating a fundamentally different approach to market engagement.

Over the last two years, Alibaba's stock price has experienced a significant drop, largely due to increasing regulatory scrutiny from the Chinese government on tech firms.

In late March 2023, Alibaba Group, one of China's first-generation tech giants, announced a major organisational restructuring dubbed the "most important" in its 24-year history. The corporation's CEO, Zhang Yong, revealed a split into six departments aimed at attracting public investors.

However, Zhang Yong is now stepping down from his role as Chairman of the Board and CEO of this tech giant, and will exit the Alibaba board. The two co-founders of the company have ascended to these leadership positions.

On Tuesday, Alibaba announced that the 51-year-old Yong would leave his top job in September. He will then focus on his role as the CEO of Alibaba Cloud Intelligent Group, a position he started in March when the restructuring was announced. In May, Alibaba unveiled plans to divest its cloud business, paving the way for an initial public offering (IPO).

Joseph Tsai, who has been with Alibaba from its inception and is now 59 years old, will be promoted from Executive Vice Chairman to Chairman of the Board. Another co-founder, Wu Yongming, will replace Yong as CEO.

Duncan Clark, chairman of Beijing-based BDA China, comments, "This is a return of the old guard, the most trusted veterans are back in charge."

Alibaba is undergoing this leadership reshuffle at a critical juncture. Amid Beijing's crackdown on China's largest tech firms, Alibaba has been under the microscope. The company's share price has fallen significantly from its peak in 2020.

The corporate structure of Alibaba, as created by founder Jack Ma, establishes an autonomous committee for ultimate decision-making, separate from the shareholders and board of directors. Positioned as a permanent partner, Ma ingeniously bypasses modern commercial legislation, allowing him to maintain unending control over the company, irrespective of his position within it.

This methodology raises eyebrows in modern business circles. Firms usually face a stark choice: either embrace their nature as a family-run entity, accepting a reduced market valuation in return, or participate in the US stock market game, profiting from the fluidity of investment capital. An attempt to have the best of both worlds results in a business model anomaly, reminiscent of Mary Shelley's Frankenstein.

Following Ma's departure, Alibaba has essentially started a series of actions to lessen his influence, scarcely mentioning the unique partnership system that was once its cornerstone. The "1+6+N" restructuring, under the guidance of Zhang, represents Alibaba's self-revolution, ending Zhang's reign and removing the concept of a patriarchal figure at Alibaba. Each 'child' in the family is now free to flex its individual muscles.

Under the new "1+6+N" structure, Alibaba essentially replicates the Tencent model on a pixel-by-pixel level. "1" represents the group, which will not be involved in any specific business, but will manage and tax the 6+N.

The "6" represents Alibaba Cloud, Taobao Tmall, Local Life, Internationalization, Cainiao, and Da Wen Entertainment - essentially, the six "vassals" under Alibaba Group. Each has its own CEO and board, and will bear its own profit and loss. The "+N" signifies Alibaba's minor vassal entities, including Hema, Yintai, and Health. Should these businesses expand, they may join the "6"; if not, they must fend for themselves without any transfusion of high-quality businesses. Ant Financial (Alipay) has been completely separated and will not be included in Alibaba's system.

Zhang Yong's move from group CEO to 1/6 CEO may seem like a demotion, but in reality, the position of group CEO doesn't hold much power now. The roles are taken over by Tsai and Wu, both were amongst the earliest to start the company with Jack Ma in 1999. Tsai, an accomplished financier, and Wu, a venture capital veteran, have high acceptance in Wall Street. Their appointment may hint at Alibaba's future development path.

Despite some challenging periods, Zhang Yong's stewardship has been largely successful, and he is considered the "guiding star" within the company. His greatest achievement at Alibaba is arguably the creation of the "Double Eleven" shopping festival. Alibaba is now entering a new era where the "parenting" model is discarded, paving the way for a more open, dynamic future.

However, Alibaba's focus on quality and counterfeit crackdown unwittingly weakened its competitive power in lower-tier markets. This was exploited by Pinduoduo, led by Huang Zheng, triggering a major shakeup in the Chinese e-commerce sector.

Huang's philosophy underscores an essential aspect of consumerism in China: the true upgrade in consumption is not about leading a Parisian lifestyle in Shanghai, but about making daily necessities readily available for people in smaller cities like Anqing in Anhui province.

There are different ways of enticing consumers to spend. Unlike Tmall's boastful rise in customer spending, platforms like Kuaishou appeal to their audience in smaller cities with slogans like "good things don't have to be expensive", indicating a fundamentally different approach to market engagement.

Over the last two years, Alibaba's stock price has experienced a significant drop, largely due to increasing regulatory scrutiny from the Chinese government on tech firms.