Alibaba Appoints New CEO for Freshippo

Alibaba Group Holding Ltd. has selected a new head for its grocery arm, Freshippo, in a significant move as part of a broader restructuring effort.

CFO Takes the Helm:

Chief Financial Officer Yan Xiaolei will succeed founder Hou Yi as CEO, according to a source familiar with the matter. The source, who spoke on condition of anonymity, said Hou will retire but continue to function as a senior adviser to the company.

Alibaba Restructuring Amid Challenges:

The decision, initially reported by the Late Post, comes amidst a series of strategic adjustments at Alibaba prompted by challenges and regulatory scrutiny. The company has faced raised competition from rivals like PDD Holdings Inc. and ByteDance Ltd., leading to a need for comprehensive restructuring efforts.

Once dominating China’s most valuable company, Alibaba has endeavored to regain its growth momentum. Initially proposing a division into six parts, the company has faced obstacles, including the sudden departure of former CEO Daniel Zhang and the postponement of Freshippo’s Hong Kong IPO due to market conditions.

Promotion of Young Executives by Alibaba:

To stimulate growth, Alibaba has been actively promoting young executives to lead various business segments, including its cloud computing division and core domestic commerce business.

Chairman Joe Tsai indicated during last month’s earnings call a reconsideration of Alibaba’s focus, suggesting a potential shift away from its longstanding “new retail” ambition. Tsai highlighted that physical retail operations are no longer the company’s primary focus, signaling a potential divestment from such ventures.

Expansion Plans for Freshippo:

Established in 2016, Freshippo currently operates over 360 stores across China and plans to open an additional 70 locations in 2024. This underscores Alibaba’s commitment to the grocery retail sector despite organizational changes.

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