Alibaba names new CEO as revenue jumps
- 07 May, 2015 23:54
Though Alibaba Group is succeeding in generating more revenue from mobile, it is nevertheless shuffling executives, elevating its chief operating officer Daniel Zhang to CEO in the face of a stock-based compensation program that has depressed profit.
Zhang will take over on May 10, and current CEO Jonathan Lu will step down, remaining on Alibaba's board of directors as vice chairman.
The company made the announcement on Thursday, when it reported its first quarter earnings. Alibaba's profit fell 49 percent year over year to about 2.9 billion yuan (US$476 million). Profit has been weighed down by continued stock awards given to employees since its IPO last year. Without the share-based compensation, Alibaba said its profit would have risen 14 percent.
First quarter revenue, however, was up 45 percent from last year, reaching 17.4 billion yuan. The company is steadily expanding its user base, which hit 350 million annual active buyers for a year-over-year increase of 37 percent.
Alibaba also now has 289 million mobile monthly active users. During the first quarter, half of the company's e-commerce transactions were from mobile device, up from 27 percent a year earlier.
Alibaba runs two of China's largest online retail platforms, Tmall.com and Taobao Marketplace, and its U.S. IPO in September was a global record.
But the company's share price has fallen in recent months, from a high of $119 in November, closing at $80 on Wednesday, lower than its IPO price. In January, the share price took a dive when the Chinese government alleged that its e-commerce platforms were rife with counterfeit goods. Alibaba, however, called the claims "unfair" and biased.
Alibaba shares ticked up to $87 at the opening of the U.S. markets Thursday on news of the revenue jump.
Although the company has been successfully tapping the home market to fuel its e-commerce business, China overall has been facing a slowing economy.
Zhang, who has been with Alibaba for eight years in different roles and is 43 years old, will lead the company at a time when it's looking for new, young talent to take on larger responsibilities, said Joseph Tsai, company executive vice chairman in an earnings call.
In a statement, Alibaba founder and executive chairman Jack Ma said of Zhang, "there is no better person to lead Alibaba Group as we embark on the next stage of our growth."
The outgoing CEO, Lu, will help train Alibaba's next generation of leaders, Alibaba said in a statement. Lu became its CEO in 2013, after Ma decided to step down.