Alibaba changes CEO as revenues soar

AFP , Thursday 7 May 2015

Jonathan Lu
Jonathan Lu, former CEO for Alibaba Group. (Photo: Reuters)

Chinese e-commerce giant Alibaba announced Thursday a surprise shake-up in management, replacing its chief executive officer despite a sharp rise in revenues.

Jonathan Lu, who had taken up the CEO post in May 2013, will be replaced by Daniel Zhang, currently the group's chief operating officer, from Sunday.

Lu will stay on the management board as vice chairman of the company headquartered in the eastern Chinese city of Hangzhou.

"There is no better person to lead Alibaba Group as we embark on the next stage of our growth on top of the strong foundation that Jonathan helped build," said the group's founder Jack Ma of Zhang.

Credited with turning Taobao Mall -- a business-to-consumer platform -- into one of the group's most important businesses, Zhang first joined the company in August 2007.

He was also a key architect of the Singles' Day online shopping sale started by Alibaba, which has become the world's biggest electronic retail event.

The management shake-up comes just months after the company completed the world's biggest IPO with its listing on the New York Stock Exchange in September that raked in $25 billion.

However, its stock price has since dropped sharply to around $80, far off its peak of $120 in November, hammered by poor third quarter results and a row with Chinese authorities accusing it of allowing imitation goods to be sold on its online shopping platform.

On Thursday, the company said its net profit plunged 49 percent to $463 million for the final quarter of its financial year ending March, hit by a share-based compensation expense.

But revenues however rose 45 percent to $2.811 billion, with mobile revenue showing a three-fold leap to $846 million.

For the full year ending March, net income rose 4.0 percent to $3.923 billion.

Transactions made on mobile devices continued to grow, and accounted for just over half (51 percent) of the value of sales made on the company's China retail platforms, up from 42 percent in the previous quarter.

Overall, the Chinese retail business contributed 75 percent of Alibaba's total revenues.

The number of active buyers on its Chinese platform reached 350 million for the year ending March, up 16 million from December.

Founded by Ma in 1999, Alibaba is China's biggest e-commerce company but is seeking to expand beyond its traditional business.

The Chinese company and Amazon are considered competitors in some areas but unlike the US firm which makes its own e-book reader, Alibaba has no products of its own and simply provides a trading platform.

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